scholarly journals THE EFFECT OF FOREIGN DIRECT INVESTMENT ON TAX REVENUE IN DEVELOPING COUNTRIES

2020 ◽  
Vol 13 (1) ◽  
pp. 83-95
Author(s):  
Arif Widya Pratomo
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Panel Data Analysis ◽  
Political Stability ◽  
Least Square ◽  
Tax Revenue ◽  
Positive Correlation ◽  
Independent Variable ◽  
Direction Effect

The objective of this research paper is to study the effect of Foreign Direct Investment (FDI) on tax revenue in developing countries. FDI net inflow, greenfield, and brownfield FDI are selected as the independent variable, and tax revenue and its types are chosen as the dependent variable. Using panel data analysis, this research finds that FDI net inflow has a positive correlation on total tax revenue, corporate tax revenue, individual tax revenue, and VAT revenue. However, the effect of FDI net inflow on property tax revenue is not statistically significant. This research also finds that in the developing countries, the greenfield FDI has a beneficial effect on tax revenue while brownfield FDI tend to erode tax revenue. To deal with the possibility of endogeneity problems, this research uses “political stability and absence of violence” index as an instrumental variable and conducts a two-stage least square (2SLS) regression to estimate the parameter. The result shows that FDI has a positive correlation on total tax revenue, but not significant. However, the endogeneity test shows that the endogeneity problem is less likely to exist. To conclude, FDI and tax revenue tend to have only one direction effect from FDI to tax revenue.

تأثير الاستثمار الاجنبي المباشر في القيمة السوقية للشركة (دراسة تطبيقية في شركة بترو جانيا الصينية في عقود التراخيص النفطية للجولة الاولى والثانية في الحقول النفطية في العراق للمدة من 2017-2010)

2020 ◽  
Vol 2020 (66) ◽  
pp. 65-85
Author(s):  
هيثم عبد النبي موسى ◽  
أ .د حيدر نعمة غالي الفريجي
Keyword(s):  
Foreign Direct Investment ◽  
Stock Prices ◽  
Return On Investment ◽  
Direct Investment ◽  
Inverse Correlation ◽  
Market Value ◽  
Political Stability ◽  
Coefficient Of Determination ◽  
Independent Variable ◽  
The Impact

This study dealt with the effect of foreign direct investment on the market value of the company during the period of time (2010-2017). This issue was studied through a sample of oil fields in southern Iraq in which the company operates within the first and second licensing contracts rounds and according to the circumstances and variables of the investment environment as it is. Although this investment often achieves high returns, it is also characterized by a high degree of risk and for the purpose of evaluating the impact of foreign direct investment on the market value of the company's stock prices for the period (2010-2017). The statistical scale (T-TEST) was used to indicate the significance of the correlation hypotheses. Between the return on investment as the independent variable and the market value as the dependent variable, and the use of the coefficient of determination (R2) that measures the effect of the independent variable (foreign direct investment) on the dependent variable (market value) and the F-Test to demonstrate acceptance or rejection of the hypothesis of the return on investing in the market value of the oil company, and if the company achieves a high return in foreign direct investment, the market value of it will be affected positively. The study was based on a set of goals, including determining the attractiveness of Iraq to foreign investments, especially the oil sector, and the study reached a number of conclusions, the most prominent of which is the existence of a strong inverse correlation between the return on investment and the market value of the company. And the existence of a slight impact of the return on investment on the market value of the company, and the study reached a number of recommendations, the most important of which is activating the investment climate through political stability and the clarity and stability of laws and legislation regulating investment, which is one of the most important factors affecting the investment decision.

scholarly journals Determinants of Foreign Direct Investment in Developed and Developing Countries: Impact of Political Stability

2021 ◽  
Vol 17 (4) ◽  
pp. 1390-1404
Author(s):  
R.I. Vasilyeva ◽  
◽  
O.S. Mariev ◽  
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Developing Economies ◽  
Political Stability ◽  
Policy Implications ◽  
Likelihood Method ◽  
Developed Economies ◽  
Development Level ◽  
The Impact

