Impact of FDI Restrictions on Inward FDI in OECD Countries

2012 ◽  
Vol 12 (3) ◽  
pp. 1850265 ◽  
Author(s):  
Madanmohan Ghosh ◽  
Peter Syntetos ◽  
Weimin Wang
Keyword(s):  
Direct Investment ◽  
National Development ◽  
Oecd Countries ◽  
Policy Changes ◽  
Foreign Companies ◽  
Goods And Services ◽  
Long Run ◽  
The World ◽  
Short Run ◽  
The Impact

Attracting FDI has become an integral part of the national development strategies in many economies, as it is generally believed that the benefits from foreign direct investment (FDI) outweigh its drawbacks. The UNCTAD in its World Investment Report (2006) highlights that there were 205 FDI related policy changes across the world in 2005, and most of these changes made conditions more favourable for foreign companies to enter and operate. However, FDI is still far less liberalized than trade in goods and services. Recent studies undertaken at the OECD show that although declined significantly since 1980s, barriers to inward FDI are still widespread in OECD countries. This paper explores the impact of FDI restrictions on inward FDI stocks using panel time series (1981-2004) data for 23 OECD countries. Our empirical results show that FDI restrictions do have significant impact on inward FDI stocks. The estimated short-run elasticity of inward FDI stocks with respect to FDI restrictions is in the range between –0.06 to –0.14, and the corresponding long-run elasticity is in the range between –0.64 to –1.49. This implies that by reducing barriers to FDI, countries such as Canada can significantly increase their level of inward FDI stocks.

An Econometric Analysis on the Relationship between Globalisation and Inequality in South Africa

2020 ◽  
Vol 11 (1) ◽  
pp. 89-89
Author(s):  
Jacques de Jongh
Keyword(s):  
South Africa ◽  
Well Being ◽  
Causality Analysis ◽  
Global Integration ◽  
Development Indicators ◽  
Long Run ◽  
The World ◽  
Distribution Of Resources ◽  
Short Run ◽  
The Impact

Globalisation has had an unprecedented impact on the development and well-being of societies across the globe. Whilst the process has been lauded for bringing about greater trade specialisation and factor mobility many have also come to raise concerns on its impact in the distribution of resources. For South Africa in particular this has been somewhat of a contentious issue given the country's controversial past and idiosyncratic socio-economic structure. Since 1994 though, considerable progress towards its global integration has been made, however this has largely coincided with the establishment of, arguably, the highest levels of income inequality the world has ever seen. This all has raised several questions as to whether a more financially open and technologically integrated economy has induced greater within-country inequality (WCI). This study therefore has the objective to analyse the impact of the various dimensions of globalisation (economic, social and political) on inequality in South Africa. Secondary annual time series from 1990 to 2018 were used sourced from the World Bank Development indicators database, KOF Swiss Economic Institute and the World Inequality database. By using different measures of inequality (Palma ratios and distribution figures), the study employed two ARDL models to test the long-run relationships with the purpose to ensure the robustness of the results. Likewise, two error correction models (ECM) were used to analyse the short-run dynamics between the variables. As a means of identifying the casual effects between the variables, a Toda-Yamamoto granger causality analysis was utilised. Keywords: ARDL, Inequality, Economic Globalisation; Social Globalisation; South Africa

scholarly journals The long run relationship between fish production, marine trade balance and foreign direct investment

2020 ◽  
Vol 5 (3) ◽  
pp. 271-280
Author(s):  
Naseem H. Jamei ◽  
Mira Nurmakhanova ◽  
Shahbaz Mustafa ◽  
Alloysius Egbulonu ◽  
Wagdi Hadidan
Keyword(s):  
Foreign Direct Investment ◽  
Trade Balance ◽  
Direct Investment ◽  
Design Methodology ◽  
Fish Production ◽  
Content Type ◽  
Gulf Countries ◽  
Long Run ◽  
Short Run ◽  
The Impact

Purpose This paper aims to focus on testing the long-run relationship between fish production and two main variables, the foreign direct investment inflow and the marine trade balance in Oman, which is one of the Arab Gulf countries, during the period 1985-2016. Design/methodology/approach This study uses what known as the two-step Engle–Granger cointegration test to give evidence for the long-run relationship among the variables. Findings The results show that there are a negative long- and short-run relations between fish production and marine trade balance; moreover, any shocks will be corrected within two periods at the most.  Originality/value This study is one of few studies in using the econometric models to study the impact of fish production on marine trade balance and foreign direct investment.

