The Impact of Controls on United States Direct Foreign Investment in the European Economic Community

Scaperlanda, Anthony; Mauer, Laurence Jay

doi:10.2307/1056408

Cited by 16 publications

(8 citation statements)

References 5 publications

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“…This finding contradicts the findings of Kogut (1983), Scaperlanda and Balough (1983) and Scaperlanda (1992). This may due to the substitution effect of the trade activities against the DIA of Singapore.…”

Section: Empirical Results and Discussioncontrasting

confidence: 75%

“…Besides, trade liberalization or trade openness also has great implication on the outward FDI (Kogut, 1983;Scaperlanda and Balough, 1983;Scaperlanda, 1992;Kueh et al, 2008;Kueh et al, 2009). The association of higher degree openness led to higher level of FDI outflow is mainly due to the acquisition of knowledge on the foreign market.…”

Section: Model Specification and Theoretical Justificationmentioning

confidence: 99%

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Macroeconomic Determinants of Direct Investment Abroad of Singapore

Puah

Liew

2014

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Section: Empirical Results and Discussioncontrasting

confidence: 75%

Section: Model Specification and Theoretical Justificationmentioning

confidence: 99%

Macroeconomic Determinants of Direct Investment Abroad of Singapore

Puah

Liew

2014

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“…Higher trade openness should encourage more FDI inflows and vice versa. Scaperlanda and Mauer (1973), Scaperlanda and Balough (1983) and Scaperlanda (1992) showed in their studies that there exists a positive relationship between trade openness and FDI. 4.…”

Section: Macroeconomic Factors/ Determinants Affecting Fdimentioning

confidence: 98%

Foreign Direct Investment and Macroeconomic Factors: Evidence from the Indian Economy

Tripathi

Seth

Bhandari

2015

Asia-Pacific Journal of Management Research and Innovation

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Foreign direct investment (FDI) has boosted financial stability, growth and development in India. There has been positive growth rate in GDP since FDI in India has been allowed. FDI has also acted as the resistor during global financial crisis 2008. Many pull factors in India have attracted FDI which include rapidly expanding consumer market, easy access to other neighbouring countries, accessibility to cheaper basic inputs, well-developed and stable banking system and favourable policies for foreign investors, etc.This article attempts to find out the existence of relationship between FDI and six macroeconomic factors-Exchange rate (` per $), Inflation (WPI), GDP/IIP (proxy for Market size), Interest rate (91 days T-bills), Trade Openness and S&P CNX 500 Equity Index (profitability) using monthly and quarterly data for the period starting from July 1997 to December 2011. Apart from using the standard techniques, such as ADF and PP Unit root stationarity test, Bi-variate and Multi-variate Regression analysis and Granger Causality test, we have also applied advanced econometric techniques such as Johansen's cointegration test, Vector Auto Regression (VAR) and Impulse Response analysis to check for long-run and short-run dynamic relationship.The results show a significant correlation between FDI and all macroeconomic variables (except for Exchange rate). Causality results show that IIP/GDP, WPI and S&P CNX 500 Equity Index are Granger causing FDI inflows in India while Trade Openness is Granger caused by the same. All the macroeconomic variables taken in the article (except exchange rate) are significantly affecting FDI inflows and the overall explanatory power of the regression model (i.e., Adjusted R square) is 75.7 per cent. The results of Johansen's cointegration test disclose that there is long-run causal relation between FDI and IIP; FDI and S&P CNX 500 Equity, FDI and Trade Openness and FDI and WPI. VAR and Impulse response function analysis show that FDI is caused more by its own lagged values rather those of other macroeconomic factors.These results are important for policy makers, regulators and foreign investors. Policy makers and regulators are required to push reform agenda in domestic market for attracting huge FDI inflows in the country. Foreign investors want the policies of the country to be stable and transparent to provide enough safeguard for their investments because instability increases the risk to the foreign investors. Since, we find positive relationship between FDI and profitability, a higher investor's confidence in domestic market acts as a stimulus in getting more FDI inflows.

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“…Various attempts (Scaperlanda and Mauer, 1973;Scaperlanda and Balough, 1983;Maniam and Chatterjee, 1998) have been made to examine the factors that influence the overall flows of FDI into a country. However, these studies have not generally examined the differences in FDI flows between different regions of the same country.…”

Section: Determinants Of Fdimentioning

confidence: 99%

“…However, these studies have not generally examined the differences in FDI flows between different regions of the same country. Among the factors considered have been labour and capital costs, in both host and investing nations (Lucas, 1993), demand for products (Scaperlanda and Mauer, 1973;Scaperlanda and Balough, 1983;Lucas, 1993), capital controls (Scaperlanda and Mauer, 1973;Scaperlanda and Balough, 1983), tariff and other trade barriers (Lunn, 1980;Scaperlanda and Mauer, 1973), exchange rates (Maniam and Chatterjee, 1998), trade balances (Maniam and Chatterjee, 1998), geographical distance from investing nations (Frenkel et al, 2004) and GDP size and growth (Scaperlanda and Mauer, 1973;Lunn, 1980;Maniam and Chatterjee, 1998;Frenkel et al, 2004). These studies have generally taken place at the national level.…”

Section: Determinants Of Fdimentioning

confidence: 99%

Social and cultural factors in FDI flows: evidence from the Indian states

Sathe¹,

Handley-Schachler²

2006

WREMSD

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This study examines the possible cultural factors affecting FDI in different regions of one large emerging economy, namely India, in terms of the varying religious, social and political backgrounds of the different states. Although the effects of culture on business practice have been extensively studied, less research has been published on the effects of culture on international trade and investment. In addition, culture is often narrowly defined in terms of implicit psychological attitudes, with little attention being paid to the effects of explicit cultural features such as religion or to sociological factors such as urbanisation and education levels, which may have a crucial effect on the ability of countries and regions to attract FDI and on the uses to which FDI inflows are put. Our findings indicate that social and explicit cultural variables have a measurable effect on FDI flows, with urbanisation being the most important factor.

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The Impact of Controls on United States Direct Foreign Investment in the European Economic Community

Cited by 16 publications

References 5 publications

Macroeconomic Determinants of Direct Investment Abroad of Singapore

Macroeconomic Determinants of Direct Investment Abroad of Singapore

Foreign Direct Investment and Macroeconomic Factors: Evidence from the Indian Economy

Social and cultural factors in FDI flows: evidence from the Indian states

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