Exploring the Trend of Czech FDIs and their Effect to Institutional Environment

Purpose: The study examines the impact of institutional quality on Foreign Direct Investment (FDI) inflows for emerging economies from South Asiain the period 2002-2016. Other economic factors such as globalisation, financial development, and GDP are also considered. Design/Methodology/Approach: The study uses Im-Pesaran-Shin (IPS) panel unit root test to check stationarity property. It uses cross dependency (CD) and cross-sectional augments IPS tests to check cross-sectional dependency and heterogeneity across the group countries. Next, it uses panel ARDL-PMG tests to check the existence of long-relationship among variables. Then, we apply the panel Granger causality test to check the direction of causality. Finally, for the robustness of results, we use the Pedroni co-integration technique. Findings: The study finds the existence of a long-run relationship between institutional quality and FDI inflows. Other economic factors such as globalization and financial development show long-run and strong causality with FDI inflows. However, the short-run unidirectional causality from institutional quality to FDI inflows is not found for all the countries. Finally, institutional quality strongly causes FDI inflows provided paired with either globalisation or financial development. Practical Implications: Institutional quality increases the FDI inflows. Therefore, policymakers should focus on institutional quality along with globalization and financial development for higher inflows of FDI in emerging countries. Originality/Value: The study considers institutional quality as one of the inputs for FDI inflows in selected emerging economies from South Asia. Further, it creates an institutional quality index for the emerging countries to examine the impact on FDI inflows.

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Institutional Quality and Foreign Direct Investment Inflows: Evidence from Cross-country Data with Policy Implication

Behera¹,

Bikash²,

Biswashree³

et al. 2020

“…Daude and Fratzscher (2008) affirmed the importance of strong regulatory institutions as a prerequisite for host nations to be able to attract FPI inflows. In a similar vein, the same would apply in the case of FDI inflows, as Jindřichovská et al (2020) concluded. According to them, the quality of institutions in a country is important to attract foreign capital flows.…”

Section: Discussion Of Findingsmentioning

confidence: 72%

Foreign Portfolio Investments, Exchange Rates and Capital Openness: A Panel Data Approach

Patrícia¹

2020

The aim of this paper is to examine the effect of real exchange rate and capital openness on foreign portfolio investments, using a panel of nine African countries, after the global financial crisis in the period 2009-2016. Design/Methodology/Approach: We adopted a panel data approach, and more specifically data was analysed using the Fixed Effects model. The economic data was sourced from the World Bank database of development indicators, while we used Chinn and Ito's database for capital openness. Findings: Building on from the international finance and portfolio behaviour theories, the results show that real exchange rates, capital openness and the rate of inflation have a negative relationship with FPI inflows. On the contrary, the lag of FPI, institutional quality, real economic growth rate and stock market development attract inward FPI, as portrayed in the positive relationship between the dependent and independent variables. Practical Implications: In accordance with these findings, we find that, host countries' governments that adopted fiscal and monetary policies can ensure macroeconomic stability, and a prudently managed exchange rate through incentivising exports and discouraging imports into the host country, to attract inward FPI flows. Originality/Value: The study confirms the theoretical and empirical underpinnings that there is a negative relationship between foreign portfolio investment, and real exchange rates and capital openness, respectively in most developing countries, and African economies are no different.

“…Krajewski (2014) notes, that the innovative potential of EE countries is still unsatisfactory and weak, with the exception of Slovenia and Estonia. Structural features of the economies of EE countries that determine innovative potential are a large share of employment in the agricultural sector, a low share of services in GDP, major portion of the so-called problem sectors of the economy, weak financial sector, low level of technical infrastructure development (Jindrichovska et al, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

Innovative Potential in European Countries: Analytical and Legal Aspects

Kubiv¹,

Bobro²,

Lopushnyak³

et al. 2020

Purpose: This paper aims to assess the innovation potential of Eastern European economies based on country's ability to export high-tech goods and services, which means innovating beyond the country's needs. Design/Methodology/Approach: We use analytical economic methodology to explore innovative potential of EE (Eastern Europe) countries as correlation-regression analysis. Findings: The study found that the innovative potential of the economy of EE (Eastern Europe) countries depends on the state's expenditures on innovative research and development, the number of scientists and the level of financing for technical cooperation. Practical Implications: The negative factors that influence the formation of innovative potential are identified. The use of intellectual property rights by EE countries is inefficient and does not ensure the development of innovative potential. Patents for research and development of residents as well as non-residents do not ensure the progress and effectiveness of the innovative potential of the economy. The export of ICT services negatively affects innovative potential, however it is not a significant factor influencing innovative activity. Originality/Value: With this article we show that financing technical cooperation in EE countries does not lead to the development of innovative potential, that is, it is inefficient.