scholarly journals Foreign Direct Investment and Trade Components in Context of Pakistan

2016 ◽  
Vol 12 (34) ◽  
pp. 384 ◽  
Author(s):  
Muhammad Akram Gilal ◽  
Khadim Hussain ◽  
Muhammad Ajmair ◽  
Sabahat Akram
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Annual Data ◽  
Investment Liberalization ◽  
Long Run ◽  
Short Run ◽  
The Impact

Objective of this paper was to evaluate the impact of foreign direct investment (FDI) on trade components (exports and imports) of Pakistan using annual data from 1975 to 2013. Engle and Granger two step cointegration method was used for conducting the analysis. This method was adopted because all the variables of interest were non stationary in level and stationary at first difference. Results provide evidence of long run cointegrating relationship as well as short run relationship between FDI and trade components. A rise in FDI causes both exports and imports to increase. Based on these empirical findings, we strongly recommend Government of Pakistan to focus on the strategy of investment liberalization as well as trade openness.

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 THEORETICAL AND METHODOLOGICAL ASPECTS OF DETERMINING THE INFLUENCE OF GLOBALIZATION PROCESSES ON THE DEVELOPMENT OF THE ECONOMY OF UKRAINE

2021 ◽  
Author(s):  
Svitlana Bestuzheva ◽  
Viktoria Kozub
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
World Economy ◽  
Modern Trend ◽  
Tax Rate ◽  
Goods And Services ◽  
The World ◽  
World Economic ◽  
The Impact

The paper proposes a scientific approach to determining the impact of globalization processes on the development of Ukraine’s economy based on the analysis of the dynamics and modeling of indicators of the degree of integration of Ukraine’s economy into the system of world economic relations. Globalization is seen as a modern trend in the world economy as a system of interconnected and interdependent economic entities, among which a significant place is occupied by countries. The authors determine the degree of Ukraine's integration into the world economic space by its place in the ratings of globalization and economic openness. Analysis of the dynamics of the degree of integration of Ukraine's economy into the global economy is based on GDP, export and import quotas during 2006 – 2020. Based on the results of the analysis, the authors developed an econometric model for assessing the impact of factors on the globalization index of Ukraine, identified the most significant positive factors, namely the volume of exports of goods and services as a percentage of GDP, GDP, the ratio of foreign direct investment to GDP, the share of innovative exports export of goods and services of the country. The import quota and the corporate income tax rate have been identified as negative factors. Based on the results obtained during the modeling, the authors have developed and proposed a sequence of measures to increase the level of openness of Ukraine's economy in the context of its globalization. Perspective forms of globalization in the context of forming a new perspective of the international community on changing the vector of world economy - from globalization to regionalization and nationalization which have materialized in increasing the volume and diversification of the structure of international trade, intensification of international financial transactions, the emergence of transnational business, a sharp increase in foreign direct investment and intensification of international labor migration.

scholarly journals Foreign Direct Investment and External Debt Impacts Assessment on Environmental Resources Depletion in Nigeria

2021 ◽  
Vol 50 (4) ◽  
pp. 361-380
Author(s):  
Aderopo Raphael Adediyan ◽  
Uchenna Kingsley Chigozie ◽  
Venus Nmakanmma Obadoni
Keyword(s):  
Foreign Direct Investment ◽  
Crude Oil ◽  
Direct Investment ◽  
External Debt ◽  
Debt Management ◽  
Environmental Resources ◽  
Long Run ◽  
Depletion Rate ◽  
Short Run ◽  
The Impact

The public interest in justness, equity and fairness in the use of environmental resources between the present and future generations have raised concern about the current depletion rate of environmental resources in Nigeria. Several socioeconomic factors are involved. Worrisome however is the inflow of foreign direct investment and external debt escalation in recent years in the economy. Importantly, we asked, do they contribute to the depletion of environmental resources in Nigeria? In that, we modelled the implications of growth in FDI and external debt on four cases of environmental resources depletion (forestry, solid minerals, fisheries, and crude oil resources productions). The estimated results suggested that though the depletion rate of environmental resources like crude oil depends largely, over the long run and short run, on the movement in FDI inflow, critical to the level of depletion of the forest is the short run effect of external debt. Furthermore, the depletion level of fisheries responds positively only to a change in FDI with a lag in the short run. In terms of solid minerals, we found a long run impact of external debt. Therefore, provided the impact of a rise in FDI and external debt on the depletion of environmental resources is subject to the particular resource and time in Nigeria, selective policies based on the FDI and external debt management is appropriately adequate to control the level of depletion of environmental resources in Nigeria for the benefit of the future generation.

