To see the other types of publications on this topic, follow the link: FDI, institutions.
Journal articles on the topic 'FDI, institutions'
Create a spot-on reference in APA, MLA, Chicago, Harvard, and other styles
Consult the top 50 journal articles for your research on the topic 'FDI, institutions.'
Next to every source in the list of references, there is an 'Add to bibliography' button. Press on it, and we will generate automatically the bibliographic reference to the chosen work in the citation style you need: APA, MLA, Harvard, Chicago, Vancouver, etc.
You can also download the full text of the academic publication as pdf and read online its abstract whenever available in the metadata.
Browse journal articles on a wide variety of disciplines and organise your bibliography correctly.
1
Qu, Yi, and Yingqi Wei. "The Role of Domestic Institutions and FDI on Innovation—Evidence from Chinese Firms." Asian Economic Papers 16, no. 2 (June 2017): 55–76. http://dx.doi.org/10.1162/asep_a_00519.
Full textAbstract:
This paper investigates the enabling factors of domestic institutions and foreign direct investment (FDI) on firm innovation in China. China has made significant institutional changes and has attracted substantial FDI, aiming to facilitate domestic innovation. Drawing on the institution-based view, we investigate how domestic institutions and FDI affect firm innovation. The results from a comparative case study of five Chinese firms and a large-sample econometric analysis based on Chinese firms reveal the positive impact of domestic institutions on innovation, but FDI is shown to have negligible effects. We argue that, given China's institutional setting, FDI may be a channel for technology transfer but this does not necessarily lead to innovation.
2
Drapkin, Igor, Sergey Lukyanov, and Vadim Shelkovnikov. "The institutional determinants of outward foreign direct investment." Acta Oeconomica 72, no. 3 (September 21, 2022): 309–28. http://dx.doi.org/10.1556/032.2022.00024.
Full textAbstract:
Abstract This study focuses on the influence of institution quality on foreign direct investment (FDI) outflows. For empirical estimation, we use a dataset covering 102 home and 67 host countries from 2001 to 2016. We use the gravity approach and apply the Poisson pseudo maximum likelihood method to derive unbiased estimates. A set of institutional variables in a country is integrated into a single institutional index using principal component analysis. Our main findings are the following. First, we only identify a positive influence of the level of institutional development on FDI outflows for the institutionally developed countries. Second, we have not found evidence for crowding out national investment in the countries with weak institutions. Third, increases in the level of institutions stimulate horizontal rather than vertical outward FDI in an economy. Finally, institutional distance negatively affects the level of outward FDI only when the institutional distance between the two countries is large. The policy implications of this research are strongly in favour of further developing institutions.
3
Silajdzic, Sabina, and Eldin Mehic. "Institutions and Foreign Direct Investment: What Role for Investment Policy in Southeast Europe?" South East European Journal of Economics and Business 17, no. 1 (June 1, 2022): 30–53. http://dx.doi.org/10.2478/jeb-2022-0003.
Full textAbstract:
Abstract Institutions are generally perceived as an important determinant of Foreign Direct Investment (FDI). Which institutions matter and why for FDI, remains however one of prominent questions in public policy debate amid complexities related to different institutional dimensions, and incomplete or even vague understanding of underlying mechanism(s) at work. In this paper we account for these ambiguities, and focus on institutions that reveal government efforts to design proper institutional and policy framework to attract FDI, as opposed to considering institutions in broader sense. Specifically, we contribute to FDI policy debate by analysing the impact of institutions measuring Investment policy and promotion on inward FDI flows in South East Europe (SEE). To this end we use a unique dataset that is comprised of specific, FDI related institutional indicators developed and published by the OECD. The results of this empirical investigation deeper our understanding on whether differences in FDI policies and institutional set-up across South East European (SEE) countries explain variations in inward FDI flows relaying on bilateral FDI flows and the gravity modelling technique. We bring novel evidence that investment policy efforts seemingly do pay off, highlighting the importance of progress and reforms embodied not only in FDI regulation, but also in FDI policy variables including FDI Promotion and Facilitation, Transparency, Privatisation policy and Public Private Partnership in attracting FDI in SEE. The analysed institutional effect properly accounts for the possible time-variant and context-dependant effect of institutions. The suggested importance of FDI policy variables seem valuable in terms of general FDI policy issues and trade-offs.
4
Hananya, Kezya Agustina, and Rossanto Dwi Handoyo. "The Influence of Institutional Quality towards Foreign Direct Investment (FDI) Inflows in ASEAN’s Developing Countries." Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan 22, no. 2 (December 31, 2021): 161–80. http://dx.doi.org/10.23917/jep.v22i2.13752.
Full textAbstract:
This paper discusses the influence of institutional quality on FDI stock inflows towards eight developing countries in Association of Southeast Asian Nations (ASEAN). Institution in this paper is classified in four forms, namely legal, bureaucratic, politics, and economic institutions. This paper utilizes the method of Principal Component Analysis (PCA) and panel data regression. After using PCA method to identify which variables hold the most importance, the authors then constructed an individual index for four institutions as defined before. These indices are then used for panel data regression. The result of this paper indicates that out of four forms of institutions, three institutions are found to be significant determinants. These three institutions are legal, bureaucratic, and economic institutions. Surprisingly, while bureaucratic institution has positive coefficients, the other two forms of institutions have negative coefficients, suggesting that FDI stock inflows towards developing countries in ASEAN are more likely to be motivated by weak legal and economic institutions.
5
Arisanto, Puguh Toko. "Investasi Asing Melimpah di Tengah Institusi Yang Buruk di Tiongkok." Nation State Journal of International Studies 3, no. 1 (June 30, 2020): 33–47. http://dx.doi.org/10.24076/nsjis.2020v3i1.37.
Full textAbstract:
China has become the world's second largest FDI destination in recent years, despite its poor institution status. The success of China seems to undermine the existing theoretical paradigm that good institutions are significantly determinant factors to attract FDI. This paper aims to explain three locational advantages possessed by China which are domestic market, relatively low wages and broad global market access as attracting factors to FDI inflow amid poor institutions. Furthermore, this paper will explain correlation of FDI with poor institutions in China from some elements of governance.
6
Bergougui, Ibrahim, Réda Boudjana, and Brahim Zaimen. "Institutional quality and foreign direct investment in arab countries: new evidence from dynamic panel estimation (Arabic)." les cahiers du cread 38, no. 4 (February 27, 2023): 313–45. http://dx.doi.org/10.4314/cread.v38i4.12.
Full textAbstract:
In this paper, we re-assess the nexus between various institutional indicators and foreign direct investment (FDI) flows in 16 Arab countries for the period (1985-2017) by employing the system Generalized Method of Moments. We contribute to existing literature in three ways: First, the impact of each institutional quality indicator on FDI flows is examined separately. Second, construct an institutional index in order to capture the overall impact of institutions on FDI. Finally, the paper also looks at the impact of the Arab Spring on FDI flows. Based on dynamic panel models, the empirical results show that some institutional indicators are more important than others in attracting more FDI in-flows. The results indicate that, the investment profile, law and order, and political institutions, lead to increased FDI flows. We also find a negative association between the Arab Spring unrest and FDI inflows.
7
Bokpin, Godfred A., Lord Mensah, and Michael E. Asamoah. "Legal source, institutional quality and FDI flows in Africa." International Journal of Law and Management 59, no. 5 (September 11, 2017): 687–98. http://dx.doi.org/10.1108/ijlma-03-2016-0028.
