Causality between Foreign Portfolio Inflows and Economic Growth: Evidence from China and India

Ahmad, Fayyaz; Yang, Shijian; Draz, Muhammad Umar

doi:10.5539/ijef.v7n10p163

Cited by 6 publications

(7 citation statements)

References 30 publications

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“…Aziz et al (2015) report that FPI is useful in obtaining higher investment returns and a reasonable decrease in investment risk because of its dynamic nature of international investment diversification. Ahmad et al (2015) report that economic growth sustainability will influence FPI and aid international investment diversification. Furthermore, different studies also explain that push factors reflect the international economic forces that push capital flow from one country to another country.…”

Section: Overview Of the Literature On The Determinants Of Fpimentioning

confidence: 99%

“…Brink and Viviers (2003:225) state that due to the fluctuation, the allocation of resources will be affected because the volatility will influence foreign investment capital. The exchange rate reflects a significant relationship with FPI because when it appreciates, it shows a speculative opportunity for investors, and they like to invest and diversify their investment in the form of FPI (Ahmad et al, 2015). In another study, exchange rate fluctuation is mentioned as an essential risk factor that will affect the portfolio investor's investment decisions and cause uncertainty in their returns (Ncube et al, 2012:22).…”

Section: Exchange Ratementioning

confidence: 99%

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The effect of the adoption of International Financial Reporting Standards on foreign portfolio investment in Africa

Omotoso

Schutte

Oberholzer

2021

South African Journal of Accounting Research

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1994 to 2015 on total foreign portfolio investments in liabilities (equity and debt) were collected.Panel data regression analysis incorporating pooled regression, fixed-effects, and random-effects models was estimated. Also, the generalised method of moment estimator was employed to address the problem of endogeneity, usually associated with panel data analysis and as a robustness check for the model. The logit regression model was used to examine the determinant factors of IFRS adoption.Various statistical tests were estimated, such as the diagnostic test, using the histogram and Jarque-Bera statistics, difference-in-difference (DID) test, the unit root test, and the cross-sectional dependence test. The Hausman's chi-square was estimated to determine the best alternative technique between the fixed-effects and random-effects models. Also the Arellano-Bond estimator autocorrelation 〈1〉 and 〈2〉 was used to evaluate the validity of the variable instruments in the model. Besides, the average marginal effect (AME) was estimated for the effect of each covariate on the result. Certain covariates were estimated as control variables in the model.The statistical results show a significant and positive effect of the adoption of IFRS on FPI inflows after the adoption and implementation of IFRS in adopting countries. Equally, the finding further indicates a significant difference in the volume of FPI inflows after the adoption of IFRS than before the adoption, in adopting countries. The statistical estimates also reveal a positive and significant effect of IFRS adoption on FPI in adopting countries, compare with non-adopting IFRS countries where it shows a negative and non-significant relationship. It shows that countries that adopted IFRS experience more inflows in FPI compare with the non-adopting countries in Africa.Furthermore, the logit regression results show that culture, the legal system, political system, investor protection, market capitalisation, and tax were found to be positively significant with the probability of adopting IFRS in the logistic model. This thesis, therefore, suggests that the adoption of IFRS is justified in the selected countries in Africa since the results indicated a positive and significant effect of IFRS adoption on FPI in these countries. Hence, substantiated the assumption of IFRS proponents that adoption will enhance the flow of FPI in adopting countries for economic development. Policies measure to monitor the activities of listed firms and to enforce compliance with IFRS rules and regulations are warranted.These policies would further enable IFRS adopting countries to enhance more flow of FPI.

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Section: Overview Of the Literature On The Determinants Of Fpimentioning

confidence: 99%

Section: Exchange Ratementioning

confidence: 99%

The effect of the adoption of International Financial Reporting Standards on foreign portfolio investment in Africa

Omotoso

Schutte

Oberholzer

2021

South African Journal of Accounting Research

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“…Bu bulgu portföy yatırımlarının GSMH'nın bir göstergesi olarak kabul ettiğimiz sanayi üretimi üzerinde bir etkisi olmadığını göstermektedir. Bu bulgular literatürde yer alan çalışmaların bulgularıyla da uyumludur (Durham (2003), İnsel ve Sungur (2003), Duasa ve Kasim (2009), Yıldırım ve Taştan (2012), Ahmad (2015) Hata düzeltme katsayısı beklentiler dahilinde negatif ve istatistiksel olarak anlamlı bulunmuştur. Katsayı yaklaşık -0,14'tür.…”

