scholarly journals INFLUENCE OF FINANCIAL INSTABILITY AND ECONOMIC GROWTH IN FOREIGN DIRECT INVESTMENT IN SOUTH AFRICA

2021 ◽  
pp. 25-31
Author(s):  
Badamasi Sani Mohammed ◽  
Sadun Naser Yassin Alheety ◽  
Zakarya Mohsen Al-Hodiany
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Financial Instability ◽  
Positive Contribution ◽  
Long Run ◽  
Prime Objective ◽  
The Impact ◽  
Bound Test

The prime objective of this paper is to study the impact of financial instability (FI) and economic growth (RGDPP) on foreign direct investment (FDI) in South Africa from 1970 to 2016 using Autoregressive Distributive Lag (ARDL) approach. Evidence from bound test reveals that FI, RGDPP, and FDI are cointegrated in the long run. Moreover, the result shows that financial instability and economic growth are positively significant and negatively insignificant influencing the foreign direct investment respectively. The study suggests that government should necessarily develop financial system to let economic growth make a positive contribution to foreign direct investment. KEYWORDS: financial Instability (FI); Economic growth (RGDPP); foreign direct Investment (FDI); Autoregressive Distributive Lag (ARDL)

scholarly journals Impact of Foreign Direct Investment on Human Development Index in South Africa

2020 ◽  
Vol 7 (1) ◽  
pp. 58
Author(s):  
Marius KOUNOU
Keyword(s):  
South Africa ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Poverty Reduction ◽  
Time Series Data ◽  
Empirical Studies ◽  
Sub Saharan Africa ◽  
Series Data ◽  
Long Run ◽  
The Impact

Many studies have been done on the impact of Foreign Direct Investment on economic growth and poverty reduction in developing countries, however there is a lack of empirical studies of FDI impact on poverty reduction in South Africa which is the second largest FDI recipients of one of the poorest regions in the world (sub Saharan Africa). We used time series data from 1990 to 2017 with the ARDL method to evaluate the impact of FDI Inflow on HDI in the country. The results show that FDI inflow has no significant impact on HDI both in the short run and long run on the country. This result is consistent with findings reported in the literature.

scholarly journals THE IMPACT OF INNOVATION ON ECONOMIC GROWTH: THE SPILLOVER EFFECT OF FOREIGN DIRECT INVESTMENT

2020 ◽  
Vol 8 (2) ◽  
pp. 708-714
Author(s):  
Nguyen Tran Thai Ha ◽  
Sobar M. Johari ◽  
Trinh Thi Huyen Thuong ◽  
Nguyen Thi Minh Phuong ◽  
Le Thi Hong Anh
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Research And Development ◽  
Direct Investment ◽  
Positive Impact ◽  
Spillover Effect ◽  
Empirical Method ◽  
Convincing Evidence ◽  
Positive Contribution ◽  
The Impact

Purpose of the study: Innovation is seen as the key to improving quality and productivity, thereby promoting competition and economic growth. This study analyzes the impact of innovation on economic growth through various measures, such as research and development spending, the number of researchers, number of patents as well as trademark registrations. Research results are evidence to recommend policies for intellectual-based economic growth. Methodology: Literature review and empirical analysis conducted in the study. The empirical method is a two-step System Generalize Methods of Moments (GMM), aiming at reliable results. Accessing the World Bank Database, research data from 64 developed and developing countries are collected from 2006 to 2014. Main Findings: The empirical findings show that innovation plays a crucial contribution in promoting economic growth, similar to national openness and government spending on education. This study also finds a positive impact on foreign investment flows and their spillover role in enhancing the correlation between innovation and economic growth. Applications of this study: The findings of this study focus on the contributions of innovation, foreign direct investment inflows, and other macro factors that can be enforced to improve economic growth by policymakers. Novelty/Originality of this study: The study uses different measures of innovation, including inputs such as the number of researchers, research and development expenditure, and outputs as the number of patents and number of trademark registrations. Empirical findings are found consistently, thus confirming that innovation is very important for economic growth. The study also shows convincing evidence confirming the positive contribution of foreign direct investment as well as its spillover effect on innovation and economic growth.

