Questions related to Foreign Direct Investment
Would you please share your understanding, and academic and research experiences regarding the effects of Exchange Rate Volatility? What are the main effects that influencing entire balance of economy?
Effect of exchange rate volatility on:
1. Economic growth
2. Currency Demand
5. Energy Price
6. International Flow of funds (including FDI)
7. Foreign aid, debt interest repayments
8. Foreign Remittance
9. Money Exchange Business
10. Bank’s Financial Performance
11. Social Effects (tourist and medical tourist)
12. Social Effects (Education and Academic Tourist)
13. Lifestyle effects or domestic consumption (due to Inflation)
14. De-dollarization tendency
15. Firm-level effects (Garments sector)
My dependent variable is log(exports) and my independent variable is log(aid per capita). I have an interaction term between log(aid) and Foreign direct Investment inflows (net inflows, % GDP). I am unsure of interpretation of a marginal effects plot for a fixed effects model with FDI held at below average (-30%), average (5%) and above average (40%).
xtreg lnexports c.lnaid##c.fdi gds ps lngdppercapita lnpop
I have attached the results I get.
Would I be correct in saying that a 1% increase in aid leads to a 0.12% fall in exports, holding FDI constant at 5%???
I would really appreciate any assistance. Thank you!
What are the key determinants of building a risk management system for investing in cryptocurrencies conducted in speculative financial operations and investment transactions carried out on online trading platforms?
In recent years, there has been a rapid development of cryptocurrencies and their applications in online payments and settlements and their treatment as alternative investment instruments. Internet-based trading platforms are being developed, where speculative trading and investment using cryptocurrencies is expanding. Some investment banks, internationally operating corporations, social media sites are creating their own cryptocurrencies. Some investment funds have been investing part of their active funds in selected cryptocurrencies for many years. However, due to the lack of a developed institutional oversight system for transactions, payments and investments using cryptocurrencies. Consequently, speculative financial operations and investment transactions carried out on online trading platforms are characterised by a high level of investment risk. Consequently, it is important to build a risk management system for investing in cryptocurrencies.
In view of the above, I address the following question to the esteemed community of researchers and scientists:
What are the key determinants of building a risk management system for cryptocurrency investment conducted in speculative financial operations and investment transactions carried out on online trading platforms?
What do you think about this topic?
What is your opinion on this subject?
I invite you all to discuss,
Thank you very much,
I want to see the impact of a certain economy's govt policy on FDI inflows or to attract FDI inflows. I am a bit confused about variables that can be used as a proxy of government policy.
Please help me out with a link to data on Inward flow/stock of Foreign Direct Investment (FDI) by sectors (e.g., primary, secondary, etc) for individual countries in sub-Saharan Africa (SSA)
I am a student of BBA. I want to do my research project on FDI in Bangladesh. As unemployment is a severe problem in our country, foreign direct investment can play a significant role.
What could be the relationship between FDI and unemployment in the context of developing country.
Dear RG community,
I have been studying the impact of the political, economic and financial risk indices on stock market returns, so I need monthly data (or quarterly or annual) from ICRG Database political, financial, and economic risk ratings from 1984 to 2020 for all countries?
Table 3B: Political Risk Points by Component, 1984-2020
Table 4B: Financial Risk Points by Component, 1984-2020
Table 5B: Economic Risk Points by Component, 1984-2020
Unfortunately, me or my organization do not have access to the (ICRG) database, so I would greatly appreciate your help in obtaining this data, if you can.
Just in case of you may need, my e-mail is firstname.lastname@example.org
Thank you in advance.
This discussion will focus on research that is related to FDI. It will primarily be a discussion and a sharing platform of Resources and Knowledge for the research on FDI. It is with collaborating that we can improve upon the quality of the research on FDI. I will be sharing my resources here so that the scholarship can benefit from it and a lot of time and effort that is put into searching for resources and knowledge about the research is saved here.
For The Sake of Research
- Bilateral FDI flows of the World Economies.
The source of the data is UNCTAD.
- Journal of Finance in SCOPUS.
