scholarly journals The Effects of Capital Market Development and Foreign Direct Investment on the Entrepreneurial Process and Economic Growth

2018 ◽  
Vol 10 (4) ◽  
pp. 40
Author(s):  
Tékam Oumbé Honoré
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Capital Market ◽  
Direct Investment ◽  
Generalized Method Of Moments ◽  
Estimation Method ◽  
Market Development ◽  
Entrepreneurial Process ◽  
Dynamic Estimation

This article seeks to study the effects of the development of the capital market and foreign direct investment (FDI) in the entrepreneurial process and economic growth. The technical methods used in this study are the panel-based dynamic estimation method of the Generalized Method of Moments (GMM) and the Calderon-Rossell model, in order to assess the relative impact of the development of capital markets on the entrepreneurial process in the CEMAC zone. The results show that capital market and capitalization initiatives can lead to an entrepreneurial process and economic growth in the CEMAC region. In addition, the incidence of corruption, the rule of law and the quality of the regulatory framework are identified as the most important institutional frameworks that determine the attractiveness of CEMAC countries to the inflow of FDI.

scholarly journals An Evaluation of Relationship between Foreign Direct Investment and Economic Growth in Vietnam

2014 ◽  
Vol 220 ◽  
pp. 79-96
Author(s):  
Anh Phạm Thị Hoàng ◽  
Thu Lê Hà
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Significant Contribution ◽  
Foreign Capital ◽  
Positive Impact ◽  
National Economic ◽  
Investment Law ◽  
The Relationship

Foreign direct investment (FDI) is an essential source of capital in the gross investment conducive to national economic growth, including the case of Vietnam. Since the 1987 Foreign Investment Law, the country has attracted a large amount of foreign capital, which makes a significant contribution to economic development. This research employs a VAR model to analyze the relationship between FDI and Vietnam’s economic growth. The results suggest that FDI has a positive impact on the latter and vice versa. The research also finds that FDI stimulates export and improves the quality of human resources and technology - important prerequisites for the economic growth.

Effect of Infrastructure and Foreign Direct Investment on Economic Growth in Sub-Saharan Africa

2019 ◽  
Vol 11 (3) ◽  
pp. 183-201 ◽  
Author(s):  
Edward Nketiah-Amponsah ◽  
Bernard Sarpong
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Generalized Method Of Moments ◽  
Business Environment ◽  
Transport Infrastructure ◽  
Sub Saharan Africa ◽  
Economic Infrastructure ◽  
Sub Saharan

This article investigates the effect of infrastructure and foreign direct investment (FDI) on economic growth in Sub-Saharan Africa (SSA) using panel data on 46 countries covering the period 2003–2017. The data were analyzed using fixed effects, random effects, and system generalized method of moments (GMM) estimation techniques. Based on the system GMM estimates, the results indicate that a 1 percent improvement in electricity and transport infrastructure induces growth by 0.09 percent and 0.06 percent, respectively. Additionally, FDI proved to be growth enhancing only when interacted with infrastructure. The interactive effect of FDI and infrastructure improves economic growth by 0.016 percent. The results suggest that public provision of economic infrastructure reduces the cost of production for multinational enterprises, thus providing an incentive to increase investment in the domestic economy to sustain economic growth. The results also suggest that the impact of FDI on economic growth is maximized when some level of economic infrastructure is available. Our findings thus provide ample justification on the need for a significant government investment in infrastructure to provide a less costly business environment for both local and multinational enterprises to improve economic growth.

scholarly journals Institutions Powers, financial development and environmental factors influence on Carbon emission: Evidence from a Global Perspective

2021 ◽  
Author(s):  
hayat khan ◽  
Liu weili ◽  
itbar khan
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Renewable Energy ◽  
Financial Development ◽  
Environmental Quality ◽  
Direct Investment ◽  
Carbon Emission ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Global Perspective

Abstract This study explores the moderating power of institutional quality on carbon emission through renewable energy consumption, foreign direct investment, economic growth and financial development in the globe for the period of 2002 to 2019. By using two Step System Generalized Method of Moments, the results illustrate that renewable energy usage and foreign direct investment inflow enhance environmental quality while financial development and economic growth lowers environmental quality in the panel. The results shows that quality institutions in countries are still not yet adequate to defend the harmful impact of every environmental factor and protect environment however, the interaction term of institutional quality confirms the significant moderating effect of all explanatory variables on environmental quality in the panel. The findings also confirm the existence of Environmental Kuznets Curve and evidence the pollution halo hypothesis. The findings of this paper can be useful for policy makers whereas conducting stricter environmental regulation.

scholarly journals IMPACT OF STOCK MARKET DEVELOPMENT ON ECONOMIC GROWTH: EMPIRICAL EVIDENCE

Globus ◽  
2020 ◽  
Author(s):  
T.M. Aliyev
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Stock Market ◽  
Direct Investment ◽  
Granger Causality Test ◽  
Market Liquidity ◽  
Market Development ◽  
Causality Test ◽  
Stock Market Development ◽  
Oil Sector

