Sectoral FDI inflows and domestic investments in Pakistan

Shah, Syed Hasanat; Hasnat, Hafsa; Cottrell, Simon; Ahmad, Malik Shoaib

doi:10.1016/j.jpolmod.2019.05.007

Cited by 32 publications

(32 citation statements)

References 33 publications

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“…Second, in the sectoral level analysis, this study could reconfirm the crowd-in effect of FDI on domestic investment only in the "non-oil and gas" sectors in Myanmar. This outcome is in line with the evidence in Pakistan provided by Shah et al (2020), and is also consistent with the arguments on Myanmar's case presented by Bissinger (2012) and Taguchi and Ni Lar (2015). Thus this study could endorse the previous studies' arguments through empirical tests in Myanmar.…”

Section: Interpretations Of Estimation Outcomessupporting

confidence: 92%

“…Concerning the sectoral-level analyses, Aykut and Sayek (2007), using cross-country data, revealed that FDI had a positive effect on economic growth as the share of the manufacturing sector in FDI flows increase, while having a negative effect as the share of primary and services sector in FDI increases. Shah et al (2020), examining the case of Pakistan, found that FDI in manufacturing and services sectors, but not in primary sector, crowded in domestic investment.…”

Section: Literature Review and Contributionmentioning

confidence: 99%

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Economic Effects of Inward Foreign Direct Investment in Myanmar

Soe¹

2020

Bulletin of Applied Economics

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This paper aims to examine the effects of inward foreign direct investment (FDI) on economic growth and domestic investment at the regional-level and sectoral-levels of Myanmar economy, by applying a panel vector-autoregressive model framework. The major research questions are twofold: whether inward FDI causes economic growth or economic growth attracts inward FDI, and whether inward FDI crowds in or crowds out domestic investment. The main findings are summarized as follows. In the regional level analysis, there is a difference in the FDI-economic growth relationship between the FDI-intensive region and the FDI-less-intensive one. In the FDI-intensive region, the bidirectional FDI-economic growth relationship is found, supporting the both hypotheses of FDI-driven growth and growth-driven FDI, while the FDI-driven growth effect is larger than the growth-driven FDI one. In the FDI-less-intensive region, on the other hand, FDI deteriorates economic growth whereas economic growth still induces FDI. The difference in the FDI-economic growth relationship between the regions might come from the gap in agglomeration effects. In the sectoral level analysis, the crowd-in effect of FDI on domestic investment is found in the non-oil and gas sectors, since the FDI in the oil and gas sector has less linkages to domestic investment.

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Section: Interpretations Of Estimation Outcomessupporting

confidence: 92%

Section: Literature Review and Contributionmentioning

confidence: 99%

Economic Effects of Inward Foreign Direct Investment in Myanmar

Soe¹

2020

Bulletin of Applied Economics

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“…Another important aspect that we tackle in this study is the bifurcation of domestic capital into public and private capital formation for developed and emerging economies. The neo-classical and the Keynesian approaches are different regarding the nature of public and private capital formations [15,16]. The neo-classical outlook supports private capital and assumes that private capital is the main force that increases efficiency, stimulates creativity, and promotes diversity.…”

Section: Introductionmentioning

confidence: 99%

“…However, the Keynesian outlook refutes this argument. It suggests that public capital formation paves the way for effective utilization of private capital and, thus, public and private capital augment one other [1,15,16].…”

Section: Introductionmentioning

confidence: 99%

The Impact of OFDI and Institutional Quality on Domestic Capital Formation at the Disaggregated Level: Evidence for Developed and Emerging Countries

Ameer

Sohag

et al. 2020

Sustainability

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In this study, we investigate whether outbound foreign direct investment (OFDI) either augments or impedes domestic public and private investment, incorporating the role of institutional quality into the context of developed and emerging countries. To this end, we apply a cross-sectional-autoregressive-distributed lag (CS-ARDL) approach to analyze panel data from the period 1996–2017. Our empirical findings suggest that OFDI augments private capital formation for developed countries. Institutional quality (IQ) is found to be a driving factor that promotes private capital formation in the established economies of developed countries. However, OFDI has a negative association with the public capital formation in the established economies of developed countries, while IQ has a positive association with it. In the context of emerging economies, OFDI is found to be too insignificant to have an effect on private and public capital formation. Interestingly, IQ has a detrimental effect on both private and public capital formation in emerging economies. Our findings are robust. The empirical findings of this study imply that institutional quality should continue to be improved in developed countries, while it should surpass a certain threshold for emerging economies to promote domestic capital formation.

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“…The emerging economies have a significant impact on foreign investment on their domestic investment levels as indicated by Shah, et al (2019). As a part of foreign investment, Foreign Direct Investment (FDI) assists emerging economies with providing a significant impact on different macroeconomic variables and institutional variables in it as analyzed by Uddin, et al (2019).…”

Section: Introductionmentioning

confidence: 99%

Gross National Income Growth and Foreign Direct Investment: Causation in the presence of Crisis in India

Chowdhury¹

2019

IJITEE

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Gross National Income (GNI) of an economy explicates the standard of living of the population residing in a country. The growth in GNI indicates a successful development for a nation. In this paper, an interrelation between GNI growth and Foreign Direct Investment (FDI) has been discussed in the presence of Indian economic crisis by implementing the Auto Regressive Distributed Lag (ARDL) Modelling approach. The data are ranging from the time of 1991 to 2017. The relationship is judged at the background of economic liberalization of India. The result shows that there exists a long-run impact of FDI on GNI growth. The existence of cointegration further necessitates the existence of short-run causality. In the short run, GNI growth Granger causes FDI. This proves that the model is significant for discussion both for the long and short run. The error correction term signifies that there exists a ninety-seven percent chance of the model to move back to its long-run equilibrium from short-run shocks. The reliability and stability of the whole model are judged by implementing CUCUM and CUSUMQ test. Finally, in conclusion, the model chosen for the study has indicated a few policy implications required for enhancing the GNI growth of India to fight back the situation of crisis.

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Sectoral FDI inflows and domestic investments in Pakistan

Cited by 32 publications

References 33 publications

Economic Effects of Inward Foreign Direct Investment in Myanmar

Economic Effects of Inward Foreign Direct Investment in Myanmar

The Impact of OFDI and Institutional Quality on Domestic Capital Formation at the Disaggregated Level: Evidence for Developed and Emerging Countries

Gross National Income Growth and Foreign Direct Investment: Causation in the presence of Crisis in India

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