Ranking and metrics of Journals of Finance in SCOPUS
- Country Wise Bilateral FDI Datasets
| 2001-12 |
|INFLOWS & OUTFLOWS|
|INSTOCK & OUTSTOCK|
There are many studies which have shown a positive impact of Foreign direct investment on the economic growth of the host country, where some of the researchers have claimed that FDI puts a negative impact on the host country by creating environmental pollution. This has created many arguments.
I want to know why absorbing FDI in some countries favors them more than others? for example why it contributed more to china or south Korea but not 4 Asian tiger? I think the answer isn't free market rules but what it could be? the government interference? the joint companies? the targeted FDI ?
is there any index to indicate to measurement of FDI benefits to GDP rate? and is there any thing for evaluation of its impact in different countries?
I am writing a research regarded to this question and I am looking for technics to evaluate why FDI had led to boost growth an in countries like Mexico the growth rate is relatively low?
how can I measure the impact of foreign direct investment (FDI) on economic development of a country?
I want to know why some countries are benefitting from FDI and why some aren't?
Hello, dear researchers! I was wondering if someone can tell me where to find data for CO2 emissions, Foreign Direct Investments, Gross Domestic Product and Energy Consumption by industrial sectors? I want to do a study that will, among other things, have these variables (CO2 emissions, FDI, GDP and EC) in the regression model, but by industrial sectors. For now I have found the data only for FDI on the official web page of National bank of my country, but only for 10 years, and I wasn't lucky in finding the data for CO2 emissions, GDP and EC.
I hope that someone will help me with this. I would be very thankful.
I have FDI data series of more than 40 years. But the series contains negative values of 5 different years. Since, I am using FDI as independent variable and necessary to transform those values in log form. What are the methods that I can transform negative data set in to log form?
For my undergrad dissertation, I am looking to qualitatively explain the determinants of FDI in Pakistan and identify the barriers restricting it. I therefore need a selection of key theories from which I can frame my report in order to effectively answer the question. Please comment any key theories/papers that you believe will be helpful. TIA
To answer to this question, data from 43 Sub-Sahara African countries was collected for 2017. Correlation and regression were performed to find the relationship between gross domestic product (GDP) and foreign direct investment inflows (FDI) in selected countries.
The results show that FDI did not impact significantly GDP for 2017.
The estimated regression coefficient of FDI on GDP is 13.394. This coefficient is not statistically significant. The p-value of the coefficient is 0.119, R-squared: 0.0581, Adjusted R-squared: 0.03512. The results are not surprising because the correlation between GDP and FDI, is weak, and the relationship can be ignored. The test of Pearson's product-moment correlation fails to reject the null hypothesis of the no existence of a significant linear relationship between FDI and GDP.
The importance of mediator variable analysis relies on providing a better understanding of the mechanism by which a cause (independent variable) has an effect on a result (dependent variable).Mediation explains how an independent variable (X) affects a dependent variable (Y) through one or more interacting variable(s) or mediator variable(s) (M) and the direction of this effect (Özdil & Kutlu, 2019).
To analyze the mediating effects of house hold consumption (HHC) in the relationship between gross domestic product (GDP) and foreign direct investment inflows (FDI) in 28 low and low-income African countries, data related to GDP, FDI and HHC was collected for 2017 period. Using Bootstrap method, the result shows a statically significant direct effect of FDI on GDP (path C) 13.989. However, when controlling for mediator variable (HHC), the direct effect of FDI and on GDP is reduced, and becomes not statically significant (path c') 2.064. The indirect effects become statically significant 11.925 suggesting mediation effect of HHC in the relationship between GDP and FDI. Therefore, low and low-income African countries should stimulate an increase in foreign direct investment to boost their gross domestic product.
Many studies have analyzed the way foreign direct investment inflows (FDI) affect gross domestic product (GDP). However, little is known about the indirect effects produced by FDI on GDP in Sub-Sahara Africa.To analyze indirect effects produced by FDI on GDP, I would like to ask an interested researcher to join me on this project as co-researcher.