Full textAbstract:
Purpose This paper aims to find out how the legal system interacts with other institutions in attracting Foreign Direct Investment (FDI) into Africa. Design/methodology/approach The authors use annual panel data of 49 African countries over the period 1980 to 2011, and use the system generalized method of moments (GMM) estimation technique and pooled panel data regression. Findings The authors find that the source of a country’s legal system deters FDI inflow as institutions alone cannot bring in the needed quantum of FDI. In terms of trading blocs, it was found that there is negative significant relationship between institutional quality and FDI for South African Development Community (SADC) as well as Economic Community of West Africa States (ECOWAS) countries. Practical implications For policy implications, the results suggest that reliance on institutions alone cannot project the continent to attract the needed FDI. Originality/value Empiricists have devoted considerable effort to estimating the relationship between institutions and FDI on the African continent, but this paper seeks to ascertain the effect of legal systems and institutional quality within African specific trade and regional blocks.
8
Bowness, Jack. "Foreign Direct Investment and Extractive Institutions." Potentia: Journal of International Affairs 10 (October 15, 2019): 36–49. http://dx.doi.org/10.18192/potentia.v10i0.4510.
Full textAbstract:
There is a significant debate underway regarding the risks and rewards of foreign direct investment (FDI) for countries in the Global South. These discussions are particularly relevant to the people of Latin America, where the use of inward FDI as a mechanism to support economic development has had dramatic results, both positive and negative. One of the key works in the study of FDI is Robert I. Rotberg’s argument that FDI is critical to support the development of weak states; however, the applicability of this theory faces difficulty in the context of Latin America, where middle-income countries have extractive institutions (Rotberg, 2002). I use the cases of Mexico and Peru to demonstrate that for middle-income countries, extractive institutions can hamper the rewards of FDI and even exacerbate development problems or create new ones. In this regard, the sector of FDI will determine the nature of the impact. In states with extractive institutions, FDI in the natural resource sector is prone to stimulating social conflict. In states with extractive institutions, FDI in the manufacturing sector begets a situation of stagnated development, as the jobs that are introduced are of poor quality and low wages.
9
Owczarczuk, Magdalena. "Institutional competitiveness of Central and Eastern European countries and the inflow of foreign direct investments." Catallaxy 5, no. 2 (December 31, 2020): 87–96. http://dx.doi.org/10.24136/cxy.2020.008.
Full textAbstract:
Motivation: Central and Eastern European countries (CEE) in spite of a long period of European Union membership and integration with the developed economies of Western Europe are still on the path of convergence, i.e. pursuing the highly developed countries in terms of, among others, GDP per capita. Assuming that the FDI inflow carries numerous benefits for the economic growth of the recipient country, those economies still compete against one another for foreign capital. One of the factors that attracts FDI is high quality of institutional surrounding.
Aim: assessment of institutional competitiveness of the selected CEE countries (Czech Republic, Estonia, Lithuania, Latvia, Poland, Slovakia, Slovenia, Hungary) as well as verification of the relationship between institutional competitiveness and the FDI inflow to the analyzed economies.
Materials and methods: The article reviews positions obtained by the selected CEE countries in the ranking of competitiveness published by Global Economic Forum (Global Competitiveness Report). The analysis and assessment of CEE countries competitiveness focused around the institutional quality assessment. Quantitatively, the connection was revealed between competitiveness ranking in the field of institutions and FDI inflow per capita and FDI as % of GDP to the economies under consideration.
Results: the analysis of the global competitiveness index (GCI) allows to notice that among the CEE countries, Estonia is characterized with the highest institutional competitiveness. The detailed analysis indicated that low social capital quality decreases institutional competitiveness in case of all analyzed economies. The conducted quantitative analysis of the potential link between the GCI?Pillar 1. Institutions index and the inflow of foreign direct investments to CEE countries indicates the positive correlation of those variables. Higher index values (institution quality assessment) corresponds to the higher FDI per capita level and FDI calculated as GDP percentage.
10
Sayari, Karima. "Institutional Efficiency and Attraction of Foreign Direct Investment to Developing Countries." International Journal of Economics and Finance 11, no. 7 (June 5, 2019): 54. http://dx.doi.org/10.5539/ijef.v11n7p54.
Full textAbstract:
The paper estimates the impact of institutions’ quality on the attraction of foreign direct investment (FDI) to developing countries. Data Envelopment Analysis (DEA) was used to develop a new measure of quality of institutions: Institutional Efficiency Index (IEI). In order to appraise quantitatively the effect of institutional quality on FDI entry, we used a panel data regression analysis on a dataset covering 40 countries from different developing regions for which the necessary data were accessible during the period 2011-2015. The paper argues that the institutional efficiency, as a measure of institutional quality, enhances the attractiveness of developing countries to FDI.
The results of this paper suggest that FDI is mainly determined by institutional quality. A host country endowed with a high quality of institutions will be more attractive to foreign investors. In order to improve their competitiveness in term of attraction of foreign investment, developing countries should work more on providing a stable environment as well as on the transparency of policy implementation regarding the entry of multinational companies.
11
Nguyen, Lanh Van, Tha Hien To, and Duong Huy Phan. "Impact of the Institution on Foreign Direct Investment in Economic Transition." International Journal of Sustainable Development and Planning 17, no. 3 (June 2, 2022): 925–29. http://dx.doi.org/10.18280/ijsdp.170322.
Full textAbstract:
Foreign direct investment plays an important role in the economic development of developing countries. One of the factors that investors consider when deciding to invest in a country is the institutional factor. Therefore, this study is conducted to determine the relationship between institutions and foreign direct investment in Vietnam. Research data is panel data from 63 provinces/cities of Vietnam for 2012-2015 used to test the hypothesis. The fixed impact assessment model (F.E.M.) and IV-GMM allowed the exact causal relationship of these factors to be determined. The results show a positive impact from institutional factors on FDI attraction in Vietnam. Research results also show that R&D research also helps increase FDI attraction into Vietnam significantly, and the accountability factor is the most important factor for investment decisions of FDI owners. In addition, the study also examines in detail the institutional distribution indicators that affect FDI. The study shows a significant relationship between institutions and FDI attraction to Vietnam. From this result, some policy implications are also given to improve the ability to attract FDI based on institutional policy.
12
Rehman, Faheem Ur, József Popp, Ejaz Ahmad, Muhammad Asif Khan, and Zoltán Lakner. "Asymmetric and Symmetric Link between Quality of Institutions and Sectorial Foreign Direct Investment Inflow in India: A Fresh Insight Using Simulated Dynamic ARDL Approach." Sustainability 13, no. 24 (December 13, 2021): 13760. http://dx.doi.org/10.3390/su132413760.
Full textAbstract:
This study explores the bicausality between institutional quality and FDI inflow both aggregated and sector-wise, i.e., the agricultural, manufacturing, and tertiary sectors in the Indian economy, by applying simulated autoregressive distributed lag (SARDL) dynamic new techniques, an extended variant of orthodox ARDL and NARDL. The study confirms that aggregated and sectorial FDI are enhanced by adequate institutional quality, and similarly, FDI promotes quality institutions. The nexus between institutional quality and FDI inflow is an inspiration for India to compete with developed economies by enhancing its institutional quality. The study observes cointegration and bidirectional causality between institutional quality and aggregated FDI.
