Journal ArticleDOI
Determinants of foreign direct investment in developing countries: a panel data study
Reenu Kumari,Anil K. Sharma +1 more
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TLDR
In this paper, the authors identify key determinants of foreign direct investment (FDI) inflows in developing countries by using unbalanced panel data set pertaining to the years 1990-2012.Abstract:
Purpose
The purpose of this paper is to identify key determinants of foreign direct investment (FDI) inflows in developing countries by using unbalanced panel data set pertaining to the years 1990-2012. This study considers 20 developing countries from the whole of South, East and South-East Asia.
Design/methodology/approach
Using seven explanatory variables (market size, trade openness, infrastructure, inflation, interest rate, research and development and human capital), the authors have tried to find the best fit model from the two models considered (fixed effect model and random effect model) with the help of Hausman test.
Findings
Fixed effect estimation indicates that market size, trade openness, interest rate and human capital yield significant coefficients in relation to FDI inflow for the panel of developing countries under study. The findings reveal that market size is the most significant determinant of FDI inflow.
Research limitations/implications
Like any other study, this work also has some limitations. Lack of data on key determinants such as labor cost, exchange rate, corruption, natural resources, effectiveness of rule of law and political risk may be considered one such limitation. Further, controlling for variables such as exchange rate, corruption, labor cost and political risk could make significant improvements to this study.
Practical implications
This study has significant implications for policy makers, mangers and investors. Policy makers would be able to understand the importance of the major determinants of FDI mentioned in the paper, and take steps to formulate policies that encourage FDI. Such measures could include developing market size, making regulations more international trade friendly and investing in the nation’s human capital. Further, steps could be taken to keep interest rates and inflation rates under control as these factors have been found to influence FDI.
Originality/value
The sample of 20 developing nations chosen for this study has not been considered by any study earlier. This is a unique contribution to existing body of research, and highlights the originality value of this paper.read more
Citations
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Journal ArticleDOI
Institutional determinants of foreign direct investment inflows: evidence from emerging markets
Justin Paul,Pravin Jadhav +1 more
TL;DR: In this paper, the authors explore the role of institutional determinants of FDI using data from 24 emerging markets including China, India, Indonesia, Turkey, Thailand, Malaysia and Pakistan, and find that infrastructure quality, trade cost measured by tariff and non-tariff barriers, institutional quality measured by effective rule of law, political stability, regulatory quality and control on corruption are significant determinants for FDI in emerging markets.
Journal ArticleDOI
Uncertainty, financial development, and FDI inflows: Global evidence
Canh Phuc Nguyen,Gabriel Lee +1 more
TL;DR: In this article, the authors analyzed uncertainty and financial development effects on foreign direct investment (FDI) inflows using a global sample of 116 countries over 1996 - 2017 and found that countries with a higher level of economic policy uncertainty receive lower FDI inflows.
Journal ArticleDOI
The short-run and long-run dynamics among FDI, trade openness and economic growth: using a bootstrap ARDL test for co-integration in selected South Asian countries
TL;DR: In this article, the authors analyzed the dynamic causal relationship between foreign direct investment (FDI), gross domestic product (GDP) and trade openness (TO) on a set of five selected South Asian countries.
Journal ArticleDOI
Political risk management of foreign direct investment in infrastructure projects: Bibliometric-qualitative analyses of research in developing countries
TL;DR: A bibliometric-qualitative review of current literature on political risk in foreign infrastructure in developing countries is presented in this paper, where the authors identify the current body of knowledge in this area, uncover deficiencies and lay the foundation for further practical political risk management research in FDII.
Journal ArticleDOI
Foreign direct investment into BRICS: an empirical analysis
Javeria Maryam,Ashok Mittal +1 more
TL;DR: In this paper, the authors examined empirically the role of selected macroeconomic variables in determining FDI inflows in the context of BRICS countries and employed the Pooled Mean Group (PMG) Auto-Regre...
References
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Journal ArticleDOI
Specification Tests in Econometrics
TL;DR: In this article, the null hypothesis of no misspecification was used to show that an asymptotically efficient estimator must have zero covariance with its difference from a consistent but asymptonically inefficient estimator, and specification tests for a number of model specifications in econometrics.
Journal ArticleDOI
The calculus of consent : logical foundations of constitutional democracy
James M. Buchanan,Gordon Tullock +1 more
TL;DR: The Calculus of Consents as mentioned in this paper analyzes the calculus of the rational individual when faced with questions of constitutional choice and examines the (choice) process extensively only with reference to the problem of decision-making rules.
Journal ArticleDOI
How does foreign direct investment affect economic growth
TL;DR: In this article, the effect of FDI on economic growth in a cross-country regression framework was investigated. And they found that FDI contributes to economic growth only when a sufficient absorptive capability of the advanced technologies is available in the host economy.
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