Does Lockdown Bring Shutdown? Impact of the COVID-19 Pandemic on Foreign Direct Investment

Fu, Yingjie; Alleyne, Antonio; Mu, Yongtong

doi:10.1080/1540496x.2020.1865150

Cited by 43 publications

(38 citation statements)

References 22 publications

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“…Focussing on China’s FDI, Fang et al [ 14 ] found that the numbers of new confirmed cases, new deaths, and cumulative confirmed cases have significant negative impacts on FDI. By using monthly bilateral FDI data, Fu et al [ 15 ] found that (1) the outbreak reduced both the extensive and intensive margins of FDI; (2) the mortality rate reduced FDI margins; (3) FDI was more sensitive to the pandemic situation in host countries for both OECD and emerging countries; and (4) the service sector’s FDI was more severely affected by the pandemic than other sectors’ FDI. Nawoa and Njangang [ 32 ] examine the effect of the pandemic on FDI in 79 developed and developing countries and obtain results indicating that both the total number of deaths and cases are negatively correlated with FDI.…”

Section: Discussion: the Effect Of Covid-19 As A Crisis And A Disastermentioning

confidence: 99%

The effect of COVID-19 on foreign direct investment inflows: stylised facts and some explanations

Moosa

Merza

2022

Futur Bus J

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The COVID-19 pandemic has impacted every aspect of our lives. The economic effects include the adverse consequences for economic growth, international trade, and foreign direct investment. This paper presents stylised facts about the fall and rebound of FDI inflows as a result of the pandemic. The effects of COVID-19 are considered from three angles: macroeconomic shocks to the economy, theories of foreign direct investment, and studies of the economic effects of disasters and crises. The change of heart away from globalisation and deindustrialisation may discourage FDI flows, which have already been undermined by other factors such as the digitisation of the economy and the emergence of Industry 4.0.

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Section: Discussion: the Effect Of Covid-19 As A Crisis And A Disastermentioning

confidence: 99%

The effect of COVID-19 on foreign direct investment inflows: stylised facts and some explanations

Moosa

Merza

2022

Futur Bus J

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“…This evidence suggests that FDI inflows into the country are not recovering quickly, which might be because of the uncertainty generated by the crisis regarding the markets. Fu et al ( 2021 ) argue that investors were unwilling to invest in a country where COVID‐19 was spreading rapidly or invest in foreign markets when the home market was experiencing a higher death rate. In this line, Adam et al ( 2020 ) mention that other lockdown policies might increase the economic shock impact when countries seek to exit the present one, and this could negatively affect expectations of restarting economies.…”

Section: Discussionmentioning

confidence: 99%

Short‐term effects of COVID‐19 lockdown on foreign direct investment: Evidence from Ecuadorian firms

Camino‐Mogro

Armijos

2021

J of Intl Development

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We exploit the exogenous variation that comes from the COVID‐19 and the subsequent lockdown in Ecuador. We estimate a regression discontinuity in time (RDiT) design using official administrative FDI data from January to May 2020. We observe an overall large decrease in FDI inflows. We assess differences across FDI sources and find stronger effects coming from capital increases compared with new firm constitutions. In addition, we find that the negative effects are mostly from inflows coming from North and South American investments. We also assess whether partial reopening of activities positively affects FDI. We do not find any significant effect.

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“…Findings are in perfect consonance with a-priori expectations pointing strongly to the established fact that financial crises possess an adverse impact on FDI in host and home countries. A relevant study conducted by Fu et al [ 17 ] provided empirical evidence relating to a global pandemic-fdi nexus. The trio authors more specifically analyze the impact of COVID-19 on FDI margins depending on a global monthly dataset and Heckman two-stage bias selection approach as its econometric technique.…”

Section: Theoretical Literaturementioning

confidence: 99%

Accounting for the symmetric and asymmetric effects of FDI-growth nexus amidst financial crises, economic crises and COVID-19 pandemic: application of hidden co-integration

et al. 2022

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This study investigates the symmetric and asymmetric effects of FDI-growth nexus amidst financial crises, economic crises and COVID-19 pandemic s in Nigeria over the period 1983–2020. Having confirmed the long-run stable state among the variables, the symmetric estimates suggest that the FDI inflow/outflow is significantly linked with economic growth both in the long and short run, while the asymmetric model suggests that the parameter estimates have asymmetric effects on economic growth during the economic crisis in Nigeria. Specifically, the positive shocks in FDI inflow/outflow generate a significant reducing impact on economic growth, while negative shocks in FDI inflow/outflow generate a significant increasing effect on economic growth. Based on this findings, the study suggests that policy option would need to generate more economic activities that would improve net inflow/outflow and cushion the effect of future crisis.

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Does Lockdown Bring Shutdown? Impact of the COVID-19 Pandemic on Foreign Direct Investment

Cited by 43 publications

References 22 publications

The effect of COVID-19 on foreign direct investment inflows: stylised facts and some explanations

The effect of COVID-19 on foreign direct investment inflows: stylised facts and some explanations

Short‐term effects of COVID‐19 lockdown on foreign direct investment: Evidence from Ecuadorian firms

Accounting for the symmetric and asymmetric effects of FDI-growth nexus amidst financial crises, economic crises and COVID-19 pandemic: application of hidden co-integration

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