13
Agoba, Abel Mawuko, Elikplimi Agbloyor, Afua Agyapomaa Gyeke-Dako, and Mac-Clara Acquah. "Financial globalization and institutions in Africa: the case of foreign direct investment, central bank independence and political institutions." Journal of Institutional Economics 16, no. 6 (June 8, 2020): 931–53. http://dx.doi.org/10.1017/s1744137420000193.
Full textAbstract:
AbstractIn this paper, we examine the bi-directional relationship between financial globalization (proxied by foreign direct investment (FDI) flows) and economic institutions (proxied by central bank independence (CBI)) taking into consideration the role of political institutions. We test our argument on a sample of 48 African countries (1970–2012) using a two-step System Generalized Methods of Moments, with collapsed instruments and Windmeijer robust standard errors. Using two proxies for CBI, the study finds that while legal CBI does not have a significant impact on FDI, high central bank governor turnover rates have a significantly negative impact on FDI inflows. However, higher levels of political institutions significantly enhance the impact of legal CBI on FDI inflows, and dampen the impact of high central bank governor turnover rates on FDI inflows. The study also shows that, higher FDI inflows have a significantly positive impact on both legal and de facto CBI. This impact is accelerated in countries characterized by higher levels of political institutions.
14
Bouzahzah, Mohamed. "Pollution Haven Hypothesis in Africa: Does the Quality of Institutions Matter?" International Journal of Energy Economics and Policy 12, no. 1 (January 19, 2022): 101–9. http://dx.doi.org/10.32479/ijeep.11856.
Full textAbstract:
This article aims at investigating whether the FDI inflows affect CO2 emissions for a set of 40 African countries. To be specific, it seeks to perceive, to what extent the quality of institutions plays a role in the empirical validity of the famous pollution haven hypothesis (PHH). We apply Panel ARDL and the three estimators; Pooled Mean Group (PMG), Mean Group (MG) and Dynamic Fixed Effect estimator (DFE) but also Granger causality and Dumitrescu and Hurlin causality for annual data from 1988 to 2016. Long run results indicate the link between FDI, and pollution is relatively complex. If in general, the PHH does not seem to be validated, the result represents quite the opposite when we consider the institutional quality in the diverse African countries. Indeed, our results show the quality of institutions determines the nature of FDI received by African countries. In countries with a high level of corruption, inward FDI significantly reduces CO2 emissions, while in countries with low institutional quality, inward FDI increases CO2 emissions. Some policy recommendations have been formulated to support African countries reduce carbon emissions and support economic development. In particular, institutional reform would enable African countries to reconcile economic development, particularly through the FDI, with environmental quality.
15
Islam, Mollah Aminul, Muhammad Asif Khan, József Popp, Wlodzimierz Sroka, and Judit Oláh. "Financial Development and Foreign Direct Investment—The Moderating Role of Quality Institutions." Sustainability 12, no. 9 (April 27, 2020): 3556. http://dx.doi.org/10.3390/su12093556.
Full textAbstract:
Considering the importance of foreign direct investment (FDI) inflows for the sustainable economic advancement of a host country, this paper investigates the financial development and FDI nexus, using institutional quality as a moderator. The sample consists of 79 Belt and Road Initiative (BRI) partner countries, as these countries are entering a new age of integration, foreign trade, and mutual development. The empirical findings of conventional and robust estimators show that the financial development of BRI host countries significantly attracts FDI, while the institutional quality plays a significant moderating role in this relation. The in-depth analysis offers the insight that financial markets are less attractive to FDI relative to financial institutions. Thus, policymakers are advised to uphold sound financial institutions to make the country more attractive to overseas investors, while concentration on financial markets may multiply the benefits of FDI. The results are robust to alternative proxies of the key variables and alternative methodologies.
16
Owusu-Nantwi, Victor. "Foreign direct investment and institutional quality: empirical evidence from South America." Journal of Economic and Administrative Sciences 35, no. 2 (June 3, 2019): 66–78. http://dx.doi.org/10.1108/jeas-03-2018-0034.
Full textAbstract:
Purpose The purpose of this paper is to investigate the effect of institutional quality on foreign direct investment (FDI) flows in South America. Design/methodology/approach The study uses two-stage least squares (2SLS) and fixed effect ordinary least squares regression analyses to examine the relationship between institutional quality and FDI in South America. Findings The study finds a significant positive relationship between institutional quality index and FDI. This implies that improvements in the institutional quality relate to increases in the flow of FDI to South America. Domestic capital, GDP per capita growth, and trade positively relate to FDI. However, the coefficient of trade is not significant. This implies that increases in these variables relate to increases in FDI flows to South America. Practical implications The study recommends that quality of institutions matter to the flow of FDI and therefore, efficient institutional reforms should be a priority for policymakers as this creates a conducive investment environment to attract FDI in South America. Further, policies that are focused on promoting competition, open market, and effective non-corrupt public institution as well as open and transparent legal and regulatory regimes, and effective delivery of government services should be the priority of policymakers in South America (Mishra and Daly, 2007). Originality/value The study uses a single measure of institutional quality based on a broad set of institutional indicators. This broad measure of institutional quality differs from the available studies that mainly focused on single aspects of institutional quality, that is, either corruption, governance, or political risk.
17
Yakubu, Ibrahim Nandom. "Institutional quality and foreign direct investment in Ghana." Review of International Business and Strategy 30, no. 1 (January 2, 2020): 109–22. http://dx.doi.org/10.1108/ribs-08-2019-0107.
Full textAbstract:
Purpose This paper aims to investigate the impact of institutional quality on foreign direct investment (FDI) in Ghana for the period 1985-2016. Design/methodology/approach The study uses the autoregressive distributed lag (ARDL) approach to examine the relationship between institutional quality along with other controlled variables and FDI. Findings Evidence from the ARDL framework establishes a positive significant effect of institutional quality on FDI irrespective of the time horizon. The results also reveal a significant impact of inflation on FDI in both short and long run, while GDP per capita growth and trade are significant determinants only in the short run. Practical implications The study recommends the instigation of effective policies and strategies that seek to strengthen the quality of institutions, as this provides a conducive investment climate to attract FDI. Specifically, policies that are focused on promoting transparent legal regimes, regulatory reforms, non-corrupt institutions and political stability should be the precedence of policymakers. Originality/value In addition to being a pioneering work on the impact of institutional quality on FDI in Ghana, the main contribution of the study lies in its application of the principal component analysis to generate a single measure of institutional quality based on a number of institutional factors.
18
VAN BON, NGUYEN. "THE ROLE OF INSTITUTIONAL QUALITY IN THE RELATIONSHIP BETWEEN FDI AND ECONOMIC GROWTH IN VIETNAM: EMPIRICAL EVIDENCE FROM PROVINCIAL DATA." Singapore Economic Review 64, no. 03 (May 26, 2019): 601–23. http://dx.doi.org/10.1142/s0217590816500223.
Full textAbstract:
All investigations into the role of institutions in the relationship between foreign direct investment (FDI) and economic growth conclude the impact of interaction between FDI and institutional quality on economic growth is significantly positive. Contrary to the conclusion of these studies, this paper finds it is significantly negative for a panel data of 43 provinces in Vietnam over the period 2005–2012 via the estimation method of difference panel GMM Arellano–Bond. In addition, the estimated results also show: (1) FDI inflows significantly foster economic growth; (2) Good institutional quality has a significantly positive impact while bad institutional quality has a negative albeit insignificant effect on economic growth. From the policy perspective, these findings signal an important message to developing countries that governments should carefully adjust policies and institutions because aside from attracting more FDI inflows and promoting the economic activities, it can also be detrimental to economic growth.
