scholarly journals Financial Liberalization, Economic Growth and Investment Strategy: Lessons from Taiwan for New Industrial Countries

2015 ◽  
Vol 3 (2) ◽  
pp. 188 ◽  
Author(s):  
Yu-Wei Lan ◽  
Dan Lin ◽  
Lu Lin
Keyword(s):  
Economic Growth ◽  
Institutional Investors ◽  
Foreign Capital ◽  
Investment Strategy ◽  
Capital Inflows ◽  
Investment Efficiency ◽  
The Real ◽  
Foreign Capital Inflows ◽  
Foreign Institutional Investors ◽  
The Impact

<p><em>To examine the impact of foreign capital inflows on Taiwan’s economy after internet bubbles of 2000, this study adopts data from the first quarter of 2001 to the second quarter 2015 to test if foreign capital inflows have positive impacts on Taiwan’s economic growth. This study also uses program trading and aims to prove that with financial liberalizations, the investment efficiency of foreign institutional investors is better than domestic institutional investors.</em></p><p><em>The results from the error correction model shows that capital formation, domestic savings and foreign direct investment all have positive relationships with the real economic growth. However, the rate of financing and foreign debt and depreciation all have negative relationships with the real economic growth. The results are all statistically significant. Hence, they do not completely support the hypothesis that foreign capital inflows are beneficial for economic growth.</em></p><p><em>Moreover, this study proves that the futures market in Taiwan is not strong-form market efficient. This result provides support for the hypothesis that the investment efficiency of foreign institutional investors is higher than that of domestic institutional investors. Investors can therefore raise their investment performance by following the investment strategies of foreign institutional investors.</em></p>

Determinants of Foreign Capital Inflows in Emerging Markets: The Role of Institutional Quality

2021 ◽  
Vol 7 (3) ◽  
Author(s):  
Immaculate Simiso Nxumalo ◽  
Patricia Lindelwa Makoni
Keyword(s):  
Economic Growth ◽  
Emerging Markets ◽  
Foreign Capital ◽  
Emerging Market ◽  
Institutional Quality ◽  
Capital Inflows ◽  
Emerging Market Economies ◽  
Market Economies ◽  
Foreign Capital Inflows ◽  
The Impact

Purpose: The purpose of the study was to examine the key determinants of foreign direct investment (FDI) and foreign portfolio investment (FPI) in emerging market economies, with greater emphasis placed on the impact of institutional quality. Design/Methodology/Approach: The study applied a panel data system generalised method of moments (GMM) model using annual data spanning the period 2007 to 2017, in respect of 12 emerging market economies. To measure institutional quality, the study adopted the Worldwide Governance Indicators, and constructed a composite index for institutional quality using the Principal Components Analysis (PCA) method. Findings: The results revealed that FDI in the selected emerging markets was attracted by institutional quality and economic growth. Capital account openness, institutional quality and economic growth were positive determinants of FPI. However, stock market development stood out as the key determinant factor for foreign capital inflows. Implications/Originality/Value: The implications of these findings are that, in their pursuit of foreign capital inflows, these emerging markets should continue to liberalise their economies and develop their financial markets. Importantly, such developments must be coupled with the strengthening of the formal governance institutions. Robust institutions would not only curb institutional weaknesses that deter international capital inflows, but would also insulate emerging markets from unfavourable effects of volatile capital flows.                                                            

Foreign capital inflows and economic growth: the experience of low-income countries in Sub Saharan Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Atif Awad
Keyword(s):  
Low Income ◽  
Foreign Capital ◽  
Ordinary Least Squares ◽  
Capital Inflows ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Content Type ◽  
Long Run ◽  
Foreign Capital Inflows ◽  
The Impact

Purpose This paper aims to investigate the long-run impact of selected foreign capital inflows, including aid, remittances, foreign direct investment (FDI), trade and debt, on the economic growth of 21 low-income countries in the Sub Saharan Africa (SSA) region, during the period 1990–2018. Design/methodology/approach To obtain this objective and for robust analysis, a parametric approach, which was dynamic ordinary least squares, and a non-parametric technique, which was fully modified ordinary least squares, were used. Findings The results of both models confirmed that, in the long run, trade and aid affected the growth rate of the per capita income in these countries in a positive way. However, external debt seemed to have an adverse influence on such growth. Originality/value First, this is the initial study that has addressed this matter across a homogenous group of countries in the SSA region. Second, while most of the previous studies regarding capital inflows into the SSA region have focused on the impact of only one or two aspects of such foreign capital inflows on growth, the present study, instead, examined the impact of five types of foreign capital inflows (aid, remittances, FDI, trade and debt).