scholarly journals An Investigation of the Dynamic Effect of Foreign Direct Investment (FDI) and Interest Rates on GDP in South Africa

2018 ◽  
Vol 10 (5(J)) ◽  
pp. 29-37
Author(s):  
Thomas Habanabakize ◽  
Daniel F Meyer
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
South African ◽  
Significant Relationship ◽  
Direct Investment ◽  
Positive Relationship ◽  
Positive Impact ◽  
Long Run ◽  
Repo Rate

Economic growth in South Africa has been in the “doldrums” for the past decade. If well managed, foreign direct investment (FDI) and repo rate (interest rate) could have a positive impact and assist in rapid economic growth so urgently needed in South Africa. FDI has been a driving force for growth in many developing economies. Not enough has been done to attract FDI in South Africa. The country has enormous ability and capacity to attract FDI inflows and to have the advantages from it. A quantitative research approach was used to analyse the association amongst the variables which include FDI, GDP and repo rate in the South African economy. The South African Reserve Bank database was used and the period analysed is from 2000 to 2016. Statistical and econometric methods such as correlation analysis, unit root tests, ARDL Bounds test for cointegration, an error correction model (ECM), and the Granger causality tests were used. Subsequently, after the econometric model was estimated, findings indicated the existence of a long-run relationship between the three variables. While, a significant positive relationship exists between FDI and GDP, a negative long-run relationship was found between GDP and repo rate and interestingly a nonsignificant relationship between repo rate and FDI. In the short run, the positive effect of FDI on GDP is minimal whilst a significant and positive relationship exists between GDP and repo rate. The results did also show some limitations in the results, with regards to FDI and repo rate that there is no significant relationship between the variables, meaning that repo rate does not have an impact on FDIs. Although some long-run evidence was found of FDI playing a role in economic growth in South Africa, such impact is limited. Also very interesting is that the repo rate and FDI do not have a statistically significant relationship. This could be due to the rising risks associated with investments in the country. In conclusion, there are many variables which could have a positive impact on the attraction of FDIs and such factors will be explored further in future studies. 

scholarly journals Examining the impact of Exports and Exchange rate on Economic Growth of Turkey

2020 ◽  
Author(s):  
Iftikhar Muhammad ◽  
Malik Shahzad Shabbir
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Granger Causality ◽  
Direct Investment ◽  
Economic Policies ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
The Impact

Abstract Purpose This study intends to analyze the long-run and short-run relationships along with the identification of causal links between exports, economic growth, and exchange rate in Turkey. Data/Design: This study uses auto-regressive distributed lags (ARDL) and Granger causality over time series monthly data from the year 2010–2018. The results indicate that exports are significantly positively related to economic growth while the exchange rate is found to be negatively related to economic growth. Findings: Moreover, findings from the test of Granger causality indicate that a unidirectional causal association is found from exports to foreign direct investment and economic growth and from economic growth to foreign direct investment. The Granger causality results indicate that an increase in exports accelerates the economic growth of Turkey and a change in growth rate and exchange rate leads to a change in foreign direct investment. Originality of work: The overall findings suggest that exports should be promoted along with the liberal-investment economic policies to boost the overall economic growth in Turkey.

scholarly journals The Relationship between Electric Power Consumption, Foreign Direct Investment and Economic Growth in Sri Lanka

2020 ◽  
pp. 21-31
Author(s):  
S. Maheswaranathan
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Sri Lanka ◽  
Direct Investment ◽  
Time Series Data ◽  
Empirical Finding ◽  
Electricity Consumption ◽  
Series Data ◽  
Long Run ◽  
Bound Test

