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Foreign Direct Investment and Economic Growth in BRICS Economies: A Panel Data Analysis
... The factors determining economic growth are complex and complicated, and internal factors such as capital formation (physical and human) and savings have been deemed crucial for higher economic growth (Kaldor 1957;Solow 1994). Similarly, external factors such as FDI, exports, imports, foreign debts, foreign remittance, and foreign aid are also equally significant in accelerating economic growth, especially in developing nations (Bird and Choi 2020;Islam 2022;Agrawal 2015;Ekanayake 1999;Galiani et al. 2017). Economic growth is crucial, as it enhances the standard of living of the common man through better opportunities in education, health, and other basic living needs. ...
... Several studies including, Hansen and Rand (2006), Agrawal (2015), and Sarker and Khan (2020) revealed a momentous and positive association between foreign direct investment and the growth of national income in different nations. Al Mamun and Nath (2005) examined the validity of the Export-Led Growth (ELG) hypothesis on the quarterly data obtained from Bangladesh between 1976 and 2003. ...
... Goh et al. (2017) reinvestigated the relationship between FDI, exports, and economic growth in Asian economies using a bootstrap ARDL test. Some studies have broadly investigated the existing relationship between FDI and economic growth nexus and discovered a positive relationship between them (Bird and Choi 2020; Hansen and Rand 2006;Agrawal 2015;Narayan et al. 2022). However, studies conducted by Ayanwale (2007) and Rakhmatullayeva et al. (2020) revealed no relationship between FDI and economic growth, suggesting that FDI has no meaningful influence on economic growth. ...
In this era of globalization, attention has been paid to the ways of providing external finance to support the growth path of developing countries. Hence, this study aims to measure the external dependency of economic growth via an assessment of the role of the various external factors, contributing to Bangladesh’s economic growth. To this end, an Auto-Regressive Distributed Lag (ARDL) approach was employed to analyze time series data from 1976 to 2021. The study revealed that external determinants like foreign remittances, foreign direct investment (FDI), exports, and foreign aid drive the economic growth of Bangladesh progressively. In contrast, external debt and imports adversely affect the growth of the Bangladeshi economy. The study recommends that policymakers undertake the necessary steps to provide adequate socioeconomic infrastructure, a sound environment for international trade, and overall, a sound macroeconomic condition. These initiatives help to increase the inflow of foreign direct investments, foreign remittances, and export earnings, thereby decreasing the dependency on external debts in the financing of deficit budgets.
... The factors determining economic growth are complex and complicated, and internal factors such as capital formation (physical and human) and savings have been deemed crucial for higher economic growth (Kaldor 1957;Solow 1994). Similarly, external factors such as FDI, exports, imports, foreign debts, foreign remittance, and foreign aid are also equally significant in accelerating economic growth, especially in developing nations (Bird and Choi 2020;Islam 2022;Agrawal 2015;Ekanayake 1999;Galiani et al. 2017). Economic growth is crucial, as it enhances the standard of living of the common man through better opportunities in education, health, and other basic living needs. ...
... Several studies including, Hansen and Rand (2006), Agrawal (2015), and Sarker and Khan (2020) revealed a momentous and positive association between foreign direct investment and the growth of national income in different nations. Al Mamun and Nath (2005) examined the validity of the Export-Led Growth (ELG) hypothesis on the quarterly data obtained from Bangladesh between 1976 and 2003. ...
... Goh et al. (2017) reinvestigated the relationship between FDI, exports, and economic growth in Asian economies using a bootstrap ARDL test. Some studies have broadly investigated the existing relationship between FDI and economic growth nexus and discovered a positive relationship between them (Bird and Choi 2020; Hansen and Rand 2006;Agrawal 2015;Narayan et al. 2022). However, studies conducted by Ayanwale (2007) and Rakhmatullayeva et al. (2020) revealed no relationship between FDI and economic growth, suggesting that FDI has no meaningful influence on economic growth. ...
In this era of globalization, attention has been paid to the ways of providing external finance to support the growth path of developing countries. Hence, this study aims to measure the external dependency of economic growth via an assessment of the role of the various external factors, contributing to Bangladesh’s economic growth. To this end, an Auto-Regressive Distributed Lag (ARDL) approach was employed to analyze time series data from 1976 to 2021. The study revealed that external determinants like foreign remittances, foreign direct investment (FDI), exports, and foreign aid drive the economic growth of Bangladesh progressively. In contrast, external debt and imports adversely affect the growth of the Bangladeshi economy. The study recommends that policymakers undertake the necessary steps to provide adequate socioeconomic infrastructure, a sound environment for international trade, and overall, a sound macroeconomic condition. These initiatives help to increase the inflow of foreign direct investments, foreign remittances, and export earnings, thereby decreasing the dependency on external debts in the financing of deficit budgets.
... The linkage between the indigenous suppliers, foreign direct investment, and domestic sources has a spillover effect through backward connection. Agrawal (2015), Sengupta and Puri (2018), Verma (2020) conform the positive association amongst the FDI and Economic growths in the economies of concerns in all of the studies. ...
... On part of economic growth, Agrawal (2015) indicates that FDI has a positive long-run association with Economic growth. Author recommends encouraging the potential sources of economic development which would simulate and enhance foreign investments. ...
This paper analyses the relationship between inflation measured in terms of CPI and FDI, GDP, and population. The paper intends to examine the consequences of FDI on inflation. The unbalanced panel data of 88 countries from 1970 to 2021 was employed for the said purpose. The empirical results have been estimated using Pooled OLS, Fixed Effect, and Random Effect Model. Moreover, control variables GDP and Population were introduced to strengthen the causal conclusion. Fixed Effect model was used for the analysis. The pool-ability of the data is tested by the Breusch and Pagan LM test which confirmed that Pooled OLS is not appropriate for the model. The Hausman Specification Test was then conducted to choose between the Fixed Effect or Random Effect model. The Hausman Specification Test for the Model suggests that the fixed effect model is appropriate for data analysis. Thus, fixed effect regression is used to find the consequences of explanatory and the control variables on the dependent variable. FDI as an explanatory variable has a negative relationship with Inflation, even in the case of controlling GDP and Population. The control variable, GDP, displayed a negative association with Inflation, while Population is depicted to have a positive relationship with Inflation.
... Figure 3 depicts the trends of goods and services exports in China over the years. 1981198419871990199319961999200220052008201120152016Billion Dollars China N. Sey İzmir İktisat Dergisi / İzmir Journal of Economics Yıl/Year: 2024 China's trade has not only increased in terms of volume but has also shown significant improvement in the quality of its exported products over the years (Silva-Ruete, 2006). Initially, during the early stages of the reform, China's exports were characterized by cheap and poor-quality products. ...
... The research concluded that FDI has a highly positive impact on economic growth. Agrawal (2015) analyzed the relationship between FDI and growth in six BRICS countries between 1989 and 2012. The study found a significant and balanced relationship between the two variables. ...
China achieved rapid economic development as a result of the reforms implemented in 1978. It is widely believed that foreign direct investments and foreign trade, which increased alongside these reforms, had a significant impact on this rapid economic progress. Consequently, this study sought to examine the effectiveness of foreign direct investments and foreign trade in facilitating China's rapid economic growth between 1978 and 2016, utilizing the SVAR method. Within the scope of the study, three variables were utilized: the growth rate, the ratio of foreign direct investments in GDP, and the ratio of foreign trade volume in GDP. In the initial part of the study, the growth process, foreign direct investments, and foreign trade of China were evaluated using graphical representations. In the following section, in the empirical part, initially crisis periods were incorporated into the model as a dummy variable in order to prevent crisis periods to affecting the results. Following this, unit root tests were conducted, and it was concluded that the series were non-stationary at the level but became stationary after taking their first differences. Therefore, in this study, the first differences of the series were utilized for analysis. In the subsequent part, autocorrelation and heteroskedasticity tests were applied to the model. The results of these tests indicated that the model is suitable for evaluation. Consequently, in the next part, the study proceeded to evaluate the impulse-response functions and variance decomposition results of the model. As a result of these analyses, it was concluded that both foreign direct investments and foreign trade, but especially foreign direct investments, have a significant impact on China's economic growth.
... Different opinions were listed from other scholars regarding the effectiveness of foreign direct investment on economic growth. Agrawal (2015) for example discussed the FDI contribution toward economic growth as dependent on a local country wide situation and thus on every other country. ...
... According to authors such as Oudat et al. (2019), Muhammad et al. (2018) FDI was found to be positively related to economic growth. Agrawal (2015) stated that the influx of FDI to economic progress is dependent on the nation's position, this is consistent with findings and as Al-Froukh (2019) has argued that Jordan has incorporated international capital inflows in its economic endeavors, in order to improve economic and living standards of its people, meaning that Jordan standing is not opposing Foreign direct investment and aid. ...