Development of non-oil sector of Azerbaijan was always one of the main priorities of the government. Oil sector of the economy was well developed since Azerbaijan got its independence, but in order to use the oil source more effectively it was determined to diversify the funds into non-oil sector of the economy, which in the end gave huge boost to most industries of the economy and led to increase of foreign direct investment. However, another source of the foreign direct investment and investor attraction – stock markets, were not developed and organized properly up until 1998, which was mainly due to outdated procedures left from USSR, absence of principles, methodology and understanding of how stock market can play huge role in expansion of economy and attraction of foreign investment. Nowadays, Azerbaijan has all possibilities to widen the stock market, enable easy way of increasing number of small businesses, startups and open the doors for them to global economy and lead to speedy expansion of the businesses. This research analyses the possible relationship between stock market development and economic growth, in order to predict possibility of positive impact of stock market on economic growth, overall social economic welfare of the country and business environment. For the purposes of the research, statistical figures of the country`s main economic indexes were collected: gross domestic product value, foreign direct investment value, stock market liquidity and turnover values, which were then analyzed and tested on various levels of cointegration test, Granger Causality test, vector error correction model and etc. All the analysis were done on statistical software Stata 11 based on figures of 1998-2016. The outcome of the Johansen-Julius shows existence of cointegration and by that VECM test proves relationship between stock market and economic growth in long run, while Wald Test confirms correction of this growth in short term by given explanatory variables. Hence, Granger causality test is conducted further, which determines bidirectional relationship between 3 variables: foreign direct investment, GDP and LIQ (stock market liquidity level). Based on the outcome of the analysis, study concludes that expansion of stock market and increase in foreign direct investment will have chain effect which leads to economic growth and social welfare in Azerbaijan.

scholarly journals Determinants of Economic Growth in Organization of Islamic Cooperation with Governance Index as a Moderating Variable

2021 ◽  
Vol 04 (08) ◽  
Author(s):  
Akmal Ihsan ◽  
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Good Governance ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Negative Influence ◽  
Statistical Testing ◽  
Governance Index ◽  
Determinants Of Economic Growth

This study seeks to explore and investigate the influence of foreign direct investment, remittances, and trade openness on economic growth in the Organization of Islamic Cooperation with governance index as a moderating variable in 2005-2019. Moderated Regression Analysis analysis is used to analyze governance index variables. The use of Generalized Least Square and Generalized Method of Moments is used to determine which method is best. Sargant level of significance and value showed GMM more precisely in this study. The results of statistical testing show that all independent variables have a significant positive influence on economic growth except foreign direct investment which has a significant negative influence. This negative influence is due to the instability of investment flows. In addition, governance index can moderate foreign direct investment, remittances, and trade openness in its influence on economic growth.Thus, it can be concluded that to increase economic growth, the need for good governance index so that economic growth in the Organization of Islamic Cooperation is increasing.

scholarly journals Identify Factors Affecting Foreign Direct Investment Capital In The Southern Key Economic Region

2019 ◽  
Vol 22 (2) ◽  
pp. 275-288
Author(s):  
Tran Thi Kim Dao ◽  
Nguyen Van Luan
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Estimation Method ◽  
Economic Region ◽  
Factors Affecting ◽  
Effect Model ◽  
Investment Capital ◽  
Fdi Attraction

This paper focuses on building research model and analyzing the main factors influencing foreign direct investment (FDI) attraction in the Southern Key Economic Region during the period of 2005 - 2016. Based on theories and empirical studies, the authors identified the key factors that affect FDI attraction in that area. Through the development of hypotheses, a quantitative research mode l with Stata software help ed to select an estimation method with reliable and effective test results. The selected research method was the estimation method according to 3 approaches: OLS (P OOLED Regress Model) the least estimation method, Fix Effect Model (FEM), and Random Effect Model (REM). The research model used was the Panel Data model. The author performed the test hypotheses for the factors affecting FDI attraction in the Southern Key Economic Region. After regression with 3 methods (POOLED, FEM, and REM), and using F-Test and Breusch Pagan Test, the aim was to estimate the efficiency of the model and consider the simultaneous effects of independent variables on the dependent variable. These include d the following factors: market size, infrastructure, labor force, quality of human resources, market openness, trade openness, and institutional quality. Examining the relationship between market size, infrastructure development, labor force, quality of human resources, trade openness and institutional quality of FDI attraction into the Southern Key Economic Region, the authors select ed the Pooled Regression Model. The results of this paper may partly help policymakers to have an overall vision and may contribute to the development of appropriate solutions and strategies to attract and effectively use foreign direct investment capital to promote the socio-economic development of the region. Furthermore, the findings may contribute to guidelines to attract and make better use of these funds in the future, better serving the economic development of this region.  