Stable political environment and prominent development of political institutions increase foreign direct investment flows by providing lower risks for investors. However, this impact can vary according to the development of the country. This study aims to investigate the impact of various indicators of political stability on foreign direct investment attraction for different economies distinguished by their development level. Our database includes 66 FDI-recipient countries and 98 FDI-investing countries for the period from 2001 to 2018. By applying the gravity approach and Poisson Pseudo Maximum Likelihood method with instrumental variables (IV PPML), we model bilateral FDI flows, incorporating variables reflecting various aspects of political stability formed by the principal components analysis. Interestingly, we found mixed results regarding the impact of political stability on FDI flows. In particular, political stability indicators were found to be insignificant, when analysing the bilateral FDI flows for the group of developed economies. We obtained similar result for the group of developing economies. However, political stability variables significantly influence FDI flows for countries with different development level, confirming the hypothesis that countries’ development affects bilateral FDI flows. Besides, we discover the significant difference between developed and developing countries referring to FDI-investors. Based on the obtained results, we highlight a few policy implications for developing and developed economies.

scholarly journals An Impact Assessment of Expected Future Turmoil Risk on FDI: A Panel Data Analysis of Developing Countries

2014 ◽  
Vol 19 (2) ◽  
pp. 101-128 ◽  
Author(s):  
Mahvish Faran
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Data Analysis ◽  
Direct Investment ◽  
Panel Data Analysis ◽  
Gdp Per Capita ◽  
Democratic Accountability ◽  
Fdi Inflows ◽  
Per Capita ◽  
Very High

This paper uses foreign direct investment (FDI) data from 39 developing countries for the period 2002–11 to explore whether the expected future turmoil risk of a country plays a significant role in determining FDI. It concludes that countries for which the expected future turmoil risk is very high are likely to have lower FDI inflows than countries for which the expected future turmoil risk is low, keeping all other factors constant. The results also illustrate that GDP per capita, democratic accountability, religious tension, and FDI inflows in the previous period are important determinants of FDI in developing countries.

Analysis of Foreign Direct Investment and Economic Growth in Nigeria: Application of Spatial Econometrics and Fully Modified Ordinary Least Square (FMOLS)

2019 ◽  
Vol 54 (3) ◽  
pp. 159-176 ◽  
Author(s):  
Olabode Philip Olofin ◽  
Oluwole Oladipo Aiyegbusi ◽  
Abayomi Ayinla Adebayo
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Capital Formation ◽  
Least Square ◽  
Income Growth ◽  
Tax Revenue ◽  
Ordinary Least Square ◽  
Determinants Of Fdi

Based on the controversy surrounding the determinants of foreign direct investment (FDI) inflow from one country to another and the suggestion that inflow of FDI might be a result of countries’ locations, this study therefore revisits the determinants of FDI and economic growth by testing for the roles of country’s location in the determination of the inflow of FDI to Nigeria. Unlike other studies, this study finds that countries’ locations do not play any significant role in determining FDI inflow to Nigeria. The study, therefore, employs fully modified ordinary least square (FMOLS) to examine the determinants of FDI in Nigeria. The FMOLS results show that FDI, manufacturing sector, tax revenue, financial development, health expenditure, net trade and human capital have a positive relationship with income growth. These results were statistically significant except for tax revenue, net trade and human capital. These results support the argument that these variables are important determinants of economic growth. The article also finds a negative and statistically significant relationship among FDI, income growth, import and capital formation. These results are in conformity with economic theory in the sense that import of goods and services constitutes a leakage in the economy. Negative impact of capital formation and security could be associated with the prevailing high level of corruption, sharing of security votes and misappropriation of funds among the public officials in Nigeria. JEL Codes: F23, F26, F21, H24

scholarly journals Foreign Direct Investment in Pakistan: Policies and Trends

1997 ◽  
Vol 36 (4II) ◽  
pp. 959-985 ◽  
Author(s):  
Ashfaque H. Khan
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Labour Force ◽  
Political Stability ◽  
Business Environment ◽  
Sharp Change ◽  
Economic Policies ◽  
Foreign Investors ◽  
Macroeconomic Imbalances

