Determinants of foreign direct investment in ASEAN: A panel approach

Hoang, Hong Hiep; Bui, Duc Hung

doi:10.5267/j.msl.2014.12.015

Cited by 30 publications

(29 citation statements)

References 24 publications

(39 reference statements)

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“…Many studies have been conducted on the relationship between capital flight and macroeconomic variables. Studies such as those by Brada (2011) and Hoa and Lin (2016) found a negative relationship between capital flight and macroeconomic variables, while Aderoju (2017), Saheed and Ayodeji (2012), and Uguru et al, (2014) found a positive relationship. Although most of the reviewed studies focused on the impact of capital flight on economic growth, the effects of capital flight on economic development have not been considered.…”

Section: Introductionmentioning

confidence: 96%

Capital Flight and Economic Development: Evidence from Nigeria

Akinwale¹

2020

Management and Economics Research Journal

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This study examined the nexus between capital flight and economic development in Nigeria. The null hypothesis was that capital flight has no significant relationship with economic development in Nigeria. The study used the auto regressive distributed lag (ARDL) method on data obtained from the Central Bank of Nigeria and the World Bank, for the period 1986–2018, to examine the relationship between capital flight and economic development in Nigeria. The study examined the unit root problem and cointegrating properties of the data. The unit root problem was tested for by using the augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests. Findings from ARDL showed an inverse relationship exists between capital flight, real exchange rate, and economic development. This implies that the variables contributed significantly to reduce economic development within the study period. However, a positive relationship existed between economic development and adult literacy rate in Nigeria. By implication, improvements made in providing quality and affordable education tend to have a positive impact on economic development in Nigeria. The study concluded that economic development is strongly influenced by capital flight, real exchange, and adult literacy rates in Nigeria. The study, therefore, recommends that government policies to curb capital flight should be introduced and monitored so as to lead to economic development in Nigeria.

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Section: Introductionmentioning

confidence: 96%

Capital Flight and Economic Development: Evidence from Nigeria

Akinwale¹

2020

Management and Economics Research Journal

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“…Trade openness (XM) means that trade barrier has been relaxed by the host country and it is an opportunity for investors to fully utilized the comparative advantage. Studies done by [9] and [10] found a significant positive impact of trade openness and GDP.…”

Section: Literature Reviewsmentioning

confidence: 91%

“…As mentioned in [1] factors influence GDP in ASEAN countries was FDI (proxy for investment inflows), labour productivity, trade openness, inflation rate (proxy for cost of production) and population growth (proxy for population density). GDP reflects the economic conditions and it gives positive impact to FDI as it reflects potential of the host country as validated by [9]. .…”

Section: Methodsmentioning

confidence: 99%

Untitled

2019

IJUR

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Macroeconomic objective for every country is to achieve ideal economic performance and it can be measured by analyzing growth of Gross Domestic Product (GDP). The aim of this empirical article is to explore the factors that determine GDP in ASEAN-5 countries over a period of 1998 to 2018 using static panel data analysis. Pooled Ordinary Least Square, Random Effect and Fixed Effect models were regress and result shows that Fixed Effect model is the most appropriate model to estimate factors determine GDP in ASEAN-5 countries. The results demonstrate that foreign direct investment (FDI) and labour productivity are the most significant variables; while trade openness, inflation rate, and population growth have no significant effect on GDP for ASEAN-5 countries. This article is significant because it contributes to the literature on factors influences GDP by encompassing the scope of previous studies.

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“…The available literatures are indeterminate to disclose the relationship between FDI inflows and labour productivity. The study of Hoang and Bui (2015), Peluffo (2014), Axarloglou (2004), Conyon et al (2002), Woodward (1992) and Cushman (1987) found a positive relationship between labour productivity and FDI inflows. On the other hand, the study of Boghean and State (2015) and Mebratie and Bedi (2013) revealed absence of relationship between labour productivity and FDI inflows, while Thiam Hee Ng (2006) found a positive weak relationship between these variables.…”

Section: Literature Reviewmentioning

confidence: 93%

Causal Nexus Between FDI Inflows and Its Determinants in SAARC Countries

Kumar

Sharma

2020

South Asia Economic Journal

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This article aims to understand the drivers of foreign direct investment (FDI) inflows and its nexus with its determinants such as economic growth, inflation rate, labour productivity, infrastructure development, market size, openness of the economy, political stability and corporate tax for South Asian Association for Regional Corporation (SAARC) countries. The article is based on secondary data from the World Bank and International Labour Organization (ILO) for 19 years from 2001 to 2018 for 6 SAARC countries, viz. Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka. The findings indicate that there exists long-run, short-run and joint causal relationship among infrastructure development, market size, openness of the economy, political stability and corporate tax and FDI inflows. Among these variables, the corporate tax is the most important one because it shows bidirectional causality with FDI inflows in the long run as well as short run along with joint strong causality. However, only the coefficients of infrastructure development and corporate tax were found to be positively and negatively significant, respectively. Therefore, better infrastructure development and decrease in corporate tax may enhance FDI inflows in SAARC countries. This infers that with the decrease in corporate tax, more FDI inflows may take place, and higher FDI inflows may decrease in corporate tax further. Therefore, this article suggests that SAARC countries should accelerate the process of integration of their economy with the rest of the world along with political stability, enhance the infrastructure facility and reduce the corporate tax to get the higher FDI inflows. JEL: F21, F02, C22

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Determinants of foreign direct investment in ASEAN: A panel approach

Cited by 30 publications

References 24 publications

Capital Flight and Economic Development: Evidence from Nigeria

Capital Flight and Economic Development: Evidence from Nigeria

Untitled

Causal Nexus Between FDI Inflows and Its Determinants in SAARC Countries

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