The strong development of stock markets is reflected in acceleration in the number of IPOs and a very sharp increase in transaction volumes (amounts of securities traded). To understand the effects of stock market development on Jordan’s economy, this research adopted the use of secondary time series info. Based on the descriptive statistics approach adopted, there are specific findings that define the overall objectives of the study. The findings show that the stock growth and private sector credit expansion optimistically contributes to the economic prosperity and development of the Jordanian economy. Moreover, the research findings also indicate that a foreign direct investment, which also influences the country’s stock, has an outcome on the country’s economic development in the long run. Further, the research findings also show that the economic development of Jordan is not affected by the domestic credit awarded to the private sector. However, the findings also show that trade involving stock has a minimal effect on the development and growth of the Jordanian economy. Overall, the research reveals that the FDI, the total stock value of trade, and the nationwide credit to the private sector have an influence on the economic growth of a country.
... In developing countries, where capital deficit is among the main hindrances to economic growth, attracting foreign investments is an important goal for policymakers (Abdul Bahri et al., 2019). Therefore, FDI in developing economies is viewed as a key driver of economic growth through favorable effect on income generation from capital inflows, advanced technology, management skills, and creation of employment opportunities (Agrawal, 2015;Tintin, 2012). FDI can help reduce unemployment problems in the country. ...
... Worldwide FDI inflows represent a major source of external funding for capital-intensive projects in a recipient country (Agrawal, 2015). Developing countries such as Tanzania have taken significant steps in creating conducive environments for attracting foreign capital. ...
This study examines causal relationship between foreign direct investment (FDI) inflows and economic growth in Tanzania during 1990–2020. As financial development and trade were not incorporated in extant studies, we included them as intermediate variables because of their intermediation role in this study. FDI inflow is considered an important economic growth catalyst in developing economies. Neoclassical growth theories claim that it enhances economic growth by augmenting capital stock and technology. According to the neoclassical theories, FDI does not enhance the long-run growth rate but instead is related to the level of output. However, empirical evidence is rather mixed, with some supporting the neoclassical theoretical views on economic growth, while others opposing them. We employ the autoregressive distributed lag model and Granger causality tests to analyze the relationship. The results indicate that there exists a long-run relationship among the variables under considerations in Tanzania. Furthermore, the finding reveals positive and statistically significant unidirectional causality running from FDI inflow to economic growth in Tanzania in the long and short run. Hence, we conclude that Tanzania should emphasize FDI-led growth policies to enhance economic growth to realize the desired economic objectives.
... Also, Agrawal (2015), in his research, tried to study the relationship between foreign direct investment and economic growth in the five BRICS economies: Brazil, Russia, India, China, and South Africa, during the period 1989-2012. Foreign direct investment is an important factor contributing to economic growth and development in developing economies such as India. ...
... ized in 1970, has become the world's largest "core" industrial region by 2015. FDI can stimulate domestic investment, job creation, and economic growth (Hakimi & Hamdi, 2017;Agrawal, 2015;Herzer, 2010;Crespo & Fontoura, 2007). A UNCTAD investment report for 2019 shows that global/international FDI flows were weaker than expected in 2018, falling by 13 percent to $ 1.3 trillion. ...
... Economies around the world are developing different policies with the aim of attracting foreign investments as a way to develop and improve their internal and external positions. Developed infrastructure and financial markets, openness to trade and the quality of institutions, largely determine FDI inflows (Elboiashi, 2015;Agrawal, 2015;Chien-Chiang and Chun-Ping, 2019). FDIs makes it easier to introduce new technology and access the global market, with positive repercussions for real convergence. ...
The focus of this research is the nexus between foreign direct investments, FDIs, external imbalance and economic growth, in the case of Serbia in the period 2007-2024. From one side, convergence process towards more developed European economies implies fostering of economic growth i.e. real convergence, which is positively connected with FDIs inflows. From the other side, real convergence is usually accompanied with growing external imbalance i.e. current account deficit. The aim of this research is to shed more light onto these relations from the angle of national economy, under methodological framework of estimated VAR model. Empirical findings confirm that FDIs positively influence real convergence, while real convergence is connected with external imbalance deterioration. National economic authorities should continue efforts to maintain and attract FDIs as beneficial type of external capital inflows, having in mind their positive real repercussions and mediumterm external balancing. Nevertheless, essential and long-run efforts should be oriented towards resolving of chronic CA deficit, thereby increasing country's resistance to global crisis shocks and sudden stop episodes.
... Raihan (2024) has explored the impact of FDI and carbon emissions on growth in Vietnam. According to some research, FDI foreign direct investment signi icantly and favorably affects economic growth (Agrawal, 2015;Gui-Diby, 2014;Iamsiraroj, 2016;Iamsiraroj & Ulubaşoglu, 2015;Suendarti, 2023). Others (Adams & Opoku, 2015;Mahembe & Odhiambo, 2016;Mohamed, Singh, & Liew, 2013) claimed that there was either no association at all or a negative one between FDI and economic growth. ...
This research adds to the human capital and growth debate by examining the moderating role of net foreign direct investment inflows on the impact of human capital formation on growth in Pakistan while controlling renewable energy, carbon emission, and urbanization from 1990 to 2019. Furthermore, the study aims to explore the long-run and short-run interplay between human capital, physical capital, renewable energy, carbon emission, urbanization, and economic growth. The study also provides policy implications for achieving sustainable development goals. The autoregressive distributed lag framework has been used in an attempt to achieve the desired objectives. In order to assess the short-term impacts on the underlying variables, the error correction model is computed. The long-run estimations are obtained by applying the autoregressive distributed lag methodology. The findings show that foreign direct invesment, renewable energy, physical capital, and human capital formation all have positive effects on Pakistan's economic growth over the long and short terms. Foreign direct invesment greatly increases human capital, and this promotes economic growth. At the same time, urbanization and carbon emissions have negative effects on growth over the long and short terms. The study offers policy recommendations for the stakeholders based on the empirical findings, which will support sustainable development and equitable growth. To achieve sustainable development goal 4, which aims to protect inclusive and equitable quality education and promote lifetime learning opportunities as essential for human capital development, Pakistan should prioritize investing in the development of human capital through health and education. Prioritise policies that encourage the use of renewable energy sources to lower CO2 emissions to achieve environmental sustainability and inclusive growth. The government should also put policies in place that encourage foreign direct invesment inflows. SDGs 8 and 9—decent work, economic growth, support industry, innovation, and infrastructure—can be accomplished with the aid of attracting foreign direct investment and enhancing human capital.
... Further, Khan and Nawaz (2019) observed a positive correlation between trade openness, FDI and income distribution. Long-term benefits of FDI in BRICS, aligned with technical cooperation, were noted by Prabhakar et al. (2015) and Agrawal (2015). Joshua et al. (2020) identified FDI as a crucial element for South Africa's economic growth, noting that in 2017, BRICS attracted 19% of global FDI inflows (UNCTAD, 2018). ...
Purpose
This study aims to assess the efficiency of Brazil, Russia, India, China, South Africa (BRICS) countries in achieving sustainable development by analyzing their ability to convert resources and technological innovations into sustainable outcomes.
Design/methodology/approach
Using data envelopment analysis (DEA), the study evaluates the economic, environmental and social efficiency of BRICS countries over the period 2010–2018. It ranks these countries based on their sustainable development performance and compares them to the period 2000–2007.
Findings
The study reveals varied efficiency levels among BRICS countries. Russia and South Africa lead in certain sustainable development aspects. South Africa excels in environmental sustainability, whereas Brazil is efficient in resource utilization for sustainable growth. China and India, despite economic growth, face challenges such as pollution and lower quality of life.
Research limitations/implications
The study’s findings are constrained by the DEA methodology and the selection of variables. It highlights the need for more nuanced research incorporating recent global events such as the COVID-19 pandemic and geopolitical shifts.
Practical implications
Insights from this study can inform targeted and effective sustainability strategies in BRICS nations, focusing on areas such as industrial quality improvement, employment conditions and environmental policies.
Social implications
The study underscores the importance of balancing economic growth with social and environmental considerations, highlighting the need for policies addressing inequality, poverty and environmental degradation.
Originality/value
This research provides a unique comparative analysis of BRICS countries’ sustainable development efficiency, challenging conventional perceptions and offering a new perspective on their progress.
... The study's findings, which evaluated the impact of FDI on Nigeria's economy using OLS, suggested that FDI had a marginally favourable impact on production productivity in that nation. Agrawal (2015) assessed the relationship between foreign direct investment and economic growth in the five BRICS economies, namely, Brazil, Russia, India, China and South Africa over the period 1989 -2012. Cointegration and Causality analysis were applied. ...
The ARDL was used in this study to examine the impact of foreign direct investment inflows on Nigeria's economic performance from 1981 to 2020. The analysis starts with examining the stationarity of the data set using the Augmented Dickey-Fuller (ADF) unit root test. The Bounds test confirmed the existence of a negative association between FDI and the economy in the long run while in the short run, Portfolio Investment and Balance of Trade had a negative relationship on the economy and FDI maintained a positive relationship with the economy. Therefore the recommendations from this study are as follows Firstly, the government should ensure that the right economic and political environment is put in place for there to be some meaningful inflow of portfolio investment, secondly, the authorities in control should evaluate Nigeria's ease of doing business; currently, Nigeria ranks low; a higher ranking will encourage increased foreign involvement by bringing more FDI to Nigeria and thirdly government needs to grow the real sector of the economy. This will encourage export earnings, and improve our trade balance.