The impact of foreign capital inflows on economic growth and employment in Egypt

2019 ◽  
Vol 36 (3) ◽  
pp. 258-276
Author(s):  
Hanan AbdelKhalik Abouelfarag ◽  
Mohamed Sayed Abed
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Foreign Investment ◽  
External Debt ◽  
Capital Inflows ◽  
Aggregate Model ◽  
Employment Level ◽  
Content Type ◽  
Foreign Capital Inflows ◽  
The Impact

Purpose The purpose of this paper is to trace the effects of both foreign direct investment (FDI) and external debt on economic growth and employment in Egypt over the 1985–2014 period. Design/methodology/approach The empirical analysis includes three stages: an aggregate time series analysis, a panel model that includes six economic sectors and a set of single-sector models. The “autoregressive distributed lag” approach is utilized either in the time series or in the panel models. Findings The empirical results of this research reveal that foreign investment exerts a weak positive effect on economic growth and employment in Egypt. External debt exerts an insignificant effect on economic growth and employment in the aggregate model. The sectoral analysis reveals that the effect varies greatly between sectors; the effect of FDI on output is positive in the financial, tourism and other service sectors, while it is insignificant in the agricultural, construction and manufacturing sectors. Practical implications It is important not to depend on external debt as an easy way to obtain capital. Greater efforts should be exerted to increase the absorptive capacity of the Egyptian economy so as to benefit from the positive spillover effect of foreign investment as much as possible. Originality/value With respect to Egypt, very limited studies have focussed on the role of external debt on growth and that of FDI and external debt on the employment level. There is no general agreement concerning the effect of FDI on economic growth. Therefore, this research explores the effect of FDI and external debt on the Egyptian economy utilizing both aggregate and sectoral data.

scholarly journals Cross Border Portfolio Investment and The Volatility of Stock Market Index and Rupiah's Rate

2015 ◽  
Vol 17 (4) ◽  
pp. 403-432 ◽  
Author(s):  
Al Muntasir
Keyword(s):  
Foreign Capital ◽  
Composite Index ◽  
Capital Flow ◽  
Capital Inflows ◽  
Stock Market Index ◽  
Dynamic Relationship ◽  
Market Index ◽  
Daily Data ◽  
Foreign Capital Inflows ◽  
The Impact

This paper use daily data during the period 2010-2014 to analyse the impact of foreign capital inflows on capital market volatility and on the volatility of Rupiah’s rate. The results shows the flow of foreign capital positively affect the Jakarta Composite Index (JCI) but not the rate of Rupiah. Using Vector Error Correction Model, this paper finds a cointegrated and dynamic relationship between the changes in foreign capital flow in Indonesia, with the JCI and the exchange rate of Rupiah against USD. Changes in the Rupiah’s rate significantly affect the foreign capital flow and the JCI, while the JCI does not significantly affect the flow of foreign capital and the changes of Rupiah’s rate.

scholarly journals The impact of foreign capital inflows on poverty in Vietnam: An empirical investigation

2021 ◽  
Vol 7 (2) ◽  
pp. 31-49
Author(s):  
Mercy T. Musakwa ◽  
Nicholas M. Odhiambo ◽  
Sheilla Nyasha
Keyword(s):  
Foreign Capital ◽  
Household Consumption ◽  
Capital Inflows ◽  
Infant Mortality Rate ◽  
Consumption Expenditure ◽  
Poverty Measure ◽  
Long Run ◽  
Short Run ◽  
Foreign Capital Inflows ◽  
The Impact

Abstract This study investigates the impact of foreign capital inflows on poverty in Vietnam, using annual time series data from 1990 to 2018. The study was motivated by the need to establish if burgeoning foreign capital inflows in Vietnam can support the poverty alleviation agenda. Foreign direct investment (FDI) and external debt were used as proxies for foreign capital inflows; and infant mortality rate, Human Development Index (HDI) and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag (ARDL) approach, the study found foreign direct investment to reduce poverty in the short run and long run when household consumption expenditure was used as a poverty measure. However, the study found FDI to worsen poverty in the short run when infant mortality rate and HDI were used as poverty proxies. The study found external debt to have poverty mitigating effect in the short run regardless of the poverty measure used and in the long run only when household consumption expenditure was used as a poverty measure.

