Domestic Investment and Fdi in Developing Countries: The Missing Link

Lautier, Marc; Moreaub, François

doi:10.35866/caujed.2012.37.3.001

Cited by 63 publications

(44 citation statements)

References 30 publications

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“…Other studies, for example, Mankiw, Romer, and Weil (1992); Kormendi and Meguire (1985); Levine and Renelt (1992); and Islam (1996), reach similar conclusion that gross domestic investment as a share of GDP has a significant positive effect on growth. More recently, Lauthier and Moreaub (2012) examined the relationship between domestic investment and foreign direct investment (FDI), and found that FDI follows domestic investment. 2 The major drawback to these studies is that they do not test for causality, at least in the Granger sense.…”

Section: A Brief Review Of Empirical Literaturementioning

confidence: 99%

The relation between capital formation and economic growth: evidence from sub-Saharan African countries

Uneze

2013

Journal of Economic Policy Reform

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This paper examines the causal relationship between capital formation and economic growth in Sub-Saharan African countries using recent panel cointegration and causality testing techniques. We find that causality is bi-directional, suggesting that higher economic growth leads to higher capital formation and that in turn, increases in capital formation results in higher economic growth. These results hold irrespective of whether capital formation is measured with private fixed capital formation or by gross capital formation.

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Section: A Brief Review Of Empirical Literaturementioning

confidence: 99%

The relation between capital formation and economic growth: evidence from sub-Saharan African countries

Uneze

2013

Journal of Economic Policy Reform

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“…This can be explained by considering that as the country's market size is mirrored by the potential of greater demand in the economy and as a consequence there is greater acquisitive FDI, to meet the changed circumstances of the economy. To examine the impact of the FDI-market seeking hypothesis, we used the traditional proxy for the market size which is the real GDP annual growth rate (Faeth, 2009;Hossain & Mitra, 2013, Cavallari & Addona, 2013, Lautier & Moreaub, 2012.…”

Section: Model and Theoretical Backgroundmentioning

confidence: 99%

Foreign direct investment inflows to Malaysia: Do macroeconomic policies matter?

Awad¹

2020

Journal of International Studies

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Malaysia plans to become a high-income economy in the coming years via what is called the ETP (Economic Transformation Program). To achieve this, Malaysia requires a sufficient level of foreign capital and thus is implementing appropriate investment initiatives to stimulate economic activity. So far, Malaysia has only been able to attract a small number of foreign investors. With a relatively small amount of FDI flowing into the country, the expectations of the Economic Transformation Program (ETP) that heavily rely on FDI may be challenged. The current paper analyses how selected macroeconomic factors might impact the flow of FDI into Malaysia. The ARDL (Auto-Regressive Distributed Lag) technique was used together with the VAR (Vector Autoregressive Model) on annual data (1970-2017). The study has found that over time, appreciation of the local currency, openness, inflation and labour cost had a significant negative impact on the inward flow of FDI. Conversely, over the longer term, real interest rate and GDP growth produced substantial positive effects on FDI. The findings suggest that when aiming to create an attractive for FDI environment, it is necessary for governments to closely consider macroeconomic policies that lower both production and transaction costs of multinational enterprises.

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“…Furthermore, uncertainty and high volatility of bilateral aid affect private investment negatively. Lautier and Moreaub (2012) address the effect of domestic investment on FDI flows in developing countries. They conclude that domestic investment is a strong predictor of FDI because multinational corporations view it positively.…”

Section: Literature Reviewmentioning

confidence: 99%

Comparing Africa, Asia and Latin America/Caribbean countries using per capita GDP, remittances, openness, capital/labor ratios and freedom

Collins

Nissan

2014

J Econ Finan

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The focus of this paper is to evaluate similarities and differences between and within three regions: Africa, Asia, and Latin America/Caribbean. The five variables used (per capita GDP, remittances, openness, capital/labor ratio and freedom) broadly classify economic growth in these regions. For each of the five variables the null hypothesis is that the means of the three regions are equal. One-way analysis of variances is the tool of choice. Furthermore, the full samples are employed to test equality of the means between the three regions and all regions. The results show substantial gaps between the groups as well as factors under consideration.

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Domestic Investment and Fdi in Developing Countries: The Missing Link

Cited by 63 publications

References 30 publications

The relation between capital formation and economic growth: evidence from sub-Saharan African countries

The relation between capital formation and economic growth: evidence from sub-Saharan African countries

Foreign direct investment inflows to Malaysia: Do macroeconomic policies matter?

Comparing Africa, Asia and Latin America/Caribbean countries using per capita GDP, remittances, openness, capital/labor ratios and freedom

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