... Out of the BRICS nations, Russian CPI data is intentionally not considered for our study due to the ongoing war with Ukraine, as the overall results/output of our research can be spurious and will be void for arriving at any conclusions. Thus, BICS nations are considered for our research as past researchers have also discussed about the strong growth story of these countries (Agrawal, 2015;Guru and Yadav, 2019). The closing prices of Bitcoin and Ethereum were retrieved from coinmartketcap.com. ...
... Using vector error correction, the study found similar results as Odhiambo (2022) in the long run. In the same vein, Agrawal (2015) investigated the causal relationship between FDI and economic growth using data from 1989 to 2012 for BRICS (Brazil, Russia, India, China and South Africa). The study found a long-run causal flow from foreign direct investment to economic growth. ...
The increasing role of foreign capital inflows in reducing the disparity between government revenues and costs as well as impellent economic growth has motivated this study to establish the direction of causality between foreign direct investment (FDI), foreign aid, and economic growth in Kenya. By using annual time series data from 1970 to 2020 within bounds testing approach to cointegration and the error correction model ECM-based Granger-causality, the study found a bidirectional causality between foreign aid and economic growth in the short run and a unidirectional causal flow from foreign aid to economic growth in the long run. The results also support evidences of bidirectional causality between FDI and foreign aid in the short run and a unidirectional causal flow from foreign aid to FDI in the long run. However, the study found no causal relationship between FDI and economic growth, irrespective of whether the causality test is conducted in the short run or in the long run. These empirical findings are encouragement to policy makers in Kenya to carefully channel foreign aid in productive sectors to positively influence economic growth and foreign direct investment, as most relevant targets in achieving Vision 2030 and the Sustainable Development Goals (SDGs).
... For economic human resources in science and technology it is registered at an average of 45.20%, with standard deviation of 9.62%, the minimum value being 25% and the maximum value being 65%. The first step, before analysing co-integration and causality consists in checking the stationarity (Agrawal, 2015). For this we used Levin, ADF and PP panel unit root tests for the full sample, the results being presented in Table 2.3. ...
This chapter is devoted to sustainable human resource management that leads to sustainable competitiveness. It features the ways human resources can be managed to carry out sustainable goals and the impact of sustainability on employees' attitudes and behaviours. The aim of this study is to explore the complex objectives of sustainability and human resource management and empirically investigate the dynamic relationship between human resources in science and technology and sustainable competitiveness in the case of 35 European countries. Our contribution emphasizes this interrelationship and its causality. For this research, we applied a vector auto-regression (VAR) model, and the Granger causality method to examine the relationship between human resources in science and technology and sustainable competitiveness. A panel data included 314 observations between 2012 and 2021. The panel VAR for analysing the impulse response function was enriched with the 5% and 95%, using Monte Carlo simulations. The research results revealed bidirectional causality in the European countries between human resources in science and technology and sustainable competitiveness. Human resources in science and technology trigger sustainable competitiveness and vice versa. As an element of originality, our study demonstrates that human resources in science and technology contribute to sustainable performance, and, on the other hand, a more competitive and sustainable environment contributes to the development of human resources in science and technology. Thus, the chapter outlines the role of human resources in science and technology with regard to sustainable human resource management (HRM), and how to navigate these objectives so that they can positively influence sustainable competitiveness.
... Another study (Koroci, 2018) that focused on Albania found a significant positive correlation between FDI inflows and GDP from 1995 to 2012. FDI and economic growth were found to be cointegrated at the panel level in a study by Agrawal (2015), who examined the relationship between them over the 1989-2012 time period in five BRICS economies. This finding suggests a longterm equilibrium relationship between them. ...
Purpose: This study examines the impact of foreign direct investment (FDI) on the gross domestic product (GDP) growth rate in Nigeria from 1990 to 2021. Research methodology: This study employed time-series data from the World Bank's World Development Indicator Database to ensure data homogeneity. The data were assessed for stationarity using the ADF unit root test. All the data were stationary after the first difference. The hypothesis was tested using ordinary least squares (OLS) with BLUE properties. Results: The study finds a significant positive effect of foreign direct investment net inflow on GDPGR (p<.05). The control variables DEGO (p=0.3299) and INFL (p=0.3321) showed positive coefficients but were non-significant. Limitations: The study used only data from the Nigerian context, from 1990 to 2021, which affects the generalizability of the study findings to other countries in SSA, and a limited number of control variables, such as DEGO and INFL. Contribution: This study contributes to the literature on FDI's impact of FDI on the economic growth of African nations. The research findings have critical policy implications for governments aiming to achieve sustainable economic growth. Practical Implications: This study has policy implications for developmental governance in Nigeria and SSA countries. Novelty: This study deviates from prior studies that agree that illicit financial flows in the form of FDI outflows negatively affect growth and focus on FDI net inflows' beneficial impacts on the Nigerian economy.
... This research has adopted the longitudinal method or panel data analysis technique to test the significance of the linkages between predictor variables (independent variables) and dependent variable. This regression technique has been applied in this section by keeping in view the fact that this is a wellaccepted method and has commonly been used in certain pertinent studies (see Shah & Khan, 2007;Van der Wijst & Thurik, 1993;Agrawal, 2015;Zeitun, 2012;Daniele & Marani, 2011;Akinlo & Apanisile, 2014 Thus, the first model becomes: ...
The study explores estimating the disparate quantitative cumulative impact of ASUU-strike on the economic growth: Evidence from North-East Nigeria. First, we study strike actions by the Academic Staff Union of Universities (ASUU) in Nigeria and recent changes in the actions of the employer (Federal-Government-of-Nigeria), using primary data collection from each of the Federal and State own Universities of the six states of the North-Eastern Nigeria demographics over the period 2022-2023. We employed structured questionnaires and random sampling distribution to gather data for analysis. Next, we used panel data analysis to estimate data collected with particular emphasis on random effect. We find that the average effect of food-vendors, taxi-drivers & Okada-riders, landlord, banks domiciled on campuses and stationary sellers over ASUU-Strikes when all these independent variables changes across time and between universities increases by 1%, ASUU-Strikes decreases the incomes of food-vendors, taxi-drivers & Okada-riders, landlord, banks domiciled on campuses and stationary-sellers by about 2%, 3,9%, 9.3%, 14.7% and 9% respectively, holding all other predictors constant. We discuss implications for policy, indicating that ASUU-strike affects the level of economic activities of businesses domiciled in the university system and neighborhood-shops around the university campuses thereby further depresses nation’s economy. Finally, we make recommendations.
... In the first decade of the 21st century, the average GDP growth rate of the BRICS countries exceeded 8%, which was significantly higher than the average growth rate of developed countries, which was 2.6%, and the average growth rate of the global economy, which was approximately 4.1%. However, the BRICS growth model relies heavily on the comparative advantage of traditional resource endowments rather than technological innovation and resource allocation efficiency [1]. Globally, the BRICS nations remain at the bottom of the value chain. ...
As the world economy has become more interconnected, technology's role as a driver of growth and a source of competitive advantage for businesses has grown in importance. The BRICS countries have been the engine of global economic growth for over a decade, but they now encounter varying degrees of opposition to their economic development. The developed world has implemented several strategies to preserve its position as the world's undisputed technological leader to maximize its profits and increase its market share. In order to accelerate economic growth, BRICS nations must work together to acquire cutting-edge technology that has been restricted from being exported to developing nations by developed nations. After providing a brief background on the technological monopolies of developed countries, this article analyzes the current state of technological development in the BRICS nations. Then it discusses the impact these monopolies have on technological progress before proposing countermeasures for foreign economic cooperation among the BRICS nations in light of these monopolies.
... The focus of the existing studies has been on the direct causality between FDI and economic growth (Aderemi et al., 2019;Agrawal, 2015;Jadhav, 2012). Economic freedom may act as a conduit in the FDI-growth nexus through which larger benefits of FDI can be achieved. ...
... Out of the BRICS nations, Russian CPI data is intentionally not considered for our study due to the ongoing war with Ukraine, as the overall results/output of our research can be spurious and will be void for arriving at any conclusions. Thus, BICS nations are considered for our research as past researchers have also discussed about the strong growth story of these countries (Agrawal, 2015;Guru and Yadav, 2019). The closing prices of Bitcoin and Ethereum were retrieved from coinmartketcap.com. ...
Academic research on cryptos has exploded over the past decade; however, the impact of cryptocurrency on inflation in emerging markets is an underexplored research area. This study addresses this by investigating the impact of two major cryptocurrencies – Bitcoin and Ethereum, on inflation in four major emerging countries – Brazil, India, China, and South Africa (BICS). Monthly data on cryptocurrencies and inflation (WPI and CPI) is taken from Oct 2017 to Nov 2022. The Vector Autoregression (VAR) findings indicate that in BICS countries, there is no significant impact of cryptocurrencies- Bitcoin and Ethereum on the inflation of BICS. The results of this study can be useful for policymakers regarding inflation management and the risks and challenges associated with cryptocurrency adoption.
