Fire‐sale <scp>FDI</scp>? The Impact of Financial Crises on Foreign Direct Investment

Stoddard, Olga; Noy, Ilan

doi:10.1111/rode.12149

Cited by 41 publications

(26 citation statements)

References 46 publications

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“…Furthermore, the R-square shows that the explanatory power of the model is about 50-61%. Overall, the results are in line with the submission of Stoddard and Noy (2015) who show that banking crisis and debt crisis has a negative impact on FDI inflows. This means that health or financial crisis increases FDI outflows in the economy.…”

Section: Data Sources and Variables Descriptionssupporting

confidence: 87%

“…Since the study relies on cross-sectional averaged data, Ordinary least square (OLS) is used for the study to follow the extant literature (Andrés, 2006;Kodila-Tedika & Asongu, 2015;Asongu et al, 2019). Following the study of Stoddard and Noy (2015), Dornean and Oanea (2015), equation 1expresses the relationship between FDI outflows and COVID-19 variables including control variables.…”

Section: Ordinary Least Squarementioning

confidence: 99%

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Covid-19 Pandemic and Outward Foreign Direct Investment: A Preliminary Note

Ajide

Osinubi

2020

Economics

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Social-distance policy of most governments and the pandemic impact of corona virus (COVID-19) on human health are expected to shutter international investment and business environment. However, there is little or no study to show the early empirical evidence on this relationship, most especially its impacts on FDI flows in the economies. This note provides a preliminary evidence of the impact of COVID-19 on FDI outflows. Our data cover cross-sectional first quarter, average data; between 1 January – 31 March, 2020 from 43 countries. Using Ordinary least square (OLS) and Quantile regressions, we document that there is a positive relationship between COVID-19 confirmed cases and FDI outflows. In addition, there is a positive impact of COVID-19 related confirmed deaths on FDI outflows across all quartiles estimations. This means that COVID-19 pandemic fuels the foreign direct investment outflows. The major causes could be the reduction in the ability of firms to invest due to a shortage in the number of skilled employees because they care for their health safety, a decline in corporate profits and increase in cost of finance. In addition, the propensities to invest have been widely affected negatively in most economies. These factors also become obvious when most economies experience a very high level of risk perception in financial market.

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Section: Data Sources and Variables Descriptionssupporting

confidence: 87%

Section: Ordinary Least Squarementioning

confidence: 99%

Covid-19 Pandemic and Outward Foreign Direct Investment: A Preliminary Note

Ajide

Osinubi

2020

Economics

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“…The findings indicate that economic actors delay private investment overseas until some degree of uncertainty around election outcomes is addressed. The magnitudes of the reductions in FDI flows are considerably greater than the impacts of policy uncertainty on domestic investment, indicating that foreign capital flows are more susceptible to policy uncertainty [55]. A similar line of results was found in the study of Chen, et al [56].…”

Section: Effects Of Economic Policy Uncertaintysupporting

confidence: 79%

Nexus between Economic Policy Uncertainty and Renewable Energy Consumption in BRIC Nations: The Mediating Role of Foreign Direct Investment and Financial Development

et al. 2021

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In recent literature, the impact of economic policy uncertainty (EPU) on macro aspects have been investigated, but the aspect of energy, precisely renewable energy still to explore. The motivation of the study is to produce fresh evidence regarding the nexus between EPU and renewable energy consumption (REC) with the mediating role of forcing direct investment (FDI) and financial development (FD) in BRIC nations for the period 1997q1–2018q4. The study applied unit root tests following Ng-Perron and Zivot and Andrews for detecting variable’s stationary properties. The long-run cointegration was evaluated by implementing Bayer, Hanck combined the cointegration test, Bound testing approach, and tBDM test. Both linear and non-linear ARDL were implemented to evaluate long-run and short-run shocks, and directional causality was assessed through a non-granger causality test. Furthermore, the study implemented robustness by implementing fully-modified OLS, dynamic OLS, and canonical cointegrating regression (CCR). Unit root test established the variables are stationary after the first difference; moreover, the Bayer and Hanck cointegration test confirmed the long-run association between EPU, FD, FD, and REC in BRIC nations. Accruing to ARDL estimation, adverse effects running from EPU to REC both in the long run and short run. Furthermore, the positive statistically significant linkage revealed for FDI and FD to REC implies that clean energy integration could be augmented with continual inflows of FDI and development of the financial sector. Model estimation with asymmetric assumption, the study documented asymmetric effects running from EPU, FDI, and FD to renewable energy consumption, especially in the long run. Finally, the directional causality revealed unidirectional causality between REC and EPU, whereas the feedback hypothesis was disclosed for FDI and REC] and FD and REC. Study findings postulated that the role of foreign direct investment and financial development is critically significant because technological advancement and capital investment augment clean energy integration through the application of renewable energy.

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“…It is success owes not only capital functions but also the capital market forces (Pan et al, 2015). Also South and eastern Asia reached over 1.4 × 10 12 USD of FDI, which is the leader region in the world (Stoddard and Noy, 2015) and reaches large volumes of international trade (Liu and Ng, 2010). Western Europe may be called a pentagonal system (Kincses et al, 2013) and eastern Asia with all world cities ranked alpha++ and alpha+ (except Dubai).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Permanence of economic potential of cities based on sector development

Raźniak¹,

Dorocki²,

Winiarczyk-Raźniak³

2017

Chin. Geogr. Sci.

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The paper attempts to answer the following key question: how will a city′s world rank change in the face of crisis in its main economic sector? Crisis is defined here as a decline in financial performance in the given sector, which leads to the decline of its constituent firms and corporations on the world economic scene. The World Economic Center Index (WECI) has been created in order to rank cities based on the value of their resident corporations by sector and show their level of stability upon the removal of the most important sector. This provides information on the potential of each analyzed city as well as on its advanced features or area of specialization. Research has shown that nearly half the World Economic Centers are dominated by the financial and materials sectors of the economy. Different sectors dominate different regions of the world. For example, consumer staples and materials were dominant in North America, while information technology and financials were dominant in Europe. In Asia, several sectors tend to dominate the economy. Research has shown that the ability of a principal economic sector to resist economic crisis largely depends on the strength of the command and control function of a city. Finally, a high globalization level of a city is a key determinant of its susceptibility to economic crisis.

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Fire‐sale FDI? The Impact of Financial Crises on Foreign Direct Investment

Cited by 41 publications

References 46 publications

Covid-19 Pandemic and Outward Foreign Direct Investment: A Preliminary Note

Covid-19 Pandemic and Outward Foreign Direct Investment: A Preliminary Note

Nexus between Economic Policy Uncertainty and Renewable Energy Consumption in BRIC Nations: The Mediating Role of Foreign Direct Investment and Financial Development

Permanence of economic potential of cities based on sector development

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