Does domestic financial development enhance the linkages between foreign direct investment and economic growth?

We argue that there exists an indirect link between globalization and the knowledge economy of African countries in which globalization influences 'peace and stability' and peace and stability affects governance, and through governance the knowledge economy. We model the link as a three-stage process in four testable hypotheses, which permits an empirical analysis without sacrificing economic relevance for statistical significance. The results indicate that the impacts on governance of peace and stability from globalization defined as trade are stronger than those of peace and stability resulting from globalization taken to be foreign direct investment. We conclude that foreign direct investment is not a powerful mechanism for stimulating and sustaining the African knowledge. However, since the effects of globalization on peace and stability can influence governance both positively and negatively, we also conclude that the prospect for the knowledge economy in African countries may be realistic and attainable, as long as these countries continue to engage in the kind of globalization that enhances peace and stability.

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“…However, he also observed that high human capital low-income countries benefit more from FDI than others (cf. Choong, 2012).…”

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confidence: 99%

Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries

Amavilah¹,

Asongu

Andrés

2017

Technological Forecasting and Social Change

167

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“…Keputusan terma interaksi ini mencadangkan bahawa kualiti pembangunan pasaran saham adalah pra-syarat yang penting bagi FDI untuk mengeluarkan kesan positif kepada pertumbuhan ekonomi. Dapatan ini adalah selaras dengan hasil kajian terdahulu bahawa kesan FDI kepada pertumbuhan adalah bergantung kepada kapasiti penyerapan negara penerima (lihat contoh, Hermes & Lensink 2003;Alfaro et al 2004;Azman-Saini et al 2010a;Choong 2012; antara lain). Justeru, dapatan kajian ini menekankan bahawa sebagai tambahan kepada dimensi kuantitatif yang kini ditumpukan dalam pembangunan kewangan, dimensi kualiti pembangunan kewangan juga merupakan elemen penting dalam hubungan FDI-pertumbuhan ekonomi.…”

Section: Kesimpulanunclassified

“…Secara kolektif, kajian-kajian empirikal yang baru yang menyiasat peranan pembangunan kewangan dalam hubungan FDI-pertumbuhan ekonomi, menunjukkan pembangunan kewangan adalah penting untuk negara mendapatkan kesan pertumbuhan daripada FDI (lihat, untuk contoh Hermes & Lensink 2003;Lee & Chang 2009;Azman-Saini et al 2010a;Choong 2012). Hermes dan Lensink (2003) mendapati bahawa pembangunan bank dan pasaran saham adalah prasyarat penting bagi limpahan FDI untuk direalisasikan secara positif.…”

unclassified

“…Lee dan Chang (2009) dan Azman-Saini et al (2010a) juga mendapati bahawa kesan limpahan FDI ke atas pertumbuhan ekonomi memerlukan pasaran kewangan yang berfungsi dengan baik. Begitu juga, dalam satu kajian baru-baru ini, Choong (2012) juga mendapati bahawa pasaran kewangan domestik yang maju adalah prasyarat untuk FDI memberi kesan kepada pertumbuhan ekonomi secara positif.…”

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Pelaburan Langsung Asing, Pertumbuhan Ekonomi dan Kualiti Pembangunan Pasaran Saham: Analisis Panel

Nor¹,

Low²,

Nor³

2015

JEM

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This study examines the role of stock market development quality in enabling foreign Keywords: Foreign direct investment; stock market development quality; economic growth PENGENALANPelaburan langsung asing atau diringkaskan sebagai FDI, telah berfungsi sebagai satu bentuk pemindahan modal antarabangsa yang utama di kalangan negara maju dan membangun (Froot 1993). Sejak dua dekad yang lalu, pelbagai negara telah mengambil inisiatif yang bersungguh-sungguh untuk menggalakkan ekonomi mereka sebagai destinasi pelaburan langsung asing. UNCTAD (2010) telah melaporkan aliran FDI meningkat dengan ketara dalam ekonomi maju dan membangun yang menetapkan FDI sebagai pemacu utama untuk pembangunan ekonomi. FDI telah menjadi pembentukan modal pilihan dan dikenal pasti sebagai salah satu faktor yang paling penting yang menyumbang ke arah perkembangan ekonomi melalui pelbagai manfaat.

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“…However, on multiple national levels, Alfaro et al, Niels and Lensink, and Choong et al concentrated on comparative studies between developed and undeveloped countries regarding financial market development under the effects of FDI spillovers. They revealed that countries with well-developed financial markets usually gained significant spillovers from FDI, and that FDI generated a negative effect on countries with poor financial markets [57,64,65]. Furthermore, Li and Zeng, Su and Song, and Luo also carried out comparative studies, but focused on the different financial market development phases.…”

Section: Introductionmentioning

confidence: 99%

An Empirical Research of FDI Spillovers and Financial Development Threshold Effects in Different Regions of China

Wang

Liu

2017

Sustainability

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Based on a comprehensive review of previous studies about the threshold effects of financial development on the process of foreign direct investment (FDI) spillovers, the present work roundly measures the financial development from the aspects of scale, structure, and efficiency and applies a multiple threshold regression model to estimate the threshold effects of financial development on FDI spillovers, and then examines the inherent relationship between FDI spillovers effects and the financial development from the three aspects, respectively, in different regions of China, based on regional panel data from 2000 to 2014. The results revealed that there are two thresholds of financial development scale, structure and efficiency, existing in the FDI spillover processes in different regions. The FDI spillovers effects are greatest in the eastern region and are generally smallest in the western region. There is a negative correlation between FDI spillovers effects and the financial development scale or efficiency in eastern and central region. Moreover, there is positive correlation between FDI spillovers effects and the financial development structure in eastern and central region. Additionally, there is a positive correlation between FDI spillovers effects and the financial development scale, structure, or efficiency in western region. The capital, labor, and regional technology progress have positive effects on economic growth in different regions and the effects of financial development on economic growth are not unanimous in each region. Based on the empirical results, some policies on how to develop regional finances and how to introduce FDI to promote economic growth are recommended.

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Does domestic financial development enhance the linkages between foreign direct investment and economic growth?

Cited by 67 publications

References 69 publications

Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries

Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries

Pelaburan Langsung Asing, Pertumbuhan Ekonomi dan Kualiti Pembangunan Pasaran Saham: Analisis Panel

An Empirical Research of FDI Spillovers and Financial Development Threshold Effects in Different Regions of China

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