... The signs of the parameters were estimated as positive, positive, and negative, respectively. Then, Agrawal (2015) tested the causal relationship between FDI inflows and economic growth for the BRICS countries during 1989-2012. He employed panel cointegration and causality tests to find the causal link between the variables mentioned above. ...
... These countries offer huge benefits like low-cost labour, resources and huge market size to attract foreign investors. A few studies have assessed the growth impact of FDI in BRICS countries, finding a positive nexus between the two (Agrawal, 2015;Hayrdaroglu, 2016). However, the question of whether FDI impacts the growth of BRICS countries is not yet addressed in depth and therefore calls for greater attention from researchers. ...
Foreign direct investment (FDI) has gained prominence in international economics over the past three decades. Primarily, the belief that FDI influences economic growth of the host country, set the stage for the empirical research focused on the FDI–growth nexus. The growth literature, however, reveals mixed evidence regarding the role of FDI in promoting growth. Despite the conflicting evidence, developed and developing economies have attached immense economic and political importance to FDI. It is noteworthy that BRICS (Brazil, Russia, India, China and South Africa) economies are representative developing economies and have emerged as significant FDI destinations, having witnessed an immense surge in inward FDI over the past few decades. It is against this backdrop that the present study attempts to assess the impact of FDI inflows and select macroeconomic variables, namely macroeconomic stability, human capital, financial development and trade openness (TO), on the economic growth of developing BRICS economies. The study examines both short-run and long-run relationships between FDI inflows, select macroeconomic variables and economic growth by employing the dynamic panel autoregressive distributed lag (ARDL) model, unlike most of the previous studies.
For this study, secondary data covering a reference period of 32 years (1987–2018) were used. The data on GDP growth (GDPG), FDI inflows, inflation (INF), human capital, private sector bank credit (proxy for financial development) and TO have been collected from the World Investment Reports published annually by United Nations Conference on Trade and Development (UNCTAD) and World Bank (World Development Indicators). The findings revealed a long-run cointegration among FDI, host country characteristics (TO, human capital, financial development and macroeconomic stability) and economic growth in BRICS.
... The relationship between FDI and economic growth in India, specifically in the agricultural, manufacturing, and service sectors. [1] The study found that FDI does not contribute to agricultural output growth, but it attracts more FDI. The FDI inflow had a positive impact on the manufacturing sector output for a couple of years, and FDI has a bidirectional causality with service sector growth in both the short and long run. ...
The purpose of this article is to explore how foreign direct investment (FDI) is linked to economic growth in the BRICS nations. Various sources of data are gathered and analyzed to investigate the contribution of FDI to the development of these emerging economies, and to identify the factors that influence the inflow of FDI. The study examines the period from 2000 to 2020 and employs statistical methods to analyze the relationship between FDI and economic growth. The research findings are pertinent to policymakers, investors, and other interested parties who seek to foster economic growth in the BRICS countries. The study reveals that FDI has a substantial and beneficial impact on economic growth, particularly in India and China when compared to the other BRICS countries. As a result, the paper recommends that policymakers in these nations prioritize the attraction of FDI to stimulate economic growth.
... The result of this study is supported by the study of Danson-Musyoki (2012), Musyoki, Pokhariyal and Pundo (2012), Brown (2012), Mewadi (2013), Akpan and Atan (2012) and Amassoma and Odeniyi (2016) in Nigeria, while the results in Akpan (2009) The result of the granger causality study also showed that external sector components were grossly unable to address the effective improvement of the economic growth of both countries in Nigeria and South Africa. The result of this study on Nigeria is consistent with the findings of Adjaye (2009), Oyatoye, Arogundade, Adebisi and Oluwakayode (2011), Umoh, Jacob, and Chuku (2012), Khathlan (2012), Ikechi and Anayochukwu (2013), Ekwe and Inyiama (2014), Agrawal (2015) and Malikane and Chitambara (2017)who also found a statistically significant effect of FDI on economic growth, however grossly insignificant which was same position with the South Africa. ...
This study is a comparative evaluation of external sector and economic growth of contemporary Sub-Saharan African economies. The study used secondary data obtained from World Bank Data base and subjected them to ADF stationarity test, co-integration test, Multiple regression analysis and Granger Causality technique to analyse the study over the period between 1986 to 2018. The findings from the study show what all the external sector variables except exchange rate, external debt and trade integration had insignificant relationship with the economic growth of South Africa; however, both exchange rate and external reserves contributed significantly on economic growth of Nigeria, while external debt, FDI and trade integration have insignificant implication on Nigerian economic growth but had significant implication and relationship with South African economic growth. The granger result prove that external sector does not affect the position of economic growth across Nigeria and South Africa. The study therefore concludes that external sector variables improve the economic growth of South Africa significantly and have no significant implication on Nigerian economic growth. Therefore, the study recommends among others, the building up of external reserves and reduction of external debt so as to manage exchange rate instabilities while improving FDI to facilitate economic growth of Nigeria and South Africa economies.
... This indicates that China has made better use of and directed the inflows of FDI. Agrawal (2015) studied the relationship between FDI and economic growth on a sample of the BRICS group of countries in the period from 1989 to 2012 and came to the conclusion that FDI and economic growth are cointegrated at the panel level, indicating a long-term balance between the observed two variables. Franc (2017) examined the statistical relationship among exports, foreign direct investment inflow and economic growth on the example of the Republic of Croatia for the period 2000-2016. ...
Health behavior appears to be one of the key factors in prevention, which also affects the health economy. Maintaining health care puts increasing pressure on Hungarian society due to the growing aging. Healthy lifestyle and health consciousness provide effective help in maintaining a good level and longtime of quality of life. The impact of health behaviors in the health economy on financing means an increasingly important social problem. In Hungary, health behavior is low compared to European nations. The reduction of economic factors can be achieved by prevention, health improvement and years of health. The professional basis of this research are given by the individual image of health and the individual and social health behavior which are supported by the healthcare/health economy. Our research examines local health behavior and satisfaction with health care, in which we analyze the results in comparison with regional environmental conditions compare with the European health behavior research. The correlation between health economic factors and health behavior was revealed by secondary research, while the method of our empirical study is a questionnaire survey that presents health image, local health opportunities and relationships in several age groups. Based on the results of our survey, it became evident that the results of the Hungarian health behavior were the same in the central settlement of the western region of the country, where the economic indicators show a higher proportion than the national average. The low level of health consciousness and the low level of health behavior did not show significance, as is the case in European countries, in terms of higher health image and higher economic factors. On the other hand, in terms of educational attainment, there was a higher level of health awareness. Health as an economic factor plays a key role in employment, as healthy employees participate in the maintenance of the nation as an economic factor.
Keywords: health image, health behavior, health economy, prevention, life living standard
... In time series data, before beginning the analysis of cointegration and causality, the most important requirement is to check the stationarity [109]. In order to test the stationarity, we used Levin, ADT, and PP panel unit root tests for the full sample, the results being presented in Table 3. ...
The countries of Central and Eastern Europe, from the non-euro area, have completed the process of economic transition before joining the European Union. Achieving a certain level of economic development and membership in the European Union have generated their involvement in a new transition process, namely the energy transition. Concerns about promoting the low carbon economy have become increasingly complex for those countries that are interested in the environmental impact of economic activity. This study aims to analyze the process of energy transition in the countries of Central and Eastern Europe on the basis of the causality relationship among specific variables for the period 1990–2018. The study is based on cross-sectional panel data and the panel vector error correction model (PVECM). The efforts made by these countries by joining the European Union have generated economic development, with positive effects being recorded on the protection of the environment, a fact due to the strict regulations adopted and rigorous implementation at the national level. Foreign capital had a positive impact on the transition to a low carbon economy because most of the FDI flows attracted by the non-euro countries in the CEE come from Western Europe, i.e., from EU member countries, located either among the founders or among the countries that joined during the first waves of union expansion. Membership in the European Union facilitates the energy transition process for the non-euro countries of Central and Eastern Europe, but the new geopolitical events generate the reconfiguration of the European strategy of considering the need to ensure energy security.
... Penelitian dari Anderson (1990) juga menyatakan bahwa pertumbuhan ekonomi dipengaruhi oleh tingkat investasi serta tingkat pengembalian investasi. Kemudian, penelitian di lima negara (Brazil, Rusia, India, China dan Afrika Selatan) menunjukkan bahwa terdapat hubungan kausalitas jangka panjang antara investasi asing dan pertumbuhan ekonomi (Agrawal, 2015). Penelitian di Yordania juga menyebutkan bahwa terdapat dampak positif dari investasi terhadap pertumbuhan ekonomi (Al-Mihyawi, 2019). ...