Interested researcher can joint me.
There are many debates on the impact of foreign direct investment inflows on gross domestic product in host country. However, little is known about the indirect effects of foreign direct investment inflows on gross domestic product. The result of the analysis confirms the existence of direct effect ignoring how the effected was generated through some other variables.This may be due to the methods that are generally used in the research while analyzing the relationship between foreign direct investment inflows and gross domestic product. Some of the methods used are multiple regression models (Abbas, Akbar, Nasir, Aman & Naseem, 2011), correlation and regression model (Nadeem, Naveed, Zeeshan & Sonia, 2013), cointegration analysis (Nosheen 2013), simple regression (Tamilselvan, & Manikandan, 2015), generalized least squares estimator (Khan, Shiraz, Mehboob & Farhan 2014). They concluded on the positive effect of foreign direct investment inflows on gross domestic product without considering the possible indirect effect.Not analyzing the existence of indirect effect that foreign direct investment may have on gross domestic product through a third variable may lead to a biased conclusion. One variable may have effect on the other variable trough a third variable, without this there may be no direct effect.
By applying causal steps procedures recommended by Baron and Kenny (1986), I analyzed the relationship between foreign direct investment inflows (FDI) and gross domestic product (GDP) in low and low middle income countries. The result of the analysis shows that there is a complete mediation of FDI through house hold consumption, a partial mediation of FDI through female labor participation, a partial mediation of FDI through dependency age youth, and partial mediation of FDI through female unemployment rate.
How do you measure a research question in economics I am writing on Chinese Foreign Direct Investment?
COVID-16 has impacted businesses across the borders for MNCs. Many projects are under hold and new/just started projects are under review by parent companies. What would you think that COVID-19 would really increase or decrease the FDI in your country.
The negative sign of outflows means the disinvestments by domestic investors in foreign economies, so actually it is inflows because domestic investors are pulling money from abroad to local economy, in contrast, the negative sign of inflows means the foreign investors are pulling money from the local economy to their home abroad, so it is actually outflows. IMF uses this method which is known as "BPM6" to report capital flows. Bear in mind that the outflows of FDI, FPI and other investments are reported as an assets and the inflows of FDI, FPI and other investments are reported as liabilities. With that being said, how could we calculate the net capital inflows and outflows? For more clarification I have added an attachment of Argentina's capital flows for the year 2000, Argentina had positive FDI and FPI outflows in that year for quarter 1, but other investment outflows were negative, so that means that other investment outflows are actually inflows because of the investments repatriated home by domestic investors. In the same period, in terms of inflows, Argentina had positive FDI and FPI inflows, but the other investments inflows were negative, so the other investments inflows are actually outflows. Therefore, in order to calculate net capital inflows we add the absolute value of the other investment outflows to the positive values of FDI and FPI inflows(|-other investments outflows|+FDI inflows+FPI inflows). The same thing for net capital outflows, we add the absolute value of negative other investment inflows to the positive values of FDI and FPI outflows (|-other investments inflows|+FDI outflows+FPI outflows).
Am I right???
What kind of analysis of economic and other data provides better knowledge for investing in securities listed on the stock exchange?
Which analysis, ie fundamental or technical analysis, provides better knowledge for investing in securities listed on the stock exchange?
Thanks to which analysis, ie fundamental and technical analysis, investors achieve the best results in investing, the highest returns on investments in securities listed on the stock exchange?
Which investment strategies are the most effective? Are the most effective investment strategies based on conducting fundamental or technical analysis and maybe on a specific combination of both types of analysis?
The Investment Redistributive Incentive Model (IRIM).