Purpose: This paper investigates the long run relationship between electricity consumption, foreign direct investment and economic growth in Sri Lanka. Design/Methodology/Approach: The annual time series data over the period 1970–2017 is considered to this study. Augmented Dickey–Fuller (ADF) unit root analysis is employed for examining the stationary properties of the variables. Consequently, Autoregressive Distributed Lag (ARDL) analysis is employed to examining the short- run and long-run relationship between electricity consumption, foreign direct investment and economic growth in Sri Lanka. Further, this study used the diagnostic tests such as the residual normality test, heteroskedasticity and serial autocorrelation tests for misspecification to validate the parameter estimation outcomes achieved by the estimated model. CUSUM test is applied to test the stability of the model. Collected data were analyzed using STATA version 15. Findings: The findings of the bound test confirm that the variables are cointegrated. Further the results reveal that there is a statistically positive significant relationship between electricity consumption, foreign direct investment and economic growth in Sri Lanka in the long run and short term. The empirical finding reveals that one percent increase in electricity consumption and foreign direct investment increases the GDP by 1.5 percent and 12.9 percent in the long run respectively.

scholarly journals The Symmetric and Asymmetric impact of FDI Inflows, Economic growth, and Capital Investment on CO2 Emission in Oman-Evidence from ARDL and NARDL Approach

2021 ◽  
Author(s):  
Ishfaq Hamid ◽  
Md Shabbir Alam ◽  
Muntasir Murshed ◽  
Pabitra Kumar Jena ◽  
Nadia Sha ◽  
...  
Keyword(s):  
Economic Growth ◽  
Carbon Dioxide ◽  
Foreign Direct Investment ◽  
Carbon Dioxide Emissions ◽  
Direct Investment ◽  
Capital Investment ◽  
Symmetric Model ◽  
Causality Test ◽  
Long Run ◽  
Bound Test

Abstract This study examines the symmetric and asymmetric nexus between capital investment, economic growth, foreign direct investment, and CO2 emissions in Oman during 1980- 2019. For this purpose, we applied ARDL Model for linear cointegration and NARDL model for nonlinear cointegration between capital investment, economic growth, foreign direct investment, and CO2 emissions. The bound test shows the long-term equilibrium relationship among CO2 emissions, capital investment, economic growth, and FDI in both models. The error correction mechanism demonstrates that CO2 emissions congregate to their long-run equilibrium level at a 50.1 percent annual pace of adjustment by integrating capital investment, economic growth, and FDI under the symmetric model. The causality test results show that carbon emissions and FDI, economic growth, and CO2 emissions exhibit bidirectional causal links. While, on the other hand, unidirectional causal links are running from capital investment to GDP. The asymmetric results show that positive shocks to FDI and economic growth have significant tumbling consequences on Oman's carbon dioxide emissions.In contrast, negative shocks in FDI and economic growth substantially increase carbon dioxide emissions. The research findings also reveal that carbon dioxide emissions are more resilient to negative shocks in FDI and economic growth. Based on these results, this study accomplishes that abatement measures should consist of strategies to enhance the deepness of FDI and economic growth in the Oman economy.JEL Classification: F21, Q56, C22

Foreign Direct Investment, Financial Development, and Economic Growth Nexus in Bangladesh

2020 ◽  
pp. 056943452093867
Author(s):  
Md. Noman Siddikee ◽  
Mohammad Mafizur Rahman
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Financial Development ◽  
Direct Investment ◽  
Banking Sector ◽  
Negative Impact ◽  
Capital Formation ◽  
Long Run ◽  
Short Run ◽  
The Impact

This article aims to explore the short- and long-run impact of foreign direct investment (FDI), financial development (FD), capital formation, and the labor forces on the economic growth of Bangladesh. We applied the Granger causality test and Vector Error Correction Model (VECM) for this study. The World Bank data for the period of 1990–2018 are taken into account for the analysis. Our findings suggest, in the long run, capital formation has a positive impact, and in the short run, it has a negative impact on gross domestic product (GDP) implying a lack of higher efficiency is persisting in capital management. Similarly, labor forces have an insignificant impact in the short run and a negative impact in the long run on GDP, which confirms the presence of a huge number of unskilled laborers in the economy with inefficient allocation. The impact of FD is found tiny positive in the short run but large negative in the long run on GDP indicating vulnerability of banking sector. These also confirm fraudulence and inefficient use of the domestic credit supplied to the private sector. The impact of FDI is approximately null both in the short and long run, indicating Bangladesh fails to achieve the long-term benefits of FDI. Finally, this study suggests using FDI more in the capital intensive project of the public–private partnership venture than infrastructural development only and also improving the credit management policy of the banking sector. JEL Classifications: F21, F43, J21

scholarly journals The Impact of Human Capital and Foreign Direct Investment on Economic Growth: An Empirical Study on Jordan