19
Vu, Huynh Quoc, Pham Thi Bich Ngoc, and Nguyen Le Hoang Thuy To Quyen. "The Effect of Institutions on Productivity Spillovers from FDI to Domestic Firms: Evidence in Vietnam." GLOBAL BUSINESS FINANCE REVIEW 27, no. 3 (June 30, 2022): 28–40. http://dx.doi.org/10.17549/gbfr.2022.27.3.28.
Full textAbstract:
Purpose: The purpose of this study is to investigate the impact of formal institutions and their components on productivity spillovers from FDI enterprises to domestic firms’ TFP in developing countries like Vietnam.
Design/methodology/approach: The study, conducted in two steps to explore the relationship, is to estimate the firm's TFP in accordance with the semi-parametric method of Levisohn and Petrin (2003). Regression is in accordance with the equation with panel data and adjusted by Driscoll and Kraay standard errors. An unbalanced panel data, related to more than 61,600 Vietnamese manufacturing firms from 2012 to 2017, is combined with the Provincial Institutional Quality Survey (PAPI index) and IO table.
Findings: The local institutions have a positive impact on promoting learning ability and increasing productivity of domestic firms, especially small and medium enterprises (SMEs) that take better advantage of this effect. Vertical linkages with FDI enterprises assist local firms to increase productivity while horizontal linkages bring in negative effects. Domestic enterprises with high productivity (in the top 25%) receive positive spillover effects from horizontal linkages and vertical linkages and gain positive impacts of the institution on productivity whereas the group of low-productivity enterprises records negative impacts. This research highlights those enterprises operating in the region where institutions have transparency, accountability, participation in comments and effective corruption control can absorb spillovers and improve their productivity as well as the transparency and corruption control are recognized as having a positive impact through horizontal linkages.
Research limitations/implications: With the limitation of research data being conducted only on manufacturing enterprises, there is a lack of data on the impact of service enterprises. The study only stops at understanding the impact of formal institutional effects on productivity spillovers whereas informal institutional effects will be studied in the future. Furthermore, the productivity spillovers of FDI enterprises are explored in general besides other FDI forms that will have different productivity spillovers like offshore. From the results of this study, the governments of developing countries should improve their institutions to encourage local enterprises to take the advantage of spillover effects from FDI enterprises as well as pay more attention to regional factors by supplementing development priority policies based on the capacity of each region. Institutional quality at provincial level has a positive impact on productivity spillovers; consequently, it is essential to have policies for further institutional improvement.
Originality/value: This is the first research paper on the impact of the institutional factor at provincial level on firm’s productivity in developing countries like Vietnam. Theoretically, the impact of formal institutions on spillover effects from FDI enterprises is also clarified. In addition, our findings have implications for local economic development policies: vertical linkages promote domestic firms to increase their productivity while horizontal linkages of FDI enterprises in the same industry generate adverse impacts. This paper suggests some feasible solutions for SMEs in developing countries towards their productivity improvement.
20
Zhang, Yi. "Institutions, Firm Characteristics, and FDI Spillovers." Emerging Markets Finance and Trade 55, no. 5 (December 21, 2018): 1109–36. http://dx.doi.org/10.1080/1540496x.2018.1523057.
Full text
21
Ajide, K. Bello, and Ibrahim Dolapo Raheem. "Institutions-FDI Nexus in ECOWAS Countries." Journal of African Business 17, no. 3 (May 3, 2016): 319–41. http://dx.doi.org/10.1080/15228916.2016.1180778.
Full text
22
Du, Julan, Yi Lu, and Zhigang Tao. "FDI location choice: agglomeration vs institutions." International Journal of Finance & Economics 13, no. 1 (January 2008): 92–107. http://dx.doi.org/10.1002/ijfe.348.
Full text
23
Raffat, Humaira, and Danish Ahmed Siddiqui. "Does Openness, and Productivity Matters for FDI: A Global Interactive Analysis Based on the Complementary Role of Institutions." Issues in Economics and Business 6, no. 2 (July 22, 2020): 1. http://dx.doi.org/10.5296/ieb.v6i2.17402.
Full textAbstract:
Conventional wisdom suggested that investment flows in where you have abnormal returns that resulted in a high productivity area. However, FDI behaves peculiarly, as most are targeted towards developed countries where excess competition drives down returns and ultimately productivity. On the contrary, it shy in developing countries where one has more productive investment opportunities. This study tries to tackle the problem and explores the factors that influenced FDI flows. In particular, we focused on productivity, trade openness, financial liberalization, and institutions. Macro-level data was collected from 27 economies from 2004 to 2015. The analysis was done using GMM methodology. The results showed productivity remained insignificant in explaining FDI throughout the models. Trade seems to have a significant positive impact on the model without the interaction effect. Interestingly, financial liberalization seems to affect FDI negatively in all cases. GDP growth had a positive and significant effect. All Institutional variables that include control of corruption, government effectiveness, regulatory quality, rule of law, seems to have a significant positive impact on FDI individually, as well as in the combined form. We also witnessed significant and positive complementarities with each of the institutional factors and productivity, in explaining FDI. This indicated that higher productivity is not the deciding factor of FDI, however, the same productivity in a better institutional environment would produce positive complementarity that would significantly determine FDI. The findings imply that investors' prime concern is not productivity but the institutional environment. Moreover, only with quality institutions, the conventional wisdom persists.
24
Fabry, Nathalie, and Sylvain Zeghni. "How former communist countries of Europe may attract inward foreign direct investment? A matter of institutions." Communist and Post-Communist Studies 39, no. 2 (June 1, 2006): 201–19. http://dx.doi.org/10.1016/j.postcomstud.2006.03.006.
Full textAbstract:
The aim of this paper is to emphasize the role of institutions to attract FDI in 11 former communist European Countries: eight new members of the European Union (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia) and three candidates to a future enlargement (Bulgaria, Croatia and Romania). In a first step we proceed to an analytical framework to understand the link between transition, institutions and FDI. In a second step we test an empirical model based on pooled data. The results of our empirical test confirm our expectation that FDI is sensitive to specific and local institutional arrangements.
25
Ahmad, Mohsin Hasnain, Qazi Masood Ahmed, and Zeeshan Atiq. "The Impact of Quality of Institutions on Sectoral FDI." Foreign Trade Review 53, no. 3 (May 21, 2018): 174–88. http://dx.doi.org/10.1177/0015732517734757.
Full textAbstract:
This study addresses the issue whether institutional quality affects the sectoral FDI both in short run and long run in Pakistan. By employing ARDL co-integration technique, we analyse the impact of institutional quality on primary, manufacturing and services sectors FDI in Pakistan. The findings suggest that institutional quality matters in attracting FDI in manufacturing and services sectors in the long run while institutional quality does not have a significant impact on FDI in the primary sector. Moreover, results show that the impact of institutional quality on these sectors is not apparent in short run. The main findings from this research are that in long run institutional quality matters to attract substantial FDI in manufacturing and services sector of Pakistan. Hence, policies aimed at strengthening the institutional quality should be the priority for government. JEL: F21, O43, C22
26
Knutsen, Carl Henrik, Asmund Rygh, and Helge Hveem. "Does State Ownership Matter? Institutions' Effect on Foreign Direct Investment Revisited." Business and Politics 13, no. 1 (April 2011): 1–31. http://dx.doi.org/10.2202/1469-3569.1314.