Recent years have seen a sharp change in the attitude of developing countries regarding Foreign Direct Investment (FDI).. The growing balance-of-payments difficulties as well as the decline in concessional ajd. have forced many developing countries to reassess their stances on FOI and to take substantial unilateral steps to Iiberalise their inward POI regimes. In spite of liberalising the inward FOI regime, tempering or removal of obstacles to foreign investors, and according liberal incentives, Pakistan's has been a lacklustre performance in attracting FDI. This paper attempts to find out the reasons why Pakistan has not been able to attract sufficiently large FOI despite liberalisation measures. The analysis identifies a number of factors responsible for low FDI in Pakistan. These include the lack of political stability particularly during the last eight years, and unsatisfactory law and order situation particularly in the. city of Karachi, the largest industrial and commercial centre and the only port of the country. The macroeconomiC imbalances and the slowing down of economic activity tog~ther with inconsistent economic policies have also discouraged foreign investors to increase their participation in Pakistan. The slow bureaucratic process, inappropriate business environment, and inadequate infrastructure facilities have played their role in discouraging foreign . investors to undertake investment initiative in Pakistan. The lack of trained, educated, and disciplined labour force, along with complicated and overprotective labour laws, have inhibited business expansion and frightened away productive investment. The cultural and social taboos as well as the quality of life are not conducive to attracting foreign investors to Pakistan. The lack of welcome to foreign investors by government agencies and officials has also been a problem.

scholarly journals FAKTOR PENENTU FOREIGN DIRECT INVESTMENT DI ASEAN-7; ANALISIS DATA PANEL, 2000-2012

Media Ekonomi ◽  
2014 ◽  
Vol 22 (1) ◽  
pp. 97
Author(s):  
Astrid Mutiara Ruth ◽  
Syofriza Syofyan
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Interest Rate ◽  
Direct Investment ◽  
Inflation Rate ◽  
Panel Data Analysis ◽  
Trade Openness ◽  
Depreciation Rate ◽  
The Past ◽  
Partial Analysis

<p>The number of <em>Foreign Direct Investment</em> (FDI) in Asia, especially in ASEAN, has been increasing drastically over the past few decades. FDI is one of the sources of investment that is really important, mainly for developing countries.</p><p>This research aims to investigate what factors that determine FDI in ASEAN, during 2000-2012. ASEAN-7 (Indonesia, Singapore, Thailand, Malaysia, Vietnam, Laos, and Filipina) are the object of this research. This research is divided into two main parts. The first part is discussed about the determinant factors of FDI in ASEAN generally, and the second part is the partial analysis in each country, so it is expected to formulate the appropriate policy according to each condition.</p><p>By using panel data analysis and STATA 11 as the software, it is seen that generally, factors determine FDI in ASEAN are the growth of GDP, interest rate, inflation rate, and trade openness. For Indonesia, FDI is influenced by the growth of GDP and inflation rate. The growth of GDP also affects FDI in Singapore, together with interest rate, <em>trade openness</em>, and depreciation rate of SGD, while, inflation rate and <em>trade openness</em> affect FDI in Thailand<em>.</em> In Malaysia, FDI is affected by the growth of GDP, inflation rate, and also <em>trade openness.</em></p><p>It is <em>trade openness</em> and depreciation rate that affect FDI in Vietnam. Meanwhile, in Laos, the growth of GDP and interest rate are factors determine FDI, and only inflation rate that influence FDI in Filipina.</p><p> </p>

ECONOMIC GROWTH ANALYSIS: A STUDY ON MALAYSIAN MARKET

2019 ◽  
Vol 8 (2) ◽  
Author(s):  
Suhaily Maizan Abdul Manaf ◽  
Shuhada Mohamed Hamidi ◽  
Nur Shafini Mohd Said ◽  
Siti Rapidah Omar Ali ◽  
Nur Dalila Adenan
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Correlation Method ◽  
Research Direction ◽  
Least Square ◽  
Future Research ◽  
Internal And External Factors

Economic performance of a country is mostly determined by the growth and any other internal and external factors. In this study, researchers purposely focused on Malaysian market by examining the relationship between export, inflation rate, government expenditure and foreign direct investment towards economic growth in Malaysia by applying the yearly data of 47 years from 1970 to 2016 using descriptive statistics, regression model and correlation method analysis. By applying Ordinary Least Square (OLS) method, the result suggests that export, government expenditure and foreign direct investment are positively and significantly correlated with the economic growth. However, inflation rate has negative and insignificant relationship with the economic growth. The outcome of the study is suggested to be useful in providing the future research direction towards the economic growth in Malaysia. Keywords: economic growth; export; inflation rate; government expenditure

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