2020 ◽  
Vol 10 (2) ◽  
pp. 182
Author(s):  
Mustafa Mohammad Alalawneh
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Advanced Technology ◽  
Bounds Testing ◽  
Long Run ◽  
Auto Regressive ◽  
Human Capital Index ◽  
The Impact

Human capital is a real factor in improving the investment climate and attracting foreign investment. FDI also increases human capital in the host country through the transfer of advanced technology and the rehabilitation of local labor. The importance of the study comes from Jordan's serious endeavor to attract foreign direct investment and to present itself as a rich country in human and qualified capacities. This study examines the effect of human capital and foreign direct investment on economic growth in Jordan employing Auto Regressive Distributed Lags Bounds Testing (ARDL BT) co-integration method for the spanning period from 1984 to 2018. The results indicate that there is a long- run relationship among variables. The results showed that there is a negative and statistically significant effect of human capital index (HCI) on economic growth (GWP) in the long run, and a positive and statistically significant effect of FDI (GFDI) on economic growth (GWP) in the long run. The estimation results indicate that a 1% increase in (HCI) decreases (GWP) by 0.272%, and a 1% increase in (GFDI) increases (GWP) by 0.006%. This study is one of the few studies that highlight the challenges facing both HC and FDI in increasing economic growth in Jordan and provides some recommendations.

scholarly journals The Impact of FDI on Economic Growth in Case of Romania

2020 ◽  
Vol 12 (12) ◽  
pp. 81
Author(s):  
Alina Mihaela Ciobanu
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Labor Force ◽  
Direct Investment ◽  
Trade Openness ◽  
Causality Test ◽  
Long Run ◽  
Main Determinants ◽  
The Impact ◽  
Determinants Of Economic Growth

Foreign direct investment flows had increased worldwide over the last decades and many specialists think that there is a strong correlation among trade, FDI, labor force, and economic growth in the receiving countries. Based on available statistical data, we will examine the effects of FDI on GDP growth and the causality relations between GDP, trade openness, labor force, and FDI in case of Romania for the last decades. The ARDL bound testing approach is used to study the existence of a long-run relationship between FDI, trade, labor, and economic growth. Then the error-correction based Granger causality test is used to test the direction of causality between the variables. The results revealed that there is cointegration among the variables when real GDP and foreign direct investment are the dependent variables. Foreign direct investment, trade openness, and labor force are the main determinants of economic growth in the long run in Romania. In addition, the increase of gross domestic product, exports, imports and labor force promote foreign direct investment in the long run.

scholarly journals The Impact of Foreign Direct Investment on Economic Growth in Nigeria

2015 ◽  
Vol 7 (4) ◽  
pp. 90-97
Author(s):  
Sani Ali Ibrahim
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Empirical Studies ◽  
Trade Openness ◽  
National Income ◽  
Series Data ◽  
Long Run ◽  
The Impact

The economic development performance can be used to measure the economic growth of a given country. In economic analysis, a country can attain economic growth through the growth in national income measurement. However, there were rigorous discussions on the role of foreign direct investment (FDI) on economic growth and continued to be a topic of discussion on the contemporary economy. This paper serves as an extension to the previous empirical studies on the issue by providing some evidence from time series data for the period 1971 to 2013 of Nigeria. The primary aim of this study is to analyze the impact of FDI on economic growth of Nigeria taking trade openness, Gross Fixed Capital Formation and human capital as control variables. To investigate the long run equilibrium relationship, Johansen and Juselius co-integration approach is analyzed, while the speed of adjustment in the short run is analyzed through the use of VECM method. In Nigeria, FDI, GFCF and HK have long run relationship with economic growth. However, the coefficient of ECM in Nigeria is statistically significant at 1% level of significance. Thus, 10.8% of the adjustment is achieved due to the correction of the adjustment speed in a year.

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