Human capital threshold, foreign direct investment and economic growth: evidence from sub-Saharan Africa

2020 ◽  
Vol 19 (3) ◽  
pp. 323-337 ◽  
Author(s):  
Friday Osemenshan Anetor
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Generalized Method Of Moments ◽  
Mediating Effect ◽  
Sub Saharan Africa ◽  
Growth Effect ◽  
Content Type ◽  
Sub Saharan

Purpose The purpose of this study is to analyze the mediating effect of human capital in foreign direct investment (FDI) and growth nexus and establish the threshold of human capital in 28 sub-Saharan African (SSA) countries over the period 1999–2017. Design/methodology/approach This study used a secondary source of data obtained from the World Development Indicator and used the system generalized method of moments and dynamic panel threshold regression (TR) to analyze the data. Findings This study found that FDI and human capital have no significant impact on the economic growth in SSA. However, when the interactive term of FDI and human capital was introduced in the model, the economic growth effect of FDI became positive and significant, while the coefficient of the interactive term is negative and significant. This presupposes that SSA does not have a sufficient high-quality workforce that can absorb and transform the spillover benefits of FDI into economic growth. As a result, this study applied the TR to determine the minimum level of human capital and established a threshold level at 63.91%. Practical implications It, therefore, becomes pertinent for policymakers in the SSA region to have a human capital policy to build up their absorptive capacities to fully take advantage of FDI. Originality/value The contribution of this study lies in establishing a threshold of human capital at 63.91% for countries in the SSA region.

scholarly journals Foreign Direct Investment Spillovers and Economic Growth: Evidence from Asian Emerging Countries

2021 ◽  
Vol 16 (1) ◽  
pp. 49
Author(s):  
Lodi Bagus Rismawan ◽  
Tri Haryanto ◽  
Rossanto Dwi Handoyo
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Emerging Markets ◽  
Direct Investment ◽  
Spillover Effect ◽  
Absorption Capacity ◽  
Dynamic Panel Regression ◽  
Asian Emerging Markets

Research on FDI in promoting economic growth has been the focus of recent decades, especially in developing countries. Foreign direct investment can be one of the main objectives in increasing economic growth. FDI is assumed to indirectly contribute to economic growth through a spillover effect on the absorption capacity of a country by increasing the stock of human capital and the quality of institutions. This study aims to analyze the spillover effect of FDI on economic growth in Asian emerging markets. The data were analyzed using dynamic panel regression (GMM) during 2008-2017 period with STATA 14 software.The results in this study strongly indicate that the spillovers of FDI is proven to be able to drive economic growth through human capital and institutions in Asian emerging markets.

scholarly journals DOES DEMOCRATIC INSTITUTIONS AND FOREIGN DIRECT INVESTMENT AFFECT ECONOMIC GROWTH? EVIDENCE FROM NIGERIA

2017 ◽  
Vol 2 (2) ◽  
pp. 27-36 ◽  
Author(s):  
Hassan O. Ozekhome
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Generalized Method Of Moments ◽  
Institutional Framework ◽  
Series Data ◽  
Democratic Institutions ◽  
Rapid Economic Growth ◽  
The Impact

A reciprocally re-enforcing relationship exists between institutions, foreign direct investment and economic growth. Sound institutional framework which supports foreign direct investment is significant for driving rapid Economic growth. An important factor that has undermined rapid and sustained economic growth is the weak institutional structure, decrepit state capacity and low level of foreign direct investment in Nigeria. Democratic structures reflected in the rule of law, effectiveness and predictability of the judiciary and enforceability of contracts proceedings is imperative for accelerating economic growth. Employing the Generalized Method of Moments (GMM) estimation techniques on annual time series data covering the period from 1981 to 2015, the relationship between these variables was empirically investigated. The empirical findings reveal that democratic institutions and foreign direct investment are significant variables influencing economic growth in Nigeria. In particular, the results, using Nigerian data, show that weak institutions have a destabilizing impact on growth. The impact of FDI on the other hand is found to be positive and significant. Therefore, sound institutional framework, as well as appropriate and consistent macroeconomic policies that encourage foreign direct investment to propel rapid economic growth in Nigeria needs to be put in place.

scholarly journals RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT AND STOCK MARKET DEVELOPMENT IN A SMALL SOUTHERN AFRICA ECONOMY

2020 ◽  
Vol 17 (2) ◽  
Author(s):  
Duduzile Ngobe ◽  
◽  
Emenike Kalu ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Stock Market ◽  
Capital Market ◽  
Direct Investment ◽  
Market Development ◽  
Causality Test ◽  
Stock Market Development ◽  
Money Market Funds ◽  
Long Run ◽  
Short Run

This paper investigates the relationship between foreign direct investment and stock market development in a small southern African economy. Specifically, the paper analyses long-run, short-run and causal relationships between foreign direct investment and stock market development in Eswatini for the 1990 to 2018 periods. Results of preliminary analyses of the variable show existence of positive skewness, fat-tailed, non-normal distribution, and I(1) order of integration for the foreign direct investment and stock market return series. Estimates from the ARDL model indicate evidence of a positive and statistically insignificant long-run relationship between foreign direct investment and stock market development in the kingdom of Eswatini. But in the short-run, there exist no relationship between foreign direct investment and stock market development in Eswatini. Estimates from Granger causality test do not show any evidence of causal relationship between foreign direct investment and stock market development in Eswatini. We recommend amongst others that capital market authorities should establish measures to increase the number of listings in the market so as boost investment options. In addition, there should be massive domestic investor-education on benefits of financing projects with a combination capital market funds, which has long-term tenor, and money market funds, which are of short-term nature.

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