Determinants of foreign direct investment and volatility in South East Asian economies

Vadlamannati, Krishna Chaitanya; Tamazian, Artur; Irala, Lokanandha Reddy

doi:10.1080/13547860902975010

Cited by 24 publications

(19 citation statements)

References 25 publications

(17 reference statements)

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…It is considerably true that FDI is one of the most effective ways by which developing economies are integrated with rest of the world, as it provides not only capital but also technology and management know-how necessary for restructuring the firms in the host countries (Pradhan, 2006;Borensztein et al, 1998;Chao and Yu, 1994;Grossman and Helpman, 1991;Barro and Sala-I-Martin, 1995). FDI usually fills up at least three developmental goals such as (1) saving investment gap by contributing the much needed capital for domestic investment (Vadlamannati et al 2009); (2) foreign exchange gap by generating foreign currency through initial investments and subsequent export earnings; and (3) tax-revenue gap by accumulating tax revenues through additional socio-economic activities (Noorbakhsh et al, 2001;Smith, 1997). The positive impact of FDI on economic growth is driven by transferring knowledge and other firm assets (Sethi et al, 2003;Hermes and Lensink, 2003) relating to productivity improvement or the spillover effects of FDI (see Figure 1).…”

Section: Introductionmentioning

confidence: 99%

The FDI- Led- Growth Hypothesis in ASEAN- 5 Countries: Evidence from Cointegrated Panel Analysis

Pradhan¹

2009

IJBM

View full text Add to dashboard Cite

The paper works out the relationship between foreign direct investment (FDI) and economic growth in the five ASEAN countries namely, namely Indonesia, Malaysia, Philippines, Singapore and Thailand over the period . The empirical analysis is based on cointegration and causality test, both at the individual level and panel level. The results confirm that foreign direct investment and economic growth are cointegrated at the panel level, indicating the presence of long run equilibrium relationship between them. This is, however, true only for Singapore and Thailand at the individual country level. The Granger causality test further gives evidence that there is bidirectional causality between foreign direct investment and economic growth both at the panel level as well as individual country level except Malaysia.

show abstract

Section: Introductionmentioning

confidence: 99%

The FDI- Led- Growth Hypothesis in ASEAN- 5 Countries: Evidence from Cointegrated Panel Analysis

Pradhan¹

2009

IJBM

View full text Add to dashboard Cite

show abstract

“…Host country policies such as the promotion of private ownership, trade policies/ FDI policy, legal framework, and governance Except Agrawal (2000) and Sahoo (2006Sahoo ( , 2012, no study focuses on infrastructure and reforms in South Asia. A few studies on developing countries include South Asian countries (such as Vadlamannati et al 2009), and some studies are specific to South Asian countries (Shah and Ahmed 2003;Banga 2004). However, the present study is different and comprehensive, as mentioned in the introduction.…”

Section: Brief Literature Reviewmentioning

confidence: 99%

Determinants of FDI in South Asia

Sahoo

Nataraj

Dash

2013

Foreign Direct Investment in South Asia

View full text Add to dashboard Cite

“…Further, it is also attributed to the FDI volatility which is generally believed to negatively affect the economic growth through capturing the growth-retarding effects of unobserved variables (Lensink & Morrissey, 2006), exacerbating macroeconomic uncertainty and their counter-cyclical effect (Choong & Liew, 2009). The FDI volatility is, however, influenced positively by the macroeconomic barriers from political and economic instability (Guillaumont & Chauvet, 2001), and political, institutional and socioeconomic factors (Vadlamannati, Tamazian, & Irala, 2009) and negatively by the institutional quality (Buchanan et al, 2012).…”

Section: Literature Review and Theoretical Underpinningmentioning

confidence: 99%

Impact of foreign direct investment volatility on economic development in the Indian subcontinent

Bairagi

2017

World Economy

View full text Add to dashboard Cite

Using annual data over forty years from 1975 to 2014, this study investigates the gross domestic product (GDP) growth and the conditional volatility of foreign direct investment (FDI) in the Indian subcontinent. The study reports the rising trends of both FDI and GDP and documents that the greater‐than‐expected FDI due to innovative shocks or policy innovations positively influences conditional volatility of FDI which, in turn, positively contributes to the economic growth/development. The conditional volatility used in the study is the variance derived from the diagnostically selected exponential GARCH (EGARCH) model. The study also reports the causality of both the FDI and its volatility across borders. More specifically, it reports bidirectional causality of FDI between India and Pakistan but unidirectional causality from Bangladesh to both India and Pakistan. It further documents that this volatility is persistent in all the economies and that it spillovers from both India and Pakistan to Bangladesh. The evidence attributes the economic development in the Indian subcontinent to the economic or policy innovations in attracting FDI. The findings of this study thus contribute to the literature by documenting the contrasting evidence that the volatility along with the trend of FDI contributes to the economic development and by reconciling the contrasting evidence.

show abstract

Determinants of foreign direct investment and volatility in South East Asian economies

Cited by 24 publications

References 25 publications

The FDI- Led- Growth Hypothesis in ASEAN- 5 Countries: Evidence from Cointegrated Panel Analysis

The FDI- Led- Growth Hypothesis in ASEAN- 5 Countries: Evidence from Cointegrated Panel Analysis

Determinants of FDI in South Asia

Impact of foreign direct investment volatility on economic development in the Indian subcontinent

Contact Info

Product

Resources

About