Section: Model Bulgularıunclassified

“…Son olarak bu bulguların sağlamlığı alternatif modeller olan statik FMOLS ve DOLS modelleri ve dinamik Markov Switching modeli kullanılarak test edilmiş ve alternatif modeller de ARDL modeli ile benzer sonuçlar vermiştir. Çalışmadan elde edilen sonuçlar, literatürdeki Durham (2003), İnsel ve Sungur ( 2003), Duasa ve Kasim ( 2009), Yıldırım ve Taştan (2012) ve Ahmad (2015)'ın elde ettikleri sonuçlara benzerlik göstermektedir.…”

Section: Sonuçunclassified

Türkiye İçin Kısa Vadeli Sermaye Akımları ve Reel Döviz Kurunun Ekonomik Büyüme Üzerine Etkilerine İlişkin Uygulamalı Bir Araştırma

Ayhan

2019

Journal of Yaşar University

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Tasarruf açığı ve sermaye birikimi yetersizliği sorunu olan ülkeler, neoliberal politikaların da etkisiyle finansal serbestleşmeye yönelik politikalar uygulamışlardır. Bu nedenle yabancı sermaye hacimlerini arttırmak için yabancı sermaye kısıtlayıcı engeller kaldırılmıştır. Benzer biçimde 1990'lardan itibaren Türkiye de finansal serbestleşme yolunda yabancı sermaye girişini serbestleştirmiştir. Fakat finansal yapı, makroekonomik istikrarsızlık ve politik çalkantılar gibi sebepler bu dönemde Türkiye'nin kriz eğilimlerini artırmış ve kısa vadeli sermaye hareketlerdeki ani duruş etkisi nedeniyle ciddi krizler yaşanmıştır. Bunun yanında her türlü yabancı sermaye girişinin ekonomilere yaptığı olumlu katkılarda yok sayılamamaktadır. Bu çalışmada kısa vadeli sermaye hareketleri ve reel döviz kuru arasındaki değişimin ekonomik büyüme üzerindeki etkisi teorik ve ampirik olarak incelenmiştir.

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“…He reached to a conclusion that the exchange rate adjustment would not lead to substantial improvements in macroeconomic conditions. Both FDI and FPI, apart from market efficiency contribution help to finance the deficit of BOP and preserve the foreign currency reserves (Ahmad, Yang & Draz, 2015).…”

Section: Business and Economic Researchmentioning

confidence: 99%

Impact of Foreign Direct Investment Inflows on Capital Account of India’s Balance of Payments

Rahman

2016

BER

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Transfer of capital from one country to another has been unrestricted in the present era of globalisation. The capital transfer may take one form or the other. One of the forms of capital transfer is Foreign Direct Investment Inflows (FDI Inflows) and it is an integral determinant of Capital for developing countries. FDI means the investment of funds by a foreign entity (particularly a Transnational or Multinational Company) by creating new equity base in host or home economy or vice versa. As FDI Inflow is a macroeconomic variable, it is represented in the balance sheet of the country known as Balance of Payments (BOP). The balance of payments of a country is a systematic record of all economic transactions between the residents of the reporting country and residents of foreign countries during a given period of time. To identify the happenings in the international payments, a record of the transactions between countries is necessary. The record of such transactions is made in the balance of payments account. The paper aims to measure the impact of FDI Inflows on Capital Account of India's BOP. The time period for the study is 1991-1992 to 2014-15.

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Causality between Foreign Portfolio Inflows and Economic Growth: Evidence from China and India

Cited by 6 publications

References 30 publications

The effect of the adoption of International Financial Reporting Standards on foreign portfolio investment in Africa

The effect of the adoption of International Financial Reporting Standards on foreign portfolio investment in Africa

Türkiye İçin Kısa Vadeli Sermaye Akımları ve Reel Döviz Kurunun Ekonomik Büyüme Üzerine Etkilerine İlişkin Uygulamalı Bir Araştırma

Impact of Foreign Direct Investment Inflows on Capital Account of India’s Balance of Payments

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