Full textAbstract:
This paper investigates whether Foreign Direct Investment (FDI) decisions are influenced by state ownership. The literature has established that host country institutions affect FDI allocation, but there is no systematic evidence how state ownership affects such relationships. However, we expect that state ownership systematically affects the relation between host country institutions and FDI. Theoretical arguments indicate that state-owned enterprises (SOEs) should invest relatively more than privately owned enterprises (POEs) in countries with poor rule of law, poor property rights protection and a high degree of corruption. However, SOEs are expected to invest relatively less than POEs in dictatorships and countries with poor human rights protection. We test these hypotheses, using a new dataset on Norwegian firms' FDI from 1998 to 2006. The empirical analysis suggests that SOEs invest relatively more than POEs in countries with high level of corruption and weak rule of law. Indeed, SOEs' FDI appears not to be reduced by such institutional risk factors. However, there is no solid evidence indicating that SOEs invest more in democracies and countries with better human rights protection.
27
LUCKE, NAVINA, ALEXANDER KARMANN, and STEFAN EICHLER. "THE IMPACT OF INSTITUTIONAL AND SOCIAL CHARACTERISTICS ON FOREIGN DIRECT INVESTMENT: EVIDENCE FROM JAPAN." Annals of Financial Economics 08, no. 02 (December 2013): 1350010. http://dx.doi.org/10.1142/s2010495213500103.
Full textAbstract:
We examine the determinants of Japanese foreign direct investment (FDI) focusing on institutional and social factors. Using panel data on 59 countries from 1995 to 2008, we find that host countries with free and open markets and greater cultural distance from Japan attract Japanese FDI. Good institutions, such as a well-developed legal framework and an effective government, are important in promoting Japanese FDI to emerging economies, whereas fewer regulatory restrictions, lower tax burden, and more religious diversity attract Japanese FDI to developed countries. We find that corruption stimulates Japanese FDI to developed countries, which is contrary to most previous research.
28
Luo, Qi. "Weak State, Strong Networks: The Institutional Dynamics of Foreign Direct Investment in China. By Hongying Wang. [Hong Kong: Oxford University Press, 2001. xiii+211 pp. HK$150.00. ISBN 019-590631-4.]." China Quarterly 172 (December 2002): 1065–103. http://dx.doi.org/10.1017/s0009443902260623.
Full textAbstract:
This is a competent work that challenges the claim of new institutional economics and international regime theory that effective state institutions in the host country are vital to the inflow, and indeed growth, of foreign direct investment (FDI). It argues that the large amount of FDI China has attracted so far has been facilitated more by the informal societal institutions represented by strong personal networks operating in the country than by the formal state institutions manifested by the weak legal system. The author validates her arguments with a large number of anecdotes based on over 100 interviews she conducted in China.
29
Nguyen Van, Bon. "Effects of Institutional Quality on FDI in Provinces of Vietnam: Empirical Evidence Based on Differenced Panel GMM." Journal of Asian Business and Economic Studies 22, no. 03 (July 1, 2015): 26–45. http://dx.doi.org/10.24311/jabes/2015.22.3.04.
Full textAbstract:
Foreign direct investment (FDI) has been strongly affecting the world economy during the past years and is a critical topic for both developing and developed countries. Most countries, particularly developing ones, always attempt to adjust and modify appropriate policies and institutions to attract FDI inflows. In the context of Vietnam, does the institutional quality have any effect on attracting FDI inflows in provinces? To answer clearly and exactly this question, the impact of institutional quality on attracting FDI inflows is empirically investigated in a sample of 43 provinces of Vietnam over the period of 2005–2012 via the estimation technique of difference panel GMM. Estimated results indicate that in the total sample of all provinces the institutional quality has significantly positive effects on the FDI flows. However, in the sub-sample of provinces the impact of the institutional quality on attracting FDI inflows in Northern and Southern regions are statistically significant while that in Central region is not.
30
Bbale, John Mayanja, and John Bosco Nnyanzi. "Institutions and Foreign Direct Investment: Evidence from Sub-Saharan Africa Regions." Journal of Sustainable Development 9, no. 4 (July 30, 2016): 11. http://dx.doi.org/10.5539/jsd.v9n4p11.
Full textAbstract:
<p>The paper set out to investigate the nexus between institutional quality and inward FDI and how the presence of liberalization and financial development influence this linkage. We build on Dunning’s eclectic paradigm that focuses on locational advantages. A fixed effects approach is employed and the estimation results confirm the crucial role of institutional quality in attracting FDI inflows. However the impact varies with the particular group. In particular, apart from SADC, institutional quality seems to matter significantly in all the other groups especially in EAC and ECOWAS. Additional findings reveal a mixed impact regarding the presence of financial development and liberalization in the institution-FDI nexus: While Trade liberalization policies seem to be at the forefront in ECOWAS and SADC groups, it is credit depth and capital account openness that appear to matter most in EAC. We confirm the resilience of inward FDI during the global crisis and document a positive significant relationship between FDI inflows on the one hand and host market size and infrastructure development on the other. While a one-size-fits-all-policy should be discouraged due to the heterogeneous nature of SSA countries, overall, a comprehensive set of policies designed with caution to improve the institutional quality, the financial system, trade openness and capital account liberalization would be valuable for attracting FDI inflows to SSA.</p>
31
Chen, Victor Zitian, Jing Li, and Daniel M. Shapiro. "Subnational institutions and outward FDI by Chinese firms." Multinational Business Review 23, no. 4 (November 16, 2015): 254–76. http://dx.doi.org/10.1108/mbr-07-2015-0029.
Full textAbstract:
Purpose – The purpose of this study is to extend the classic country-specific advantage (CSA) – firm-specific advantage (FSA) framework by integrating an institution-based view of CSAs into the discussion of FSAs. In his classic CSA – FSA framework, Rugman suggests that successful multi-national enterprises (MNEs) are often built on the interaction between strong FSAs and strong CSAs at home. In the case of emerging market multi-nationals (EMNEs), he argued that strong CSAs were of particular importance in allowing EMNEs to develop FSAs. In particular, we examine CSAs at the sub-national level. Design/methodology/approach – The authors suggest that sub-national heterogeneity in market-supporting institutions is an important feature of emerging market economies, and that consideration of such heterogeneity contributes to our understanding of firm capabilities and overseas investment behavior of emerging market firms. The authors also identify explicitly the mechanisms through which sub-national institutions at home affect FSAs and, subsequently, the ability of emerging market firms’ entry into developed markets. Specifically, the authors argue that strong local institutions that support effective and well-functioning markets create the conditions that induce firms in that location to develop market-related capabilities in R & D and marketing, which, in turn, enable them to expand into developed countries. Findings – Using a unique data set on overseas investment by Chinese firms and causal mediation analysis, the authors find strong evidence in support of the view that strong sub-national institutions help emerging market firms develop the capabilities to enter developed country markets. Originality/value – This study extends the classic CSA–FSA framework by integrating an institution-based view of CSAs into the discussion of FSAs. In particular, the authors examine CSAs at the sub-national level.