Pandemi Covid-19 telah berpengaruh besar terhadap kondisi perekonomian dunia, termasuk Indonesia. Berdasarkan data BPS, perekonomian Indonesia didominasi oleh perekonomian Pulau Jawa, yaitu mencapai 58,75% pada tahun 2020. Sehingga, penelitian ini bertujuan untuk mengetahui determinan pertumbuhan ekonomi di Pulau Jawa pada masa pandemic Covid-19. Metode yang digunakan pada penelitian ini adalah metode statistik deskriptif, berupa tampilan grafik serta metode statistik inferensia dengan menggunakan pemodelan regresi data panel. Temuan dari penelitian ini adalah dari tiga variabel bebas yang digunakan, hanya satu variabel bebas yang memengaruhi pertumbuhan ekonomi Pulau Jawa pada masa pandemi Covid-19, yaitu tingkat penghunian kamar hotel berbintang. Setiap terjadi kenaikan tingkat penghunian kamar pada hotel berbintang sebesar 1%, maka akan meningkatkan pertumbuhan ekonomi Pulau Jawa sebesar 0,2359%. Sehingga, didapatkan kesimpulan bahwa sektor pariwisata berkontribusi positif terhadap pertumbuhan ekonomi Pulau Jawa pada masa pandemi Covid-19. Namun, meskipun kedua variabel bebas lainnya tidak signifikan, pemerintah tetap harus mengoptimalkan kedua variabel tersebut.
... In his study, Gui-Diby also found that FDI inflow had a significant positive impact on economic growth in Africa during the period of interest. A study done byAgrawal (2015) entitled "Foreign Direct Investment and Economic Growth in BRICS Economies" confirmed that foreign direct investment and economic growth are co-integrated at a panel level, implying a presence of a long-run equilibrium relationship between FDI and economic growth. The author also indicated that there was a long-run causality running from FDI to economic growth.Zekarias (2016) examined the impact of FDI on economic growth in Eastern Africa. ...
One of the most important capital flows, foreign direct investment (FDI) has historically served as a source of funding for developing economies. Many academics and policymakers now view FDI as a key growth driver because of the positive spillover effects it has on other economies, including increased capital formation, the transfer of cutting-edge knowledge, and new ways of doing things. Therefore, the main goal of this study was to investigate the relationship between foreign direct investment (FDI) and economic growth in Sub-Saharan African countries (SSA). To do this, a purposive sample of the 15 most developed SSA economies was selected, and the study was conducted over a 20-year period (2000–2019). Foreign direct investment (FDI) is the primary variable of interest for the relationship between FDI and economic growth, with political stability and institutional quality as its primary factors. The researcher used panel data analysis, running Stata 14 as the instrument of estimation, and using static models like pooled ordinary least squares (POLS), fixed effect (FE), and random effect estimators, as well as the system generalised method of moments of the dynamic models, to achieve the study's goals The study was designed with a descriptive design and a solely quantitative approach. It made use of panel secondary data that was taken from the World Bank's World Development Indicators (WDI) and World Governance Indicators (WGI) in its most recent version, which was released in 2021. Foreign direct investment had a negative and insignificant effect on the economic growth of SSA, according to the results of the static models (POLS, FE, and RE) and dynamic models (SYS GMM). Gross capital formation and human capital, on the other hand, had a favourable and statistically significant impact on economic growth, but government expenditure had a negative and statistically significant impact on the economies of the countries under study. Additionally, the results demonstrated that institutional quality had a positive and statistically significant impact on FDI influx into SSA at a 10% significance level, whereas political instability had a negative and statistically insignificant impact. Furthermore, it was proven that trade openness and macroeconomic stability have a favourable and statistically significant influence on how attractive SSA is to FDI. SSA nations should stimulate domestic investment and increase their expenditures on human capital in order to foster economic growth. Similar to this, SSA nations should increase their macroeconomic stability and trade openness if they want to draw in more foreign direct investment.
Key words: FDI, GDP, economic growth, SSA, political stability, institutional quality, POLS, FE, RE and SYS GMM.
... Theoretical and empirical studies have previously explored the unidirectional relationship between economic growth and variables such as international trade and trade openness (Omri et al., 2015, Rahman and Mamun, 2016, Keho, 2017, Were, 2015, Hye and Lau, 2015, export (Dutt et al., 2015, Gokmenoglu et al., 2015, Kalaitzi and Chamberlain, 2019, Goh et al., 2017, export diversification (Hesse, 2009, Al-Marhubi, 2000, Dessus and Suwa-Eisenmann, 1998, Ferreira and Harrison, 2012, Herzer and Nowak-Lehnmann D, 2006, Aditya and Acharyya, 2013, Agosin, 2007, Sannassee et al., 2014, Olaleye et al., 2013, revealed comparative advantage (RCA) (Chingarande et al., 2013, Sanidas, 2007, Intra-industry Trade (Tong-sheng, 2006, Leitao, 2012, foreign direct investment (Agrawal, 2015, Iamsiraroj, 2016, Zekarias, 2016, Dike, 2018, tourism , Nunkoo et al., 2019, Antonakakis et al., 2019, Wu and Wu, 2019, Roudi et al., 2019, entrepreneurial activity , Minniti, 1999, Acs and Armington, 2002, etc. This study has taken regional export growth, regional revealed comparative advantage, regional intra industry trade, and regional export diversification as variables to examine the short-term and long-term relationship with economic growth. ...
The primary goal of this research is to determine the short-term and long-term consequences of regional export growth, regional export diversification, regional intra-industry trade, and regional revealed comparative advantage on Bangladesh's GDP growth from 1990 to 2017. In the first phase, trade indices like regional export growth (EXG), regional export diversification (RED), regional intra-industry trade (RIIT), and regional revealed comparative advantage (RRCA) for Bangladesh's textile and clothing industry in the North American market were calculated based on data from the World Integrated Trade Solution (WITS) and World Trade Organization (WTO). GDP growth is used as a proxy measure for Bangladesh's overall economic development. To check the data series' stationarity, we used several unit roots tests (e.g., ADF and PP). To ensure robustness, the Johansen cointegration test, Engle-Granger Causality test, and ARDL bound test approach were used. The results revealed that the variables have substantial long-run cointegration. In addition, the findings revealed that an improvement in regional export diversification, regional intra-industry trade, and regional revealed comparative advantage increase Bangladesh's GDP growth. In contrast, the increase in regional export growth hinders the GDP growth of Bangladesh in the long-run. According to the facts, Bangladesh's government and policymakers should be concerned about diversification among established product categories and the exploration of new regional markets for the country's long-term economic growth.
This study examined the empirical exercise of the impact of foreign direct investment on economic growth in Pakistan. This research covered the period of 1990-2024. Gross domestic product per capita (economic growth) is taken as the dependent variable, while foreign direct investment, gross fixed capital formation (domestic investment), inflation, and trade openness are taken as independent variables. This study contains secondary data that is taken from the World Bank Database (WDI). For empirical estimations ADF test is used to check the stationarity of the data. The F-Bound test approach and the ARDL model are used to find the short-run and long-run relationship among the variables. The findings of the study depict that foreign direct investment and domestic investment positive relationship with economic growth. In this study, trade openness shows an insignificant effect until the imports remain positive. For policy implications, it is recommended that foreign direct investment be attracted to Pakistan for the country's sustainable development. The State Bank should focus on monetary policy to enhance the development of the country.
This study examines the factors influencing economic growth within the member states of the East African Community (EAC), including Uganda, Tanzania, Rwanda, Kenya, and Burundi, for the period from 1990 to 2020. Utilizing panel time series data, the analysis commences with descriptive statistics to investigate the trends of essential variables. The stationarity of the data is evaluated using the Pesaran-Shin unit root test, followed by the application of both Fixed Effects and Random Effects Generalized Least Squares (GLS) regression models. The Breusch-Pagan Lagrangian multiplier test is conducted to ascertain the appropriate model specification. The empirical findings identify four critical determinants of economic growth: inflation, defense expenditure, population growth, and imports. Specifically, inflation and population growth are shown to have a positive impact on economic growth, whereas defense expenditure and imports are negatively correlated with growth. Policy recommendations for EAC governments include the enhancement of foreign direct investment (FDI) policies, the maintenance of moderate inflation levels, an increase in government consumption expenditure, the promotion of sustainable population growth, and the regulation of defense spending, internet usage, mobile phone subscriptions, and imports to improve economic performance.
Foreign direct investment (FDI) is of vital importance for such developing countries as Myanmar. It brings such main important instruments as capital (foreign capital inflows), exports and trade, and new technology to the host countries. Thus, Myanmar is committed to encouraging FDI to strengthen its economy. This study’s goal is to determine the sectoral FDI that has an influence on Myanmar’s economy. The time frame for the study is from 1990 to 2020. The random effect model was employed to discover which and how FDI sectors influence on the economic growth in this study. Two-stage least squares estimator was employed to solve the endogeneity problem. There is no endogeneity problem in this study. According to the results, the explanatory variables statistically significantly and positively influence on the growth. Thus, all FDI sectors have the positive impacts on the economy. Among them, the coefficient value of the FDI secondary sector is the highest. Hence, manufacturing sector, power sector, and construction sector support economic development of Myanmar. Therefore, the government should attract more FDI into the manufacturing sector, as this can lead to the higher productivity and then to more exports, which can earn much more foreign currencies and strengthen the economy in Myanmar.