Tourism holds the hopes of many in creating job opportunities for the masses of the unemployed globally. The poor growth of economies has failed to address the problems of unemployment, poverty and inequality. For growth to be impactful, foreign direct investment is considered one of the sources of the required impetuses. It is possible to incentivize both foreign (direct) and local investments. This paper, which was prepared using secondary sources of information, argues that it is possible to introduce incentives linked to investments in what is posited as the Investment Redistributive Incentive Model (IRIM). The IRIM rewards companies that support local ownership and control of enterprises through an incentive system en route to total liberation/local control of enterprises in whole geographic areas as the ultimate goal. The IRIM uses investment incentives such as tax cuts, breaks or relief as redistributive instruments to effect change through the reconfiguration of the management and ownership structures of companies. IRIM could be applied in any company, large or small, for equity and social justice. Foreign investors could also be linked to educational institutions in relation to facilitating the supply of skilled workers. Redistributive formulas become imperative to avert the various forms of societal dissonance because current trajectories are not sustainable where only a few get rich while the majority remain poor in a world trapped in a capitalistic and narcissistic modus operandi.
- models used to assess the determinants of FDI (Panel data will be used)
- I want to see its impact on economic growth on a single economy
- furthermore, I want to see its effect on income inequality
therefore, I need
- econometric models
- the dominant theories
- empirical research that Pro- FDI and against FDI
- debating issues in FDI
Control of Corruption, Foreign Direct Investment Political Stability, Government Effectiveness,Regulatory Quality, Rule of Law, Exchange Rate, Population, Population Growth, Trade Openness, Infrastructure, Inflation, Voice and Accountability, Market. Please I need help classifying the level of measurement for these variables.
I’m working with a panel data about Foreign Direct Investments using FDI flows as endogenous and, among others, FDI stock in the previous year as one of the explanatory variables. If we use the lagged endogenous as an explanatory variable we would have a dynamic panel data model and we should use a convenient estimator (say Arellano Bond, for example). However, in my case, I'm not using as exogenous the lagged endogenous (flow [yt-1-yt-2]), but the lagged stock of FDI (yt-1). Should this case be considered as a dynamic model too? Should it be estimated using Arellano&Bond or similar to avoid the inconsistency and Is there any specific alternative for this type of specification?
I am trying to examine the effect of Inflation threshold on economic growth. Where Real GDP growth rate is use as proxy for economic growth. The vector of explanatory variables includes: net Foreign Direct Investment (FDI) inflows in GDP, active population growth rate, trade openness, Growth rate of government expenditure, Human capital index and Financial Development
(broad money represented by the M3 monetary aggregate to nominal GDP). In this regard despite it is not a necessary condition; but thought fit to test for unit roots. Thus, I discovered that dependent variable is I(0) and all the independent variables are I(1). My question is; should I go head with the ARDL approach?
I need the Data for Chinese Outward Foreign Direct Investment for all countries during the period of 1980 to 2018.
I anyone can assist please reply
After submitting this paper to a journal, I have received feedback that it is not possible to make a contribution to this literature with analysis at such a macro level and I should look at firm-level data or case studies to do the analysis. This cant be correct can it?
Green-field and brown-field investments are two different types of foreign direct investment. Green-field investments occur when a parent company or government begins a new venture by constructing new facilities in a country outside of where the company is headquartered. Brown-field investments occur when an entity purchases an existing facility to begin new production.
I would like to test the relationship and impact of FIIs investment of particular company on company's equity price and also want to know the impact of FIIs investment on Stock Index. Pls suggest me, what are the statistical tools good for conduct? I am using 10 years data.
I am currently undertaking an analysis of the determinants of FDI over 19 countries over 17 years. I am doing a fixed effects model and I have conducted this research without any issue. As an extension I am also attempting to conduct a dynaimc panel analysis using GMM in stata to see the effects of lagged FDI values.
I have used the paper 'Using Arellano – Bond Dynamic Panel GMM Estimators in Stata' to coduct my analysis.