32
Girik Allo, Albertus. "Institution, Financial Sector, and Economic Growth: Use The Institutions As An Instrument Variable." Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan 17, no. 1 (June 28, 2016): 84. http://dx.doi.org/10.23917/jep.v17i1.1555.
Full textAbstract:
Institution has been investigated having indirect role on economic growth. This paper aims to evaluate whether the quality of institution matters for economic growth. By applying institution as instrumental variable at Foreign Direct Investment (FDI), quality of institution significantly influence economic growth. This study applies two set of data period, namely 1985-2013 and 2000-2013, available online in the World Bank (WB). The first data set, 1985-2013 is used to estimate the role of financial sector on economic growth, focuses on 67 countries. The second data set, 2000-2013 determine the role of institution on financial sector and economic growth by applying 2SLS estimation method. We define institutional variables as set of indicators: Control of Corruption, Political Stability and Absence of Violence, and Voice and Accountability provide declining impact of FDI to economic growth.
33
Silva, Carlos A., Xavier Ordeñana, Paul Vera-Gilces, and Alfredo Jiménez. "Global Imbalances: The Role of Institutions, Financial Development and FDI in the Context of Financial Crises." Sustainability 13, no. 1 (January 2, 2021): 356. http://dx.doi.org/10.3390/su13010356.
Full textAbstract:
This paper examines the role of the quality of institutions, financial development and FDI on current account imbalances, which narrowed during the Global Financial Crisis. In doing so, we utilize (i) a sample of 49 advanced and emerging economies during 1984–2014; (ii) a novel three-clustered indices of institutional quality and (iii) two measures of financial development, the share of FDI and a measure of financial crisis in addition to standard determinants of the current account. We find that the better the quality of institutions and the greater the financial development, the larger are current account deficits; meanwhile, FDI contributes to boost current account balances. Moreover, financial crisis episodes tend to improve current account balances, particularly for countries that are highly open to trade and to receive FDI, as in the case of advanced economies and East Asian countries.
34
Hyeseon, Na. "Do Policy and Institutional Variables Play a More Significant Role in Attracting Foreign Direct Investment to Eastern Africa than They Do in Other Regions of Sub-Saharan Africa?" Korean Journal of Policy Studies 33, no. 2 (August 31, 2018): 41–51. http://dx.doi.org/10.52372/kjps33202.
Full textAbstract:
The paper aims to assess whether policy and institutional variables are significant factors in attracting foreign direct investment (FDI) to eastern Africa. The assessment is based on the determinants of FDI in a sample of 30 sub-Saharan African (SSA) countries between 2005 and 2016. Employing panel data methodology, I investigate whether policy and institutional variables play a more significant role in attracting FDI to eastern Africa than they do in other SSA countries. The results indicate that these variables are more significant factors for attracting FDI to eastern Africa than they are for the other SSA regions. The paper concludes that eastern Africa’s current FDI promotion policies are working. In particular, ensuring a stable macroeconomic situation and a favorable profit tax rate as well as building good institutions have proven to be good tools for attracting FDI to eastern Africa.
35
Osei, Collins, Maktoba Omar, and Tasneem Suliman Joosub. "The effect of colonial legacies on Africa’s inward FDI: the case of UK FDI in Ghana." critical perspectives on international business 16, no. 3 (February 3, 2020): 259–77. http://dx.doi.org/10.1108/cpoib-05-2018-0041.
Full textAbstract:
Purpose The purpose of this paper is to examine the role colonial ties play in attracting foreign direct investment (FDI) to Ghana, several years after the official end of colonisation in the African continent. Colonisation left behind legacies of institutional framework, social ties and remnants of companies of colonial masters, which could potentially offer contemporary businesses from home countries the benefits of country of origin agglomeration. Design/methodology/approach This paper uses sequential explanatory mixed research design through 101 questionnaires and 8 interviews from the UK companies with FDI in Ghana. This approached enabled the initial quantitative results to be explored further through the qualitative data. Findings Colonial ties have limited influence on contemporary flow of FDI to Ghana, in spite of the institutional legacies between former colonisers and colonies. Majority of UK companies are influenced by agglomeration opportunities in general rather than country of origin agglomeration. However, country of origin agglomeration remains important to over a third of the companies surveyed. Research limitations/implications The sample was taken from the non-extractive industry in Ghana, and caution must be applied in generalising the findings. However, some universal issues concerning agglomeration and institutions are discussed. Originality/value Although there has been some research on colonial history and its impact on FDI in Africa, existing knowledge on bilateral relations is rather limited. Unlike previous studies, this research provides depth by examining colonial influence on FDI between two countries, using two key concepts: country of origin agglomeration and institutions. It provides UK companies with contemporary views to consider when exploring FDI opportunities in Ghana, particularly in relation to the effects of the colonial history. It also provides investment promotion agencies with empirical results on the importance of various forms of agglomeration and institutions for FDI attraction.
36
Vogiatzoglou, Klimis. "Free Market Institutions and FDI Performance in Emerging Asian Economies." International Journal of Management and Economics 52, no. 1 (December 1, 2016): 43–58. http://dx.doi.org/10.1515/ijme-2016-0026.
Full textAbstract:
Abstract This paper examines long-term developments in the quality and efficiency of free market institutional systems across thirteen emerging economies from South, South-east, and East Asia over the 1995–2014 period. The paper also empirically assesses the impact of free market institutions on a country’s inward foreign direct investment (FDI) performance. We find that the free market institutional framework in most economies is still relatively inefficient, restrictive, and underdeveloped but has, nevertheless, substantially improved during the last twenty-year period. Our empirical results also indicate that a free market institutional system in a host-country is a factor that attracts inward FDI to emerging Asian economies by multinational companies. Consequently, policy makers should focus on further improving the quality of free market institutions.
37
Kechagia, Polyxeni, and Theodore Metaxas. "FDI and Institutions in BRIC and CIVETS Countries: An Empirical Investigation." Economies 10, no. 4 (March 24, 2022): 77. http://dx.doi.org/10.3390/economies10040077.
Full textAbstract:
In recent years, a number of countries with emerging economies have proceeded to use market-oriented strategies, deregulation and reforms in order to attract more foreign investors and attract foreign direct investment (FDI) inflows. The present paper aims to empirically investigate the role of governance in attracting FDI using panel data and comparing two groups of fast-growing emerging countries, namely BRIC (Brazil, Russia, India, China) and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa). The study includes a panel data analysis using the latest available secondary data ranging from 2002 to 2019. Empirical models are extended and presented. The findings suggest that FDI inflows in BRICS are attracted by rule of law, regulatory quality, political stability and absence of violence, while CIVETS absorb FDI inflows due to control of corruption, political stability, absence of violence, regulatory quality and government effectiveness. The paper contributes to the existing literature since it is the first attempt to investigate the role of governance in attracting FDI in BRIC and CIVETS economies, taking into consideration other FDI determinants. To our knowledge, it is the first paper to study and compare FDI and institutional determinants in the specific groups of emerging countries.
38
Supino, Ilaria. "Inward FDI and Local Institutional Building: Evidence from the Financial Sector in Italy." European Business Law Review 27, Issue 5 (October 1, 2016): 605–13. http://dx.doi.org/10.54648/eulr2016027.