With the COVID-19 pandemic, using the Internet has become a must for businesses to communicate information to users. One of the main aims of online reporting is to serve users outside the geographic area. The purpose of this study is to empirically examine the association between foreign ownership and the extent of online financial reporting in two developing countries, i.e., Malaysia and China. Foreign ownership is the independent variable and the extent of online financial reporting is the dependent variable, with two control variables, i.e., web presentation and type of industry, which includes six industries, namely industrial products, plantation, property & construction, technology, trading & services, and consumer products. This study uses the agency theory and signaling theory to support hypotheses arguments and results. The sample size of this study consists of 300 companies (150 companies from each country) and the data is collected from the websites of the selected companies. OLS regression in STATA software is used to analyze the data. The findings show that companies in Malaysia do not connect their online financial reporting to foreign shareholders as much as companies in China. Interestingly, the results show that web presentation is significantly associated with the extent of online reporting in Malaysia and China. Industrial products, trading & services, and consumer product companies are positively associated with the extent of online reporting in China, but not strongly significant in Malaysia. The results help regulators and other related parties to enhance the level of transparency amongst listed companies in both countries.
This paper sought to examine the causality nexus of Foreign Direct Investment (FDI) and Economics Growth in Tanzania. Specifically, the research aim to assess the impact of FDI to manufacturing, agricultural and service sectors. Moreover, the study employed time series data from 1993 to 2023. FDI inflow is always considered an important economic growth catalyst in developing economies. Neoclassical growth theories proposed that FDI enhances economic growth by augmenting capital stock and technology. According to the neoclassical models, FDI does not enhance the long-run growth rate but instead is related to the output level. Autoregressive Distributed Lags (ARDL) models was employed to determine the long-run and causal relationship between variables of interest in all three models of the study. The findings of the manufacturing output model suggest that FDI has positive and statistically significance effect to manufacturing sector in both short run and long run. In agriculture and service sector models only short run estimation was captured due to lack of co-integration pattern among variables. The findings indicated a positive and statistical significant unidirectional causality running from FDI to both agricultural and service sectors output. Based on the findings of the study the policy implication is that Tanzania should emphasize FDI-led growth policies to enhance sustainable economic growth to realize the desired economic objectives at the macro level.
This study compares the relationships between important macroeconomic variables and outward foreign direct investment (OFDI) in the economies of the BRICS and N-11 countries between 1990 and 2019. The analysis employs a comprehensive econometric framework, with ordinary least squares (OLS) serving as the baseline model, followed by three-stage least squares (3SLS) to account for simultaneous relationships, and the generalized method of moments (GMM) for the robustness check to handle any endogeneity. The primary macroeconomic factors that are examined are GDP, financial development, trade openness, technological advancement, human capital, and inward foreign direct investment. The empirical results verify that, in both groups of economies, OFDI has a long-term positive and significant correlation with GDP, financial development, and trade openness. GDP is also identified as a critical outcome variable in the 3SLS model, which shows that higher GDP levels are associated with increased trade openness, financial development, and OFDI. There is conflicting evidence regarding the magnitude and statistical significance of these associations, and their direction and strength differ among models and country groups. These results demonstrate the intricate relationship between OFDI and macroeconomic factors, emphasizing the necessity of distinct policy strategies adapted to the institutional and structural realities of the N-11 and BRICS economies.
This quantitative study investigated the effect of Foreign Direct Investment (FDI) on Economic Growth in Nigeria and Ghana using data spanning from 1981 to 2022 sourced from reputable institutions, including the Central Bank of Nigeria, Bank of Ghana, World Bank, International Monetary Fund (IMF), and United Nations Conference on Trade and Development (UNCTAD). Gross Domestic Product (GDP) per capita served as the key indicator of economic growth, calculated by dividing total GDP by population size. FDI, Inflation Rates, and Exchange Rates were examined as independent variables. Ordinary Least Square (OLS) regression analysis was employed, and the model was adapted from previous studies. Descriptive statistics highlighted substantial FDI inflows in both countries, with Nigeria exhibiting a mean FDI of USD 2.47 billion and Ghana's USD 1.13 billion. Analysis revealed the significance of FDI in driving economic growth in both nations, with coefficients of 9.10E-08 for Nigeria and 2.85E-07 for Ghana. Additionally, Exchange Rates demonstrated a positive effect on GDP per capita in both countries, emphasizing the importance of currency stability. Cointegration tests suggested stable long-term relationships between FDI and Economic Growth. The study suggests that both countries should continue implementing policies that attract and retain FDI as clear and stable regulations and incentives for foreign investors can contribute to sustained economic growth.
Gross Domestic Product (GDP) is one of the macroeconomic indicators that reflects the level of welfare of a country's population. The APEC (Asia-Pacific Economic Cooperation) forum has the main goal of promoting economic growth and enhancing prosperity in the Asia-Pacific region. This is done by encouraging and facilitating more open trade and investment in the region. APEC member countries have different export characteristics, namely agricultural exports and high-technology exports. This study analyzes the influence of agricultural exports, high-technology exports, Foreign Direct Investment, and regulatory quality on the Gross Domestic Product of APEC member countries. The research data used are secondary data from the World Bank from 2011 to 2020, analyzed using the Fixed Effect Model approach of panel data regression method using E-Views 12. The results show that simultaneously, agricultural exports, high-technology exports, Foreign Direct Investment, and regulatory quality have a significant influence on the economies of APEC member countries. Partially, high-technology exports and regulatory quality have a positive and significant impact, while agricultural exports and Foreign Direct Investment have a positive but not significant impact on GDP. APEC countries should focus on productivity by harnessing technology and achieving inclusive economies for societal welfare.
China achieved rapid economic development as a result of the reforms implemented in 1978. It is widely believed that foreign direct investments and foreign trade, which increased alongside these reforms, had a significant impact on this rapid economic progress. Consequently, this study sought to examine the effectiveness of foreign direct investments and foreign trade in facilitating China's rapid economic growth between 1978 and 2016, utilizing the SVAR method. Within the scope of the study, three variables were utilized: the growth rate, the ratio of foreign direct investments in GDP, and the ratio of foreign trade volume in GDP. In the initial part of the study, the growth process, foreign direct investments, and foreign trade of China were evaluated using graphical representations. In the following section, in the empirical part, initially crisis periods were incorporated into the model as a dummy variable in order to prevent crisis periods to affecting the results. Following this, unit root tests were conducted, and it was concluded that the series were non-stationary at the level but became stationary after taking their first differences. Therefore, in this study, the first differences of the series were utilized for analysis. In the subsequent part, autocorrelation and heteroskedasticity tests were applied to the model. The results of these tests indicated that the model is suitable for evaluation. Consequently, in the next part, the study proceeded to evaluate the impulse-response functions and variance decomposition results of the model. As a result of these analyses, it was concluded that both foreign direct investments and foreign trade, but especially foreign direct investments, have a significant impact on China's economic growth.
This study examined the impact of financial expansion, natural resources, gross domestic savings, and foreign direct investment on economic development in Pakistan, using annual data spanning from 1970 to 2020. We utilized the three regression techniques including Generalized Method of Moments (GMM), Cointegrating Regression analysis (FMOLS, DOLS, and CCR), and dynamic Autoregressive Distributed Lag (ARDL) to uncover the determinants influence on economic progress. The GMM technique findings reveal that natural resources and foreign direct investment have positively influenced the economic progress. Financial expansion and gross domestic savings both have a detrimental effect on Pakistan’s economic growth. Moving on to the effects of FMOLS, DOLS, and CCR, the natural resources and foreign direct investment favourably affected the Pakistan’s economic growth, whereas financial expansion and gross domestic savings adversely influenced the economic growth. Furthermore, the outcomes of dynamic symmetric (ARDL) approach in the short-run and long-run show that FDI and financial expansion have a negative impact on economic development, whereas natural resources and gross domestic savings have a favourable impact. In order to attain long-lasting and sustainable economic growth, it is crucial for the government to implement inventive policies and regulations that promote financial supply-side reform and enable various financial development initiatives.
The study explores the influence of environmental risk (macroeconomic uncertainty and environmental sustainability risk) on the inflow of foreign direct investment (FDI), utilizing data from 37 economies in sub-Saharan Africa (SSA) from 1996 to 2019. The empirical analyses were carried out using Panel Corrected Standard Error (PCSE) estimation technique. The outcomes show that higher level of uncertainty in GDP growth, inflation uncertainty and financial development volatility induce more FDI inflows whilst uncertainty in exchange rate adversely impacts FDI inflows in SSA. The paper highlights how effectiveness of governance, stable political atmosphere and quality of regulatory structures moderate the relationship between environmental risk and FDI with striking varying outcomes. Consistent with the pollution haven hypothesis, the interactions between governance effectiveness, political stability, regulatory structures and environmental risk suggest that the sub-region is attracted to risk loving speculative investors who prefer poorly regulated and weak governance environment. From policy implication, the findings imply that FDI composition in the sub-region may have moved more towards the speculative type, which may not necessarily be classified as pro-growth in nature.
