Foreign Direct Investment and Trade Openness in Sub‐Saharan Economies: A Panel Data Granger Causality Analysis

Seyoum, Mebratu; Wu, Renshui; Lin, Jingdong

doi:10.1111/saje.12022

Cited by 42 publications

(19 citation statements)

References 42 publications

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“…Finally, they suggest developing infrastructure facilities in African countries to attract more foreign investors. Seyoum et al (2014) examined the Granger causality relations between foreign direct investment and trade openness in Sub-Saharan economies using Panel data for 25 sub-Saharan African economies over the period 1977-2009. The results indicated that a bidirectional causality relation was identified between trade openness and foreign direct investment in Sub-Saharan economies.…”

Section: Literature Reviewmentioning

confidence: 99%

Causal Links between Trade Openness and Foreign Direct Investment in Romania

Mudiyanselage¹,

Epuran²,

Tescașiu³

2021

JRFM

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In this increasingly globalized era, foreign direct investments are considered to be one of the most important sources of external financing for all countries. This paper investigates the causal relationship between trade openness and foreign direct investment (FDI) inflows in Romania during the period 1997–2019. Throughout this study, Trade Openness is the main independent variable, and Gross Domestic Product (GDP), Real Effective Exchange Rate (EXR), Inflation (INF), and Education (EDU) act as control variables for investigating the relationships between trade openness (TOP) and FDI inflow in Romania. The Auto Regressive Distributed Lag (ARDL) Bounds test procedure was adopted to achieve the above-mentioned objective. Trade openness has negative and statistically significant long-run and short-run relationships with FDI inflows in Romania throughout the period. Trade openness negatively affects the FDI inflow, which suggest that the higher the level of openness is, the less likely it is that FDI will be attracted in the long run. The result of the Granger causality test indicated that Romania has a unidirectional relationship between trade openness and FDI. It also showed that the direction of causality ran from FDI to trade openness.

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Section: Literature Reviewmentioning

confidence: 99%

Causal Links between Trade Openness and Foreign Direct Investment in Romania

Mudiyanselage¹,

Epuran²,

Tescașiu³

2021

JRFM

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“…Additional evidence on the interaction between insurance sector activities, banking sector activities and economic growth is provided by carrying out the Emirmahmutoglu and Kose (2011) panel causality test with bootstrapping. This test is the most suitable for our study since it does not require stationarity for all the series in the underlying VAR system and may be applied to panels comprising of stationary, non-stationary, cointegrated and non-cointegrated series (Seyoum et al, 2014). The test is also valid in the presence of cross-sectional dependence.…”

Section: Bootstrap Panel Granger Causalitymentioning

confidence: 99%

The synergistic effect of insurance and banking sector activities on economic growth in Africa

2018

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Highlights• We evaluate the synergistic effect of financial sectors on economic growth in African countries.• The insurance-banking-growth nexus is examined through bootstrap panel causality tests.• The relationship between insurance and banking is a complimentary one and their synergistic impact on growth is positive.• The feedback hypothesis is confirmed in the relationship between finance and growth. AbstractIt is widely understood that the insurance and banking sectors of every economy perform some functions in driving economic growth. What is not yet well documented is whether their roles are complimentary or substitutive. With the aid of the dynamic panel-GMM estimation technique, this paper evaluates the synergistic effect of both sectors on economic growth in a panel of 11 African countries that are responsible for most of the activities in the continent's financial sector. The insurance-banking-growth nexus was also examined through panel causality tests. The resultsshow that life insurance market and the banking sector are complimentary and that the non-life insurance market and the banking sector are also complimentary. We find that overall, the relationship between the insurance and banking sectors in Africa is a complimentary one and that their synergistic impact on economic growth is positive. The feedback hypothesis was also confirmed in the relationship between the insurance sector and economic growth and between the banking sector and economic growth.

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“…Trade openness is defined as the ratio of the sum of imports and exports to GDP. Trade openness as an important determinant of the FDI is confirmed by a number of recent studies covering developing and post-communist economies (Tintin, 2013;Seyoum et al, 2014;Thangavelu and Narjoko, 2014). Similarly, other studies (Culem, 1988;Mina, 2007;Antras and Caballero, 2009;Kechagia and Metaxa, 2018) found that higher levels of trade openness attract FDI in a wide variety of developing and developed economies.…”

Section: Ror and Fdi: Analysis And Discussionmentioning

confidence: 70%

Return to Capital and Foreign Direct Investment: A Cross-Country Perspective

Vahaly¹,

Chou²,

Izyumov³

2018

IJBSS

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Using newly available data, the paper estimates aggregate macroeconomic rates of return (ROR) for 109 countries divided into highly developed (HDC), less developed (LDC), and transition economy (TEC) groups. We then analyze the connection between the ROR and crosscountry capital flows as measured by foreign direct investment (FDI). For the period of 1994-2014, we find statistically significant links between all measures of ROR and inflows of FDI associated with the prevalence of "downhill" capital flows across the world.

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Foreign Direct Investment and Trade Openness in Sub‐Saharan Economies: A Panel Data Granger Causality Analysis

Cited by 42 publications

References 42 publications

Causal Links between Trade Openness and Foreign Direct Investment in Romania

Causal Links between Trade Openness and Foreign Direct Investment in Romania

The synergistic effect of insurance and banking sector activities on economic growth in Africa

Return to Capital and Foreign Direct Investment: A Cross-Country Perspective

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