Full textAbstract:
The relationship between economic growth, institutional soundness and inward FDI has always been an ambiguous one. Extensive literature has tried over time to explore the way by which foreign capitals contribute to the host country’s economy, by specifically investigating on the role played by local institutions as moderating factors. In detail, this paper explores whether the financial institutions’ intermediating function exerts some (least indirect) influence on investments from abroad: for this purpose, I put under scrutiny the peculiar current banking scenario in Italy, which – after the recent financial distress – has implemented (and is still involved to implement) relevant institutional reforms, also with the purpose of attracting financial FDI.
39
Li, Quan, and Adam Resnick. "Reversal of Fortunes: Democratic Institutions and Foreign Direct Investment Inflows to Developing Countries." International Organization 57, no. 1 (2003): 175–211. http://dx.doi.org/10.1017/s0020818303571077.
Full textAbstract:
Does increased democracy promote or jeopardize foreign direct investment (FDI) inflows to less-developed countries? We argue that democratic institutions have conflicting effects on FDI inflows. On the one hand, democratic institutions hinder FDI inflows by limiting the oligopolistic or monopolistic behaviors of multinational enterprises, facilitating indigenous businesses' pursuit of protection from foreign capital, and constraining host governments' ability to offer generous financial and fiscal incentives to foreign investors. On the other hand, democratic institutions promote FDI inflows because they tend to ensure more credible property rights protection, reducing risks and transaction costs for foreign investors. Hence, the net effect of democracy on FDI inflows is contingent on the relative strength of these two competing forces. Our argument reconciles conflicting theoretical expectations in the existing literature. Empirical analyses of fifty-three developing countries from 1982 to 1995 substantiate our claims. We find that both property rights protection and democracy-related property rights protection encourage FDI inflows; after controlling for their positive effect through property rights protection, democratic institutions reduce FDI inflows. These results are robust against alternative model specifications, statistical estimators, and variable measurements.
40
Zitian Chen, Victor, Yuanyuan Li, and Sara Hambright. "Regulatory institutions and Chinese outward FDI: an empirical review." Multinational Business Review 24, no. 4 (December 12, 2016): 302–33. http://dx.doi.org/10.1108/mbr-09-2015-0044.
Full textAbstract:
Purpose This paper aims to review the effects of home regulatory institutions on outward foreign direct investment (OFDI) in the context of China and discuss the extent to which they can be extended to other emerging markets. The authors especially compare these empirical studies with theoretical discussions in each category, identify research gaps and suggest future research ideas. Practical implications are discussed. Design/methodology/approach It focuses specifically on three categories of regulatory institutions, including overall institutional development, liberalization of OFDI policies and state ownership (and its closely approximate forms). Using a systematic review, this paper has reviewed 26 empirical studies (23 quantitative and 3 qualitative studies) published in peer-reviewed journals. Findings These studies suggest that overall institutional development toward a market economy in general leads to increased OFDI, but this effect is contingent on the stage of such development and the capabilities of Chinese multinationals. Liberalized and supportive OFDI policies also facilitate OFDI activities but only into selective areas. Findings on state ownership have been mixed. Originality/value This review offers a full picture of empirical evidence on how multiple levels of regulatory institutions affect OFDI from China. In this way, the authors can identify the research gaps between theoretical discussions on home institutions and OFDI and empirical evidence. Thus, they make suggestions for future directions of studies.
41
Satoglu, Emine Beyza. "FDI into emerging markets." International Journal of Research in Business and Social Science (2147- 4478) 9, no. 5 (September 18, 2020): 200–211. http://dx.doi.org/10.20525/ijrbs.v9i5.867.
Full textAbstract:
This empirical paper examines how institutional strengths or weaknesses of emerging markets might affect investment inflows into these countries. The study includes data of 13 emerging economies from different regions. The countries included are Argentina, Brazil, Chile, China, Indonesia, India, South Korea, Mexico, Malaysia, Nigeria, Poland, Russia, and Turkey for the time period 2000-2018. The institutional variables; property rights, good governance, corruption, rule of law, and civil liberties are examined to understand if there is a deviation from the existing literature for the emerging countries. Secondly, we also investigated differences among the emerging countries and asked if non-BRIC countries are different in results. A panel data model has been performed for the analysis. Our findings prove that some institutions such as corruption, civil liberties, property rights, and good governance are significantly important to attract FDI into the emerging markets, as indicated in the literature for the developed countries, but not as strong as assumed. Secondly, other institutional constructs such as rule of law and political stability found to be insignificant in emerging markets. Finally, we found a similar result even when we analyzed emerging markets without BRIC countries.
42
El Fakiri, Ahlam, and Kenza Cherkaoui. "Institutions and FDI: Impact Analysis by Countries’ Income Level." Jurnal Institutions and Economies 14, no. 4 (October 1, 2022): 55–81. http://dx.doi.org/10.22452/ijie.vol14no4.3.
Full textAbstract:
This paper scrutinises the relationship between foreign direct investment (FDI) and institutional quality using panel data for 44 high-, 39 upper middle-, 23 low- and 35 lower middle-income countries over the period 2000 to 2017. We revisit the relationship by using a composite institutional index of World Governance Indicators (WGI), constructed using principal component analysis (PCA). Further, we extend the analysis to estimate the impact of the different dimensions of WGI indicators on FDI flows, using the generalised methods of moments (GMM). Our empirical findings for developed countries suggest that the institutional index is a robust determinant of FDI inflows in high income countries, whereas it is not significant in upper-middle income countries. Dimensions, such as rule of law, regulatory quality and control of corruption are key determinants of FDI flows to high-income countries, whereas none of the dimensions is significant in upper middle-income countries. Findings for developing countries, specifically lower middle-income countries, indicate that the overall index as well as individual dimensions are insignificant because of the poor quality of institutional framework. Ceteris paribus, politically stable economies endowed with an efficient and a credible government and strong regulatory framework tend to attract FDI flows into low-income countries.
43
Dorożyński, Tomasz, Bogusława Dobrowolska, and Anetta Kuna-Marszałek. "Institutional quality as a determinant of FDI inflow: the case of Central and Eastern European countries." Journal of Management and Financial Sciences, no. 36 (July 30, 2019): 103–22. http://dx.doi.org/10.33119/jmfs.2019.36.7.
Full textAbstract:
In the article, we focus on the institutional aspects and their role in attracting foreign direct investment (FDI). Hence, the objective of the paper is to assess institutional quality in 17 countries of Central and Eastern Europe and to examine the relationship between the quality of institutions measured with the synthetic index of institutional quality and FDI inflow.This study is structured as follows. First, it explores the existing literature on factors of investment attractiveness, paying special attention to the importance of institutional efficiency. Then, we discuss FDI inflow into Central and Eastern European countries and select diagnostic variables that will later be used as the basis for the construction of a synthetic index of institutional quality (SIIQ). By composing a ranking of countries based on estimated values of the index, we could identify countries of similar institutional quality. In the last stage we analyse the correlation between SIIQ in individual countries and FDI inward stock as % of GDP. At the end we present conclusions.
44
SEN, KUNAL, and CHAITALI SINHA. "The location choice of US foreign direct investment: how do institutions matter?" Journal of Institutional Economics 13, no. 2 (November 3, 2016): 401–20. http://dx.doi.org/10.1017/s1744137416000333.