The study was undertaken to investigate the impact of foreign direct investment (FDI) and trade openness on the economic growth of Nigeria from 1980 to 2017 using the VECM and Granger causality tests. Data was collected from the World Development Indicators published by the World Bank and regressed using the unit root test of Augmented Dickey Fuller to determine the stationarity of the individual variables. Johansen cointegration technique was used to examine the cointegration relationship between the variables. The results show that there exists a positive long-run relationship between FDI and gross domestic product (GDP) and a negative long-run relationship between trade openness and GDP. Thus, to capture the short-run effects, the vector error correction model was estimated. Finally, Granger causality test was employed to investigate the causality between them. There was a unidirectional relationship between the variables. From the findings, to revamp the Nigerian economy, the government should implement quality conflict management institutions, ensure export oriented trade policies, and invest more in infrastructural developments.
ZET Bu çalışmada; Türkiye'nin 1993-2021 yılları arasındaki dış borç stoku, toplam rezervler ve doğrudan yabancı yatırımlar değişkenleri kullanılarak bunların dışa açıklık üzerindeki etkileri analiz edilmiştir. Serilerin durağanlığı ADF (1979) ve PP Birim Kök Testi (1988) ile seriler arasındaki eşbütünleşme ilişkisi ise Johansen Eşbütünleşme Testi (1990) vasıtasıyla araştırılmıştır. Araştırmanın temel amacı; Türkiye'nin finansal dışa bağımlılığı ile de bilgiler veren bu değişkenlerin dışa açıklık üzerine etkisinin ne yönde olduğunun tespit edilmesidir. Uzun dönemden elde edilen sonuçlara göre; Model I'de toplam dış borç stokundaki %1'lik artış; dışa açıklığı %176.18 oranında azaltırken, toplam rezervlerdeki ve doğrudan yabancı yatırımlardaki %1'lik artış ise dışa açıklığı sırasıyla %45.46 ve %10.17 oranında arttırmaktadır. Model II'de ise dışa açıklıktaki 1 birimlik artış; toplam dış borç stokunu %1.41 oranında azaltırken, toplam rezervlerdeki ve doğrudan yabancı yatırımlardaki %1'lik artış ise, toplam dış borç stokunu sırasıyla %0.258 ve %0.058 oranında arttırmaktadır. Kısa dönemden elde edilen sonuçlara göre, tüm modellerin hata düzeltme terimi katsayısı negatif ve istatistiki olarak anlamlıdır.
Tujuan dari penelitian ini adalah untuk menganalisis pengaruh perubahan kebijakan, perubahan estimasi dan keahlian keuangan secara simultan terhadap terjadinya restatement pada perusahaan yang go public. Penelitian ini menggunakan metode penelitian deskriptif kuantitatif. Sumber data sekunder yang digunakan dalam penelitian ini diperoleh dari laporan keuangan perusahaan sektor manufaktur tahun 2019 sampai dengan tahun 2021 yang telah dipublikasikan secara lengkap di BEI. Sampel dalam penelitian ini adalah 22 laporan keuangan perusahaan manufaktur tahun 2019-2021. Hasil penelitian menunjukkan bahwa perubahan kebijakan akuntansi secara parsial tidak berpengaruh signifikan terhadap penyajian kembali, sedangkan perubahan estimasi dan keahlian keuangan secara parsial berpengaruh signifikan terhadap penyajian kembali. Perubahan kebijakan, perubahan estimasi dan keahlian keuangan secara bersamaan berpengaruh signifikan terhadap penyajian kembali.
Trade and Foreign Direct Investment has been treated as crucial factors underlying the relative growth rates experienced by the Albanian Economy, especially during the late years, thus, boosting economic growth in the country and improving the degree of integration of the Albanian economy into the World markets. The paper aims to provide an empirical assessment of the relationship between Trade, Foreign Direct Investment, and Economic Growth in Albania, by examining Trade and FDI nexus growth interactions using yearly time series data for a time span of 1993-2018. For this purpose, we employed cointegration analysis and Granger causality analysis. The co-integration tests, based on Vector Error Correction Mechanism (VECM), confirm the presence of a long-run relationship between the variables. VECM results support a negative relationship between trade and GDP in the long-run and a positive relationship between trade and FDI. Granger Causality tests support the causality evidence of one-directional reinforcement of GDP on trade in Albania and changes in GDP and trade are causing changes in FDI. The VAR analysis confirms that changes in GDP and FDI are encouraging changes in trade. The paper outlines policy implications with respect to promoting relevant institutional policies for the enhancement of trade and FDI activities in the country, which potentially could enhance economic growth in the country.
Purposes: The last four decades, the value of foreign direct investment (FDI) inflow in Somalia has fluctuated between 43,390,000 in 1970. Thus, this research investigated the factors influencing foreign direct investment (FDI) inflows in Somalia. Over the period from 1980-2017 and data are obtained from the World Bank. Design/ Methodology/ approach: this study used The Vector Auto regression (VAR) model. The econometric methodology to be utilized includes the unit root test for used Augmented Dickey-Fuller (ADF), co-integration test, Johansen integration test and diagnostic test includes serial correlation, normality, heteroskedasticity and AR root test. Furthermore, they are also utilized for VAR Granger causality tests. Findings: The findings of this paper indicated unit root test showed that all variables except external debt are not stationary at the level but become stationary after first differencing at the 10% level of significant. The co-integration test indicates the relationships between variables are integrated. The Granger-causality test shows only one-way Granger-causality relationships from FDI to GDP, import and export variables or so-called unidirectional Granger causality. Moreover, impulse response function indicates results all variables are positive related in the short run and long run except for imports which is negative related with FDI. Although, GDP, imports and inflation are significant to FDI, but export and external debt are insignificant to FDI. Therefore, this research concludes that FDI influences economic growth in Somalia. Research limitations/ implications: Although this research has expended and evolved prior studied various respects, a comprehensive and systematic time-series study on FDI and its determinants in Somalia would involve more capitals than had been made available for this study. There are still a number of specific constrains to be noted on the investigating FDI and its determinants in this paper, some factors such as political and macroeconomic instability, human capital, infrastructure and corruptions are not considered owing to data availability. Moreover, it’s recommended that future studies could improvement widely and update research in FDI.
The article considers analysing the effect of sector-specific foreign direct investment (FDI) (the primary, secondary, and tertiary sectors) on economic growth in 19 developing countries over the period 2005–2018. Variables such as human capital, domestic investment, financial development, openness of the economy, labour force, and arable land were included as control variables. A robust two-step system generalised method of moments (GMM) was utilised for the analysis of the data. The study found that FDI’s growth effect is indeed influenced by its sectoral composition in developing countries. The finding reveals that FDI in manufacturing has a positive and statistically significant influence on economic growth, whereas FDI in the tertiary sector has a statistically significant negative effect on economic growth, but FDI in the primary sector has a negative but negligible effect on economic growth. Lastly, it can be concluded from the above results that the more manufacturing FDI that countries attract, the greater their economic growth will be. In light of this, the countries should provide special incentives like tariff reductions, tax holidays, and cheap-rented land supplies in order to attract more manufacturing sector FDI.
This paper investigates the role of corporate governance in China’s outward foreign direct investment (ODI) using a sample of Chinese public firms over the period 2009-2015. Different from previous studies, which mainly use country-level aggregate data to examine China’s ODI behavior, this study utilizes firm-level data to explore the impact of corporate governance on firms’ ODI decision making. Building on the integration of agency theory and foreign direct investment theories, the study finds that ownership concentration, share ownership, and executive compensation significantly influence China’s ODI flows in both full-sample and sub-sample estimations. The corporate governance has an essential effect on firms’ ODI flows in that the firms with better corporate governance are more interested in undertaking ODI projects. The results are robust across different sample periods and in both state-owned and non-state-owned firm sub-groups. The government may design some policies such as friendly tax regulations to stimulate private firms to invest overseas.