My equation is as follows
xtabond2 lnFDI L.lnFDI GDPG lnOPEN lnLAB NRATE lnEDU CTAX INFLATION lnINFRA lnINSTI lnLABINSTI EU, gmm (lnFDI GDPG, lag (2 2)) iv (lnOPEN lnLAB NRATE lnEDU CTAX INFLATION lnINFRA lnINSTI lnLABINSTI EU)
FDI- foreign direct investment
GDPG - growth in GDP
OPEN- trade openess (imports+exports)
LAB- Unit labour cost
NRATE- interest rate
EDU- education level
CTAX-corporate tax rate
INSTI -institutional quality
LABINSTI - Labour institution quality
However, doing this a recieve a Sargan test with p-value of 0.000 and when i run with robust errors I recieve a p-value of 1.000 both of which indicate that I have overidentified my instruments. I am unsure of the cause of this and I apologise as I admit I have a low undertanding of GMM and IV regressions. I have 19 groups over 17 years and 236 observations. I also have 61 instruments.
Could someone give me some advice as to how to proceed ? I would like use the GMM model to model the effect of FDI.
Again, I apologise for my lack of knoweldge on this topic.
I am doing a research on the determinants of foreign direct investment in the electricity sector. As electricity sector/service industry serves the domestic market, the category of Foreign Direct Investment (FDI) is Marketing Seeking. The determinants of marketing seeking FDI are economic growth & its potential growth, domestic market structure and income per capita. However, I like to add infrastructure situation (road connectivity) as part of the determinant as electricity on-grid connects through road and geographical distance as another determinant which incur cost to investors, hence motive its choice of investment. Please add your comments.
We're doing an undergrad thesis on whether or not FDIs can boost development in Asian countries. We're comparing two groups of four countries, Asian tigers(where Japan is used instead of Taiwain due to difficulty in acquiring right data for regressions later on for Taiwan) and a group of LDC/MDC which consist of Malaysia, Phillipines, Singapore, and Thailand. The plan is to collect data on FDI inflows and examine whether FDI can explain GDP, GDP/c, HDI, and GDP-growth. We're gonna use Solow growth model but are thinking about adding atleast another theory that considers capital inflows and growth in the aforementioned variables. Do you have any suggestions on what growth theory would be adequate for our purpose?
Thank you in advance.
I am questioning myself about whether FDI in real estate influence real estate prices in 30 Chinese regions from 2000 to 2016 or not. Other variables include, food, rentals and construction material price index, wages, gdp, Foreign direct Investment in Real Estate, foreign funds in Real estate entreprise, the number of tourists, the population, the interest rate and the exchange rate RMB/USD.
Do you think I use GMM, ARDL or another model and if I should use error correction models?
Which is the better measure of strategic asset endowment of a country- count of total patents application filed or count of total patents granted? Studies, especially on location determinants of FDI use count of total patent applications filed. Any rationale for the choice?
To measure the effect of Foreign Direct Investment on the Gross Domestic Product.
The Washington Consensus is a set of 10 economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C. The term was first used in 1989 by English economist John Williamson.
- Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
- Redirection of public spending from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
- Tax reform, broadening the tax base and adopting moderate marginal tax rates;
- Interest rates that are market determined and positive (but moderate) in real terms;
- Competitive exchange rates;
- Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
- Liberalization of inward foreign direct investment;
- Privatization of state enterprises;
- Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
- Legal security for property rights.
- Source: Wikipedia
Dear RG members
China already touches peak of International trade and becoming the world largest trading country. What is the real strategy behind One belt and one Road "OBOR". What are the short and long term benefits to host economies ??
Please share your ideas and thinking.
Now drafting a paper on the application of proportionality principle in International Investmen Arbitration, with special references to OXY v Ecuador. Research has shown until this moment, a wide acceptance on this issue. And this is my query: Isn´t there a discordant voice in mainstream academic publishing on the issue?
I intend to find out determinants of FDI at country and sectoral level. What could be the most relevant theories of FDI. There are several theories which explain the behaviour of multinationals and FDI like Dunnings' OLI, Product Cycle Theory, Transaction Cost Theory etc.
I wish to determine the main sub-events on a traces. However, They are usually overlapped and some simple method like finding local maximum is easily defaulted by a small noise added on a main pulse. I think maybe I should get the envelop first and then find the main sub-events orderly. Do you have better idea about how to do it automatically and efficiently?
Is Initial Public offering (IPOs) are underpriced and underperformed in the long run in the developed economy like USA, UK, Japan?