Full textAbstract:
AbstractWe look at the institutional determinants of both within- and across-country variations in US foreign direct investment (FDI) flows over time. The strength of our approach is that in contrast to the previous work that has focused on average FDI flows across countries, we are able to explain both the variations in FDI flows across and within countries for a given year. Our core hypothesis is that in countries with high quality of contract enforcement, multinationals are more likely to invest in the industries, where by their very nature investments are relationship specific. Conversely, in countries with low quality of contract enforcement, multinationals are more likely to invest in industries where investments to a large degree are not relationship specific. Using-three dimensional panel data for US FDI flows to 50 countries and 6 sectors for the period 1984–2010, we find strong support for our hypothesis. Our findings suggest that countries that want to attract US FDI in sectors that are highly intensive in technology and institutions such as transportation and electronics should improve their property rights and contracting environment.
45
Seth, Bhavna. "Governance Institutions and FDI: An Empirical Study of Top 30 FDI Recipient Countries." Asian Journal of Research in Social Sciences and Humanities 8, no. 2 (2018): 184. http://dx.doi.org/10.5958/2249-7315.2018.00037.0.
Full text
46
Makoni, Patricia Lindelwa. "FDI, Stock Market Development and Institutional Quality: An African Perspective." International Journal of Financial Research 12, no. 5 (June 10, 2021): 141. http://dx.doi.org/10.5430/ijfr.v12n5p141.
Full textAbstract:
This paper empirically sought to establish the existence of relationships between foreign direct investment, stock market development and institutional quality, respectively. The study adopted a multiple regression analysis, using a panel of nine African countries between 2009 and 2016. Using the random effects model, we find that the relationship between foreign direct investment and stock market development is positive and statistically significant. On the other hand, institutional quality reflected a negative effect on FDI inflows, implying that countries with low quality institutions would struggle to attract inward FDI. The policy implications are that host countries’ policy makers should eliminate or reduce any practices that deter foreign direct investments, such as capital controls and risk of expropriation (institutions), while simultaneously improving the domestic financial infrastructure and related regulations.
47
Tran, Nam Hoai, and Chi Dat Le. "Governance quality, foreign direct investment, and entrepreneurship in emerging markets." Journal of Asian Business and Economic Studies 26, no. 2 (December 2, 2019): 238–64. http://dx.doi.org/10.1108/jabes-09-2018-0063.
Full textAbstract:
Purpose The purpose of this paper is to thoroughly investigate the interplay between institutions, foreign direct investment (FDI) and entrepreneurship in the context of emerging markets (EMs). Design/methodology/approach The authors argue that the impact of FDI on entrepreneurial activity depends on different natures of capital flow and entrepreneurial motivation and relates to the quality of institutional environment. First, the roles of inward and outward FDI are examined in connection with the new firm creation by opportunity- and necessity-motivated entrepreneurs. Second, the integrated influences of (inward/outward) FDI and governance quality (GQ) on (opportunity/necessity) entrepreneurship are tested. This nexus of relationships is analyzed through segmented regressions using the GEM data of 39 EMs over the 2004–2015 period. Findings It is evidenced that the quality of governance infrastructure affects the relationship between FDI and entrepreneurship: in emerging countries with low GQ, opportunity entrepreneurship is stimulated by inward FDI and diminished by outward FDI; and in emerging countries with high GQ, necessity entrepreneurship is discouraged by inward FDI and promoted by outward FDI. Practical implications This research has implications for the institutional context-based execution of public policy in emerging economies. As the entrepreneurial effects of inward and outward FDI are pronounced differently under the two types of entrepreneurship and the two extremes of GQ, public policy makers who recognize the catalytic role of FDI in domestic business development should take the distinct institutional context of their country into consideration. Originality/value The paper contributes to the extant literature on international entrepreneurship in emerging economies by making a breakdown on the roles played by different types of FDI in the entrepreneurial activity, analyzing the mediating effects of GQ on the relationship between inward/outward FDI and entrepreneurship, and interpreting the capital and institutional determinants of entrepreneurship in terms of entrepreneurial motivations by opportunity and necessity.
48
Fagbemi, Fisayo, and Kehinde Mary Bello. "Foreign Direct Investment - Growth Linkage in Sub-Saharan Africa: Is Governance a Mediating Factor?" International Journal of Business, Economics and Management 6, no. 2 (April 9, 2019): 111–29. http://dx.doi.org/10.18488/journal.62.2019.62.111.129.
Full textAbstract:
In sub – Saharan Africa, weak institutions and the rising concern for improved business environment offer considerable leverage for enhancing the effectiveness of institutional framework, capital inflows, and public investment efficiency. These have put SSA in the global spotlight in recent times. Hence, the study examines the mediating effect of governance on FDI – growth nexus in 35 SSA countries between 2002 and 2017 using panel data techniques (Pooled OLS, Fixed Effects, and Panel-Corrected Standard Error’ (PCSE) estimation) and the Dynamic One – Step Difference and System GMM. Results indicate that control of corruption, political stability and regulatory quality, including governance composite index, have a positive and significant effect on economic growth, suggesting that institutions have a salutary impact on SSA economies. The findings further show that FDI inflows adversely influence growth owing to insufficient absorptive capacity that could enhance FDI effectiveness in the region. More importantly, the pervasiveness of poor governance in SSA is identified as a critical case that undermines the development of the nexus between FDI and economic growth. Thus, the study suggests that FDI – growth linkage would be enhanced by promoting a strong institutional environment that offers a good mechanism for attaining the actual FDI spillover potential through a policy framework that points the path towards cost-effective measures in SSA. Also, there should be core investment policies across African countries that would induce the private sector in consolidating government efforts and resources aimed at improving international competitiveness by diversifying the region’s economies away from a protracted commodity – based.
49
Singh, Poonam. "Does Poor Quality of Institutions Attract Cross-Border Mergers and Acquisitions?" South Asian Journal of Macroeconomics and Public Finance 1, no. 2 (December 2012): 191–230. http://dx.doi.org/10.1177/2277978712473399.
Full textAbstract:
Quality of institutions has been found to positively affect Foreign Direct Investment (FDI) flows. This, however, fails to explain the flow of FDI into countries with poor quality of institutions like India and China. This article shows that FDI flows in the form of cross-border mergers and acquisitions (CBMAs) in India share a negative relationship with the gap in quality of institutions between the host and home countries after controlling for market size and market opportunity in the home and host country and infrastructural facilities in the host country. This suggests that apart from market size and opportunity, CBMAs in India are attracted by poor quality of institutions, particularly corruption and poor governance in the country.
50
Amoh, John Kwaku, Abdul-Mumuni Abdallah, and Richard Amankwa Fosu. "Does foreign direct investment cause financial sector development – evidence from an emerging economy." Review of Economic and Business Studies 12, no. 1 (June 1, 2019): 33–55. http://dx.doi.org/10.1515/rebs-2019-0081.
Full textAbstract:
AbstractThe aim of this exploratory research is to examine the foreign direct investment (FDI) – financial development (FD) nexus and to analyse the strength of relationships among FDI measures. The study employed structural equation modelling (SEM) on selected data from the World Development Indicators (WDI) from 1979 to 2016 to achieve the modest goal of this paper. The study established that FDI inflows are precursors of a vibrant and well-developed financial institution in emerging economies. We also found positive and negative correlations amongst the FDI measures, which suggest they move pari passu in stimulating the FD of an economy. A notable feature of this study is in the employment of SEM empirical strategy to shed light on the FDI-FI nexus. The study concluded that emerging economies must focus on the creation of a congenial investment climate to attract FDI inflows, which pivots robust financial institutions because of their cascading effects on the overall economy.