scholarly journals Impact of Foreign Capital Inflows on Household Savings in Pakistan

2020 ◽  
Vol 5 (4) ◽  
Author(s):  
Muhammad Abdullah Idrees ◽  
Ayesha Khan ◽  
Muhammad Arsalan Khan ◽  
Muhammad Bilal Raees ◽  
Muniza Syed
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Aid ◽  
Direct Investment ◽  
Foreign Capital ◽  
Capital Inflows ◽  
Household Savings ◽  
Statistical Tools ◽  
Household Saving ◽  
Foreign Capital Inflows ◽  
The Impact

This study aims to discover the impact of foreign capital inflows (FDI, RT and FA) on household savings of Pakistan. Data used in this study has been obtained from the website of State Bank of Pakistan for the period of 1981-2010. Statistical tools including multiple regressions analysis was applied for analysis. Results explain that foreign direct investment (FDI), remittances (RT) are having positive and significant impact on household saving (HS) but foreign aid (FA) is having negative and insignificant impact on household saving, so it is recommended that if a developing country like Pakistan wants to increase the household saving it should give thoughtful importance to FDI and RT than FA with respect to household savings in Pakistan.

scholarly journals Inflationary Rate in Nigeria: Impact of Foreign Capital Inflows

2021 ◽  
Vol 7 (1) ◽  
pp. 44-54
Author(s):  
Olabode Eric Olabisi
Keyword(s):  
Foreign Capital ◽  
Negative Impact ◽  
Forecast Error ◽  
Daily Basis ◽  
The Body ◽  
Capital Inflows ◽  
Parameter Estimates ◽  
Long Run ◽  
Foreign Capital Inflows ◽  
The Impact

As the prices of daily needs are aggravating in Nigeria, the value of the country’s currency (naira) is less appreciated on a daily basis, and this pose a threat to a good standard of living in Nigeria. Therefore, this study investigated the impact of foreign capital inflows on the persistent increase in inflation in Nigeria over the period of 1985 to 2019. The Autoregressive Distributed Lags was used to obtain the parameter estimates of the long run relationship between foreign capital inflows and inflation. By using the Forecast Error Variance Decomposition techniques, the cause-effect analysis of foreign capital inflows and inflation was determined. Results provide evidence of a long run relationship between the series. Results further indicate that inflation is sensitive to foreign capital inflows variables such as net official development assistance received and remittance inflows in Nigeria. Policies that reduce the negative impact on inflation are recommended in the body of the paper.

The Impact of Foreign Capital Inflow on Savings and Investment: The Case of Pakistan

1987 ◽  
Vol 26 (4) ◽  
pp. 787-789 ◽  
Author(s):  
Naheed Aslam
Keyword(s):  
Interest Rates ◽  
Foreign Capital ◽  
Capital Inflow ◽  
Capital Inflows ◽  
Foreign Assistance ◽  
Domestic Capital ◽  
Foreign Loans ◽  
Foreign Capital Inflows ◽  
The Impact ◽  
Over Time

The paper examines the role of foreign capital in the context of savings and investment for Pakistan for the period of 1963-64 - 1984-85. The question of the impact of foreign capital inflows on domestic resources has assumed primary importance in view of the increasing debt burden and declining concessionality of foreign loans. The data analysis! , based on the classification of loans according to rates of interest and terms to maturity, reveals that the terms and conditions of foreign loans have become more stringent over time, i.e. higher interest rates and lower maturity periods. The worsening terms and conditions of external loans have resulted in increasing reverse flow obligations. Debt servicing as a ratio of export earnings and foreign capital inflow has rapidly increased over time. During 1960-61 - 1970-71, debt-servicing obligations could be met from 14.85 percent of foreign assistance or 10.29 percent of our commodity export earnings, whereas during 1980-81 - 1984-85 foreign debt servicing could be financed from 29.63 percent of export earnings or 64.79 percent of foreign assistance. The heavy debt-servicing burden and unfavorable outlook for external finance has made it absolutely essential that foreign capital funds should generate internally the capacity to repay these loans. This could be facilitated if foreign capital inflows augment domestic capital formation efforts.

Sign in / Sign up

Export Citation Format

Share Document