Turizm, önemi giderek artan ve ülke ekonomisini canlandırma konusunda öncü sayılabilecek sektörlerden biri haline gelmiştir. Özellikle turizm sektörü ile bağlantılı olan doğrudan yabancı yatırımların (DYY) ülke ekonomisine katkısı önemlidir. Bu yatırımlarla birlikte, gelen turist sayısı ve bu turistlerin yaptıkları harcamalar da ekonomik büyümeyi etkilemektedir. Turizm sektöründen elde edilecek verimin istenilen düzeye çıkarılması için ülkelerin hedeflerini bu doğrultuda belirlemesi gerekmektedir. Belirlenen hedef ve ilkelere göre hareket edebilmek için ise uygun politikalar belirlenmelidir. Bu bağlamda çalışmada amaçlanan temel olgu, DYY ve ekonomik büyümenin etken olduğu uygun turizm politikalarının oluşturulabilmesinin sağlanmasıdır. Amaçlanan politikaların çıktısının yorumlanması için İktisadi İşbirliği ve Gelişme Teşkilatı (OECD) ülkeleri üzerine 2005-2020 yılı aralığı için Emirmahmutoğlu ve Köse (2011) tarafından geliştirilen panel nedensellik testi uygulanmıştır. Sonuç olarak, turizm politikası açısından, gelen turist sayısından daha önemli olan konu, sürdürülebilir ve katma değer yaratan turistin harcama yapmasının sağlanmasıdır. Bu bağlamda turizm politikalarının teknolojik ve çevreci bir altyapıya oturtulması önem arz etmektedir.
Let n observations Y 1, Y 2, ···, Y n be generated by the model Y t = pY t−1 + e t , where Y 0 is a fixed constant and {e t } t-1 n is a sequence of independent normal random variables with mean 0 and variance σ2. Properties of the regression estimator of p are obtained under the assumption that p = ±1. Representations for the limit distributions of the estimator of p and of the regression t test are derived. The estimator of p and the regression t test furnish methods of testing the hypothesis that p = 1.
Although it may seem natural to argue that foreign direct investment (FDI) can convey great advantages to host countries, this paper shows that the benefits of FDI vary greatly across sectors by examining the effect of foreign direct investment on growth in the primary, manufacturing, and services sectors. An empirical analysis using cross-country data for the period 1981-1999 suggests that total FDI exerts an ambiguous effect on growth. Foreign direct investments in the primary sector, however, tend to have a negative effect on growth, while investment in manufacturing a positive one. Evidence from the service sector is ambiguous.
Abstract: By bridging the gap between domestic savings and investment and bringing the latest technology and management know-how from developed countries, foreign direct investment (FDI) can play important role in achieving rapid economic growth in the developing countries. The fact is that FDI mostly flows towards the developed countries and only a small portion of FDI flows to a limited number of developing countries. Thus, most of the developing nations almost fail to attract a handsome amount of FDI. Using panel data from 60 low-income and lower-middle income countries, this paper firstly identifies the influential factors that determine FDI inflow in the developing countries and secondly empirically demonstrates the relationship between economic growth and FDI. It is found that countries with larger GDP and high GDP growth rate and maintain business friendly environment with abundant modern infrastructural facilities, such as internet can successfully attract FDI and FDI on the other hand, significantly affect economic growth of a country.
This article argues that the development of the financial system of the recipient country is an important precondition for FDI to have a positive impact on economic growth. A more developed financial system positively contributes to the process of technological diffusion associated with FDI. The article empirically investigates the role the development of the financial system plays in enhancing the positive relationship between FDI and economic growth. The empirical investigation presented in the article strongly suggests that this is the case. Of the 67 countries in data set, 37 have a sufficiently developed financial system in order to let FDI contribute positively to economic growth. Most of these countries are in Latin America and Asia.
Among developing countries, there was no gross relationship between real income per capita in 1960 and subsequent growth in per capita income. However, once other significant influences, such as education, changes in labor force participation rates, inflows of foreign investment, price structures, and fixed investment ratios are taken into account, the lower the 1960 income level, the faster the income growth. This "conditional" convergence was particularly strong among the poorest half of the developing countries, contradicting the idea of a "convergence club" confined to relatively well-off countries. Inflows of direct investment were an important influence on growth rates for higher income developing countries, but not for lower income ones. For the latter group, secondary education, changes in labor force participation rates, and initial distance behind the United States were all major factors.
We test the effect of foreign direct investment (FDI) on economic growth in a cross-country regression framework, utilizing data on FDI flows from industrial countries to 69 developing countries over the last two decades. Our results suggest that FDI is an important vehicle for the transfer of technology, contributing relatively more to growth than domestic investment. However, the higher productivity of FDI holds only when the host country has a minimum threshold stock of human capital. In addition, FDI has the effect of increasing total investment in the economy more than one for one, which suggests the predominance of complementarity effects with domestic firms.
Asymptotic distributions and critical values are computed for several residual-based tests of the null of no cointegration in panels for the case of multiple regressors, including regressions with individual-specific fixed effects and time trends. The associated cointegrating vectors and the dynamics of the underlying error processes are permitted considerable heterogeneity across individual members of the panel.
A nation that lacks physical objects like factories and roads suffers from an object gap. A nation that lacks the knowledge used to create value in a modern economy suffers from an idea gap. Object gaps are emphasized by mainstream economists who make use of formal models and statistical hypothesis tests. Idea gaps are emphasized by dissident economists who make use of a diverse body of evidence and avoid formal models. Economists need to use the formal models from the first approach and the diverse evidence from the second to fully appreciate the importance of idea gaps in economic development.
The evaluation of aggregate FDI spillovers to domestic firms has yielded mixed results. However, analysis has recently taken a step forward with the evaluation of the factors determining the existence, dimension, and sign of FDI spillovers. We survey the arguments that support these factors and the empirical evidence already produced. FDI spillovers depend on many factors, frequently with an undetermined effect. The absorptive capacities of domestic firms and regions are preconditions for incorporating the benefits of these FDI externalities. Regarding the remaining factors, the results show contrary effects or, in some cases, are still insufficient to draw reliable conclusions.
This study examines the effects of foreign direct investment (FDI) and equity foreign portfolio investment (EFPI) on economic growth using data on 80 countries from 1979 through 1998. The results largely suggest that lagged FDI and EFPI do not have direct, unmitigated positive effects on growth, but some data are consistent with the view that the effects of FDI and EFPI are contingent on the ‘absorptive capacity’ of host countries, with particular respect to financial or institutional development. Moreover, extreme bound analysis (EBA) of significant results indicates that the estimates are robust compared to other empirical studies on growth.
Empirical studies on foreign direct investment (FDI) and growth in developed countries have yielded conflicting results using cross-country regressions. We use sectoral data for a group of six country members of the OECD. Our paper is the first to identify the sector-specific impact of FDI on growth in the developed countries. Our results show that FDI has positive, or no statistically discernible, effect on economic growth directly and through its interaction with labor. Moreover, we find the effects seem to be very different across countries and economic sectors.
The instability of standard money demand functions has undermined the role of monetary aggregates for monetary policy analysis in the euro area. This paper uses country-specific monetary aggregates to shed more light on the economics behind the instability of euro area money demand. Our results obtained from panel estimation indicate that the observed instability of standard money demand functions could be explained by omitted variables like e.g. technological progress that are important for money demand but constant across member countries.
This paper proposes a simple residual based panel CUSUM test of the null hypothesis of cointegration. The test has a limiting normal distribution that is free of nuisance parameters, it is robust to heteroskedasticity and it allows for mixtures of cointegrated and spurious alternatives. Our Monte Carlo results suggest that the test has small size distortions and reasonable power. In our empirical application to international R&D spillovers, we present evidence suggesting that total factor productivity is heterogeneously cointegrated with foreign and domestic R&D capital stocks.
Asymptotic distributions and critical values are computed for several residual-based tests of the null of no cointegration in panels for the case of multiple regressors, including regressions with individual-specific fixed effects and time trends. The associated cointegrating vectors and the dynamics of the underlying error processes are permitted considerable heterogeneity across individual members of the panel. Copyright 1999 by Blackwell Publishing Ltd
This paper proposes unit root tests for dynamic heterogeneous panels based on the mean of individual unit root statistics. In particular it proposes a standardized t-bar test statistic based on the (augmented) Dickey–Fuller statistics averaged across the groups. Under a general setting this statistic is shown to converge in probability to a standard normal variate sequentially with T (the time series dimension) →∞, followed by N (the cross sectional dimension) →∞. A diagonal convergence result with T and N→∞ while N/T→k,k being a finite non-negative constant, is also conjectured. In the special case where errors in individual Dickey–Fuller (DF) regressions are serially uncorrelated a modified version of the standardized t-bar statistic is shown to be distributed as standard normal as N→∞ for a fixed T, so long as T>5 in the case of DF regressions with intercepts and T>6 in the case of DF regressions with intercepts and linear time trends. An exact fixed N and T test is also developed using the simple average of the DF statistics. Monte Carlo results show that if a large enough lag order is selected for the underlying ADF regressions, then the small sample performances of the t-bar test is reasonably satisfactory and generally better than the test proposed by Levin and Lin (Unpublished manuscript, University of California, San Diego, 1993).
This paper examines whether electoral motives and government ideology influence short-term economic performance. I employ data on annual GDP growth in 21 OECD countries over the 1951-2006 period and provide a battery of empirical tests. In countries with two-party systems GDP growth is boosted before elections and, under leftwing governments, in the first two years of a legislative period. These findings indicate that political cycles are more prevalent in two-party systems because voters can clearly punish or reward political parties for governmental performance. My findings imply that we need more elaborate theories of how government ideology and electoral motives influence short-term economic performance.
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