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 Impact of Foreign Direct Investment, Trade Openness, Domestic Demand, and Exchange Rate on the Export Performance of Bangladesh: A VEC Approach

2012 ◽  
Vol 2012 ◽  
pp. 1-10 ◽  
Author(s):  
Bishnu Kumar Adhikary
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Export Performance ◽  
Trade Openness ◽  
Domestic Demand ◽  
Vec Model ◽  
Long Run ◽  
Short Run ◽  
The Impact

This paper investigates the impact of foreign direct investment (FDI), trade openness, domestic demand, and exchange rate on the export performance of Bangladesh over the period of 1980–2009 using the vector error correction (VEC) model under the time series framework. The stationarity of the variables is checked both at the intercept and intercept plus trend regression forms under the ADF and PP stationarity tests. The Johansen-Juselius procedure is applied to test the cointegration relationship between variables followed by the VEC regression model. The empirical results trace a long-run equilibrium relationship in the variables. FDI is found to be an important factor in explaining the changes in exports both in the short run and long-run. However, the study does not trace any significant causal relationship for the cases of trade openness, domestic demand, and exchange rate. The study concludes that Bangladesh should formulate FDI-led polices to enhance its exports.

scholarly journals Does Inward Foreign Direct Investment Promote Export? Empirical Evidence from Sri Lanka

2018 ◽  
Vol 8 (3) ◽  
pp. 1
Author(s):  
Samantha NPG ◽  
Liu Haiyun
Keyword(s):  
Foreign Direct Investment ◽  
Sri Lanka ◽  
Direct Investment ◽  
Export Performance ◽  
Real Effective Exchange Rate ◽  
Domestic Investment ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Bound Test

Export-led growth hypothesis assumed that long-term economic growth can be achieved through higher exports. Foreign Direct Investment (FDI) is one of the determinants of export performance that can have a substitute effect or complementary relationship to export. The aim of this study is to investigate the impact of inward FDI on the export performance of Sri Lanka during the period from 1980 to 2016. Auto Regressive Distributed Lag (ARDL) model and bound test are applied to identify the long-run relationship and short-run dynamics of the selected variables. The short-run causality is checked by applying the Granger causality test. The ARDL bound test confirms long-run relationship among the variables. The study finds positive insignificant long run and short-run relationships between FDI and exports in Sri Lanka for the data period. Exports are highly sensitive to GDP and real effective exchange rate in the short-run and to domestic investment in the long-run. In order to promote exports via FDI, government policy should focus on attracting more FDI by drawing attention to national competitiveness. The study suggests a comprehensive sector level investigation on the impact of FDI on export performance of Sri Lanka.

scholarly journals Impact of BASEL III on India

2017 ◽  
Vol 4 (1) ◽  
pp. 23-28
Author(s):  
Aastha Jain
Keyword(s):  
Financial System ◽  
Basel Ii ◽  
Basel Iii ◽  
Banking Supervision ◽  
Dynamic Changes ◽  
Long Run ◽  
The World ◽  
Short Run ◽  
Indian Banks ◽  
The Impact

The Basel Committee on Banking Supervision (BCBS) set the first of capital accords in 1988, called the Basel I. Due to the dynamic changes in the world of financial system Basel I gave way to Basel II. Basel II plagued with the problem of pro-cyclicality paved the way for Basel III. India adopted Basel III norms in 2012. The present paper studies the impact of Basel III on India. In the short run, it will lead to a reduction in profitability of banks, curtailed credit to the economy and it is accused of being a needless burden on the Indian banks. But in the longer run, it will keep India integrated with the rest of the world. It will make the Indian financial system stronger, more stable and sound. It boils down to a trade-off between short-term costs and long run growth benefits.

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