Financial Development and Foreign Direct Investment—The Moderating Role of Quality Institutions

Islam, Mollah Aminul; Khan, Muhammad Asif; Popp, József; Sroka, Włodzimierz; Oláh, Judit

doi:10.3390/su12093556

Cited by 76 publications

(57 citation statements)

References 87 publications

(139 reference statements)

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“…This very matter has also been carefully handled to observe the actual fluctuation in the wealth efficiency. Another study suggested that findings should be robust on the main variables and alternative methodologies to alternative proxies [51]. It has been ensured through using multiple regression models in the study.…”

Section: Generalized Methods Of Moments Analysis For Both Covariance-mentioning

confidence: 99%

The Impact of GDP on Cross-Country Efficiency in Wealth Maximization: a Joint Analysis Through the Stochastic Frontier and Generalized Method of Moments

Rosid¹,

Xuefeng²,

Hossain³

et al. 2021

Advances in Management and Applied Economics

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Wealth maximization is still the principal objective of a corporation and income plays a pivotal role in this regard. Taking this to the country context, wealth maximization can be a more refined objective alongside GDP growth. Considering GDP as the key wealth maximizer for a nation, the present work was undertaken to determine cross-country wealth efficiency and its determinants based on GDP covariates. The relationship between aggregate net wealth and GDP of 106 different countries for a period of 2009 to 2018 were analyzed to estimate annual incremental wealth efficiency based on their GDP covariates using input-output stochastic frontier analysis (SFA). Further, the determinants of incremental wealth efficiency were identified using multiple regression models. The SFA analysis shows significant negative impact of GDP on wealth maximization efficiency, like the law of diminishing marginal return to scales advocates. With the increase of GDP of a country, its marginal efficiency in wealth maximization decreases though aggregate wealth increases. The robust regression models show that imports, broad money and exchange rate undermine the wealth efficiency of a country and country’s past efficiency positively influences the subsequent year’s efficiency. These findings are expected to open new horizons for policymakers in policy analyses. JEL classification numbers: E1, E2, F4 Keywords: Wealth Maximization, GDP, SFA, Technical Efficiency, GMM, Driscoll Kraay.

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Section: Generalized Methods Of Moments Analysis For Both Covariance-mentioning

confidence: 99%

The Impact of GDP on Cross-Country Efficiency in Wealth Maximization: a Joint Analysis Through the Stochastic Frontier and Generalized Method of Moments

Rosid¹,

Xuefeng²,

Hossain³

et al. 2021

Advances in Management and Applied Economics

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show abstract

“…Empirically, different studies have shown the link between financial developments (FD) and trade openness with FDIs. As a demonstration of this, Islam et al (2020); Desbordes and Wei (2017); Havi and Enu (2014) found a positive significant impact of financial development on FDI. On the other hand, Dellis (2018) and Tsaurai and Makina (2018) publicized the inconclusive results about the influence of financial development on FDI.…”

Section: Introductionmentioning

confidence: 90%

The Dynamic Link Between Financial Development, Trade Openness and Foreign Direct Investment: Empirical Evidence from Ethiopia

Tesega¹

2021

APMAJ

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Foreign direct investment (FDI) is an important source of external financing and an important factor for the economic development of a country. FDI is highly important especially for developing countries as it brings modern technologies and management skills in addition to narrowing the financial gaps. In this sense the knowledge of what determines FDI will have a tremendous significance. With the objective of empirically determining the long-run and short-run relationships between financial development, trade openness and FDI inflows in Ethiopia this study employed the ARDL model. The findings indicated that private sector credit, M2 and trade openness have a positive and significant influence on FDI inflows in the long-run while M2, and trade openness has a positive and significant influence on FDI in the short-run too. Current period private sector credit had no impact on FDI while the one period lag of it has a positive significant effect on FDI. Likewise, the causality test results disclose the presence of bi-directional causal relationships between private sector credit and FDI, and between M2 and trade openness. Furthermore, the findings indicate a one direction Granger cause from M2 to FDI. Policy makers are advised to consider trade openness and financial development measures in their quest for more FDI inflow. Keywords: FDI, trade openness, financial development, ARDL, Ethiopia

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“…Foreign direct investment has a significant influence on China's regional economic growth [47]. The research has also shown a significant relationship between FDI and economic growth [48].…”

Section: Foreign Direct Investmentmentioning

confidence: 97%

The Impact of High-Speed Railway on China’s Regional Economic Growth Based on the Perspective of Regional Heterogeneity of Quality of Place

Lin

Dhakal

2021

Sustainability

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Transport enables trade between people, which is essential for the development of civilizations. Transport is a crucial necessity for specialization, allowing production and consumption of products to occur at different locations. High-speed rail (HSR) allows the flow of people between regions, cities, countries. With rapid global development in HSR technology for passenger transportation, it plays a vital role in transportation systems. The improvement of the quality of cities with different emphasis will bring different economic development results. Therefore, exploring the impact of high-speed railways and quality of place on economic development is necessary. This paper takes the prefecture-level city with a high-speed railway opened in 2008–2013 as the research sample and takes other prefecture-level cities in the country as the control group. The study findings revealed that employment, investment in fixed assets, average wage, and higher education institute significantly affect China’s regional economic growth. Institute of higher education reflects the negative effect on the regional economic growth whereas the employment, investment in fixed assets, and average wage rate positively impact it. Based on the results, it can be concluded that China’s regional economy is significantly affected by its quality.

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Financial Development and Foreign Direct Investment—The Moderating Role of Quality Institutions

Cited by 76 publications

References 87 publications

The Impact of GDP on Cross-Country Efficiency in Wealth Maximization: a Joint Analysis Through the Stochastic Frontier and Generalized Method of Moments

The Impact of GDP on Cross-Country Efficiency in Wealth Maximization: a Joint Analysis Through the Stochastic Frontier and Generalized Method of Moments

The Dynamic Link Between Financial Development, Trade Openness and Foreign Direct Investment: Empirical Evidence from Ethiopia

The Impact of High-Speed Railway on China’s Regional Economic Growth Based on the Perspective of Regional Heterogeneity of Quality of Place

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