I am working on a paper related to Government policy changes and its impact on FDI inflows in India. When I look at inflows of FDI data after 1990, the trend is very normal from 1990 to 2005 but after that is has increased very sharp. I did not find any solid reason for this change. Is there any FDI limit change? or Other major policy change? or Any Definition change in FDI/
Please update if you know anything related to it or you can suggest some papers also so that I can find something from that.
Where can find information about Foreign Direct Investment in Agricultural sector in the World?. I need data, statistics, report about this topic to study the impacts of foreign direct investment in agricultural sector in the next years.
I am building up the database for one of my research projects wherein I need to look at the internationalization path of the companies from the time of first foreign market entry till the current year, particularly looking at the mode of entry, time gap between subsequent entries and foreign markets covered over the period of time.
I need help on the following query- In the year 2000, a company makes its first foreign market entry in US via setting up a Wholly owned subsidiary (WOS). This transaction of setting up WOS in US is recorded in my datasheet as the company's first venture into foreign market. Now subsequently in the year 2003, the same company wins the contract in the US market. This contract may be executed by the headquarters (or the parent company) based in India or the WOS in US.
So I want to know whether this subsequent stint in US as winning of contract should be recorded as subsequent internationalization? Would the answer be different in the following two cases-
1. The execution of contract is overseen by the parent company in home market (India in my case).
2. The contract is being executed by the WOS established in US in the year 2000.
Today's US$ rate is 97.9 rupees, whereas it was 113 a few months ago...<br /><br />
I have found the following reasons:<br /><br />
1. the forex reserves of the country have improved from USD 7.59 billion as on February 7, 2014 to USD 9.37 billion as on March 7, 2014, Dar said. <br />
2. Sentiments have shifted due to positive IMF staff reviews, expectations of significant aid and investment inflows in 2014, and interventions by the State Bank of Pakistan (SBP) through the forward/swap market,” Sayem Ali said, an economist. <br />
3. The expected receipt of $550 million from the International Monetary Fund (IMF), along with the launch of Eurobonds amounting to $500 million likely next month, has also led to positivity in the foreign exchange market. <br />
4. The trade with Afghanistan will be in dollars from 17th of this month which means Pakistan will receive up to $2 billion per year through this source, Atif Ahmed said, an inter-bank dealer <br />
5. According to the State Bank of Pakistan, the country received foreign direct investment (FDI) of USD 523 million in the first seven months of 2013-14 and USD 106.9 million in January alone. <br />
6. Inter-bank dealers said the daily market turnover (selling to banks) went beyond $400 million against average earlier inflows of about $300m
I'm investigating the determinants of foreign direct investment to least developed countries in sub-Sahara African countries and so searching for the operational definitions of the above words as considered in prior studies.
I am planning to work on a paper where I would need country wise break up of Outward FDI from India. RBI has firm level data starting from 2007, whereas UNCTAD gives country wise data for 2010 to 2012 only. Is there any single source- paid or unpaid?
Emerging economies have poor infrastructure and low saving rates. They need investment in physical capital to improve their performance. Foreign savings should flow into developing countries filling this gap. Private and public moneys diverge in several instruments. They vary between equity coming from firms or lending from international institutions. Could you help me to scrutinize literature on this matter?
Hi there! Im struggling writing a Chapter about Chinese aid and investment in West Africa, because up-to-date information appear to be a little bit scarce. So, where I can find information about this matter? Thanks in advance.
Is it possible/reasonable to relate aggregate indicator against sectors indicator? Sectoral employment and aggregate FDI, Sectoral output and agg FDI?
Perhaps, one of the strongest arguments for emerging Nations to transit to International Financial Reporting Standards (IFRS) is that it will open the flood gate for inflow of Foreign Direct investments (FDI) into such countries. It would appear however that the flow of FDI to any country depends on many complex factors other than mere adoption of IFRS
And, on the contrary, same for the negative impact (less privatization results in less Greenfield FDI)? If possible linked to the CEEC area.
Thanks in advance, ZV