Determinants and Causality of Current Account Balance and Foreign Direct Investment: Lower Middle Income Countries in ASEAN

This study investigates the determinants and causality between current account balance and foreign direct investment in Association of Southeast Asian Nations (ASEAN) in lower middle income countries. This study uses time series from 2000-2017 and cross section of 6 countries, namely Indonesia, Philippines, Vietnam, Lao, Myanmar and Cambodia, which were analyzed using simultaneous equation model approach. There are three important findings in this study. First, current account balance is positively affected by financial development, government expenditure, real GDP and real exchange rate, while negatively affected by foreign direct investment. Second, foreign direct investment is positively affected by real GDP, real exchange rate, economic openness and current account balance, while negatively affected by inflation. Third, there is a causal relationship between current account balance and foreign direct investment, which the two variables significantly influence each other. Therefore, it is highly recommended for lower middle income countries in ASEAN to intervene in macroeconomic policy variables, so that the deficit conditions for current account balance and foreign direct investment can be reduced in the lower middle income countries in ASEAN. Keywords: current account balance, foreign direct investment, determinants, causality, lower middle income countries, ASEAN.

Empirical research of foreign direct investment determinants in developing countries: A case study of the Western Balkan countries

This paper presents the results of an original empirical research of the effects and the importance of foreign direct investments on the economic development of developing countries, as well as the determinants of attracting them, with particular reference to European developing countries, which was conducted using panel data through an example of selected Western Balkan countries: Serbia, Montenegro, Bosnia and Herzegovina and Macedonia. The research was conducted during the period from 2000 to 2017. The research results show that there is no statistically significant connection between political risk indices, GDP and unemployment rates and technology transfers, on the one hand, and FDI inflow rates, on the other. The results of the analysis reveal that the FDI rate is inversely proportional to the inflation rate in the host country.

Foreign Direct Investment Determinants in Oil Exporting Countries: Revisiting the Role of Natural Resources

This article explores the determinants of foreign direct investment (FDI) in oil-dependent economies and revisits the role of natural resources in attracting FDI to countries of this kind. Panel data from the six Gulf Cooperation Council (GCC) countries, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, have been employed, covering the period from 1990 to 2015. First, we investigate the FDI determinants during the entire sample period, and then run another investigation starting from the beginning of 2000, when the FDI in the GCC region increased substantially. The results show that there is a positive nexus between market growth, trade openness, inflation, infrastructure, oil price and FDI. Interestingly, oil reserves have a negative impact on FDI; this may be because countries with large reserves of oil like the GCC countries have enough financial resources to finance their economic development. This leads these governments to set up restrictions to protect their resources, thus reducing the amount of resource-seeking FDI. JEL Codes: E22, F21, F23, F43, O13

THE CONDITIONS OF DETERMINANTS OF THE FOREIGN DIRECT INVESTMENT DEVELOPMENT IN THE CONTEXT OF GLOBALIZATION OF ECONOMY / TIESIOGINIŲ UŽSIENIO INVESTICIJŲ PLĖTROS SĄLYGOS GLOBALIZACIJOS PROCESŲ KONTEKSTE

The article analyzes the complex issue of foreign direct investment and unequal distribution of its flows into different countries (the analysis of foreign direct investment determinants in the con-text of globalization). In the thesis there are the comprehensive theoretical study of foreign direct investment and the attraction of its flows consdering the nowadays context of globalization presented, the results of other empirical studies that analyzes foreign direct investment determinants were systematized. The model for the analysis of foreign direct investment determinants in the circumstances of globalization developed and presented. Based on this model studies to assess the determinants of foreign direct investment in Central and Eastern European countries carried out taking into account the differences of determinants among these countries and the countries of investment sources, also considering the possible lagging effects of these factors and the different volume of attracted foreign direct investment by different countries. Straipsnyje kompleksiškai vertinamos tiesioginės užsienio investicijos ir netolygaus tiesioginių užsienio investicijų srautų pritraukimo šalių atžvilgiu problema (tiesioginių užsienio investicijų pritraukimą globalizacijos sąlygomis lemiantys veiksniai). Atlikta teorinė studija, skirta tiesioginėms užsienio investicijoms, jų pritraukimo šiuolaikinėje globalizacijos aplinkoje reiškiniui, susisteminti empirinių tyrimų, vertinančių tiesioginių užsienio investicijų pritraukimą lemiančius veiksnius, rezultatai. Parengtas tiesioginių užsienio investicijų pritraukimą globalizacijos sąlygomis lemiančių veiksnių vertinimo modelis, kurio pagrindu atliktas tyrimas, leidžiantis įvertinti tiesioginių užsienio investicijų pritraukimą Centrinės ir Rytų Europos šalyse lemiančių veiksnių reikšmingumą ir poveikio kryptį, atsižvelgiant į šių veiksnių skirtumus tarp šių šalių ir šalių, investicijų šaltinių, taip pat atsižvelgiant į galimą laiko atžvilgiu atsiliekantį šių veiksnių poveikį ir į šalių pritraukiamų tiesioginių užsienio investicijų mastą.