FDI determinants: Kenya and Malaysia compared

Kinuthia, Bethuel Kinyanjui; Murshed, Syed Mansoob

doi:10.1016/j.jpolmod.2015.01.013

Cited by 52 publications

(71 citation statements)

References 31 publications

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“…The Clemente‐Montanes‐Reyes (CMR) approach has two models: an additive outlier model (AO) which captures a sudden change in the mean of a time series, and an innovative outlier model (IO) which allows for a gradual shift in the mean of the series of the model. We employed the CMR‐IO test, which is considered superior to the AO model since it can identify the long‐run impact of changes (Kinuthia and Murshed, ). Stationarity test results are presented in Table .…”

Section: Econometric Analysismentioning

confidence: 99%

Fiscal Policy and Capital Flight in Kenya

Muchai¹,

Muchai²

2016

African Development Review

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Capital flight has been an issue of concern for Africa because it reduces the continent's much needed investible funds. In Kenya, the country lost US$ 4.9 billion in real terms from 1970 to 2010 through capital flight. This study seeks to provide fiscal evidence of capital flight in Kenya. The results establish that past capital flight, change in debt, and government expenditure have no significant impact on capital flight in Kenya. However, external debt, taxation, and expenditure practices under different political regimes have significant effects on capital flight. The study discusses policy implications emerging from the empirical results.

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Section: Econometric Analysismentioning

confidence: 99%

Fiscal Policy and Capital Flight in Kenya

Muchai¹,

Muchai²

2016

African Development Review

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“…The banking sector also has grown considerably as evidenced from their increased levels of asset, capital, and deposit accumulation and increased bank credit to private sector leverages. In addition, the liberalized economy has perhaps attracted foreign direct investments (FDIs) which have remarkably instituted capital accumulation, expanded trade to global borders, increased information and communication technologies (ICT) development, and facilitated technological inflows and spillovers to boost the domestic credit and balance of payments (Kinuthia & Murshed, 2015;Odhiambo, 2009a).…”

Section: Introductionmentioning

confidence: 99%

The Asymmetric Influence of Financial Development on Economic Growth in Kenya: Evidence From NARDL

et al. 2020

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This study analyzed the asymmetric effects of financial development on economic growth using a model augmented with inflation and government expenditure asymmetries to inform model specification. The research question used entails, Do their asymmetry changes significantly influence growth? Using the nonlinear auto-regressive distributive lag (NARDL), the most significant results posit that positive shocks in financial development in the short run and its negative shocks in the long run increase and decrease economic growth, respectively. Regarding inflation, its positive (negative) shocks in both runs, respectively, reduce (increase) economic growth. In comparison, positive shocks in financial development that spur growth in the short run and negative shocks in financial development (government expenditure) that increase (reduce) growth are the most domineering effects as the rest of the shocks insignificantly affect growth. Results clearly demonstrate to an environment steered by stable and sustainable inflation that regulated government expenditure and comprehensive financial system deepening would positively cause economic growth. Therefore, appropriate policies that favor low inflation and reduced government spending, expansion of feasibly reformed financial institutions, capital accumulation, and increased resource mobilization should be instituted if real growth is to positively happen.

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“…Therefore, this study applis panel co-integration and DOLS estimator to solve the endogeneity problem and examine the long run relationship between variables. Panel cointegration approach has been used in many studies that examined the relationship between FDI and economic growth (Mohamed, Singh, Singh & Liew 2013;Omri & Kahouli 2013;Iamsiraroj & Ulubaşoğlu 2015), as well as studies which determined the FDI determinants (Oladipo 2010;Bekhet & Raed Walid Al-Smadi 2014;Kinuthia & Murshed 2015;Dondashe & Phiri 2018). However, to the best of our knowledge, no studies have applied co-integration and DOLS to examine the relationship between IFRS adoption and FDI inflows.…”

Section: Introductionmentioning

confidence: 99%

Causal Relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI): A Panel Data Analysis of ASEAN Countries

Yousefinejad

Ahmad

Salleh

et al. 2018

AJAG

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This study investigates the causal relationship between International Financial Reporting Standard (IFRS) adoption and Foreign Direct Investment (FDI) inflows in ASEAN countries during the period of 2001 to 2016. This study applies panel co-integration and causality test to examine the short and long run and causal relationship between variables. IFRS adoption was measured based on dummy variable in Model 1 and level of IFRS compliance in Model 2. Findings of this study confirm the presence of co-integration between variables and the Dynamic Ordinary Least Square (DOLS) estimation analysis reveals positive and significant relationship between IFRS adoption, based on both measures and FDI inflows. Furthermore, the causality test shows that there is short run causality from IFRS to FDI inflows and long run causality between variables. This study extends knowledge on the relationship between IFRS adoption and FDI inflows by examining this relationship in the setting of ASEAN countries. Findings of this study could be useful for countries which are IFRS adopter and also non-adopters to understand the economic consequences of IFRS adoption, in their effort to attract more investors so as to accelerate economic growth.

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FDI determinants: Kenya and Malaysia compared

Cited by 52 publications

References 31 publications

Fiscal Policy and Capital Flight in Kenya

Fiscal Policy and Capital Flight in Kenya

The Asymmetric Influence of Financial Development on Economic Growth in Kenya: Evidence From NARDL

Causal Relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI): A Panel Data Analysis of ASEAN Countries

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