An Empirical Analysis of Effects of Foreign Direct Investment, Exchange Rate and Energy Infrastructure on Domestic Investment

Adekunle, Ahmed Oluwatobi; Abdullahi, Bello I.; Gbadebo, Adedeji Daniel; Fakunmoju, Segun K.

doi:10.31039/jomeino.2019.3.1.1

Cited by 4 publications

(4 citation statements)

References 10 publications

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“…This observation can be attributed to the fact that in times of inflation in emerging economies, financial institutions often provide higher interest rates on deposits, leading individuals to deposit their surplus funds in banks to earn better returns instead of investing in different sectors or foreign countries. Unlike capital flight, this behavior contributes to higher savings, ultimately bolstering economic credit [ 78 , 79 ].…”

Section: Resultsmentioning

confidence: 99%

Investigating capital flight in South Asian countries: The dual influence of terrorism and corruption

Khan,

Abbass,

Qun

et al. 2024

PLoS ONE

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This specific research initiative aims to intricately examine the intricate dynamics connecting terrorism, corruption, and capital flight within the context of South Asian economies, encompassing countries including Bangladesh, India, Pakistan, and Sri Lanka. The principal objectives of this study entail a comprehensive investigation into the synergistic impacts of terrorism and corruption on the prevalence of capital flight. To realize these objectives, the study employs longitudinal data from 1990 to 2019, adopting the portfolio choice framework as its theoretical underpinning. In terms of methodology, the empirical inquiry uses the Generalized Method of Moments (GMM) estimation technique. The empirical findings derived from this analysis distinctly establish a statistically noteworthy and positive correlation between terrorism, corruption, and the occurrence of capital flight across multiple South Asian nations. In light of these discerning outcomes, it is strongly recommended that the governments of South Asian countries prioritize and actively pursue the fortification of their institutional governance mechanisms. This strategic approach is deemed crucial in efficaciously counteracting the escalation of capital flight. Specifically, a targeted focus on augmenting institutional governance practices, fostering transparency, fortifying anti-corruption measures, and intensifying counterterrorism efforts could collectively contribute to reducing capital flight tendencies. By undertaking these recommendations, South Asian governments can foster an environment of enhanced economic stability, attractiveness for investment, and sustainable growth, thereby deterring the adverse impact of capital flight while concurrently combatting the underlying challenges posed by terrorism and corruption.

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Section: Resultsmentioning

confidence: 99%

Investigating capital flight in South Asian countries: The dual influence of terrorism and corruption

Khan,

Abbass,

Qun

et al. 2024

PLoS ONE

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show abstract

“…The study used the Philip-Peron (PP) and augmented Dickey-Fuller (ADF) unit root tests to confirm that all the variables were integrated of order I [0] or [1]. To ensure that long-and short-run dynamics exist in the variable of interest, we ratify using the variable addition test in which the Fstatistics exceed the calculated value of Pesaran et al (2001).…”

Section: Discussionmentioning

confidence: 99%

Effect of Foreign Direct Investment on Private Domestic Investment in Ethiopia.

Wogari

2024

Preprint

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This study examines the effect of foreign direct investment (FDI) on private domestic investment in Ethiopia. This study employed annual time-series data from 1990 to 2019 for gross fixed capital formation, real gross domestic product, exchange rate, inflation, and foreign direct investment (FDI). This study adopted an autoregressive distributed lag (ARDL) approach and other econometric tools of analysis to answer the objectives set out in this study. The Augmented Dickey–Fuller test, Phillips–Perron unit root test, and bounds test method of cointegration employed indicate that the series used in the model are all stationary, with a unique long-run relationship established among the variables. The study also establishes an inverse relationship between FDI and private domestic investment within the period under reference. Using econometric procedures, the ADF unit root test revealed that some variables were integrated into the first difference. The ARDL test indicated the existence of long-run relationships among the variables. When testing for causality using the Granger causality test, the results obtained indicate that there is a unidirectional relationship between FDI and private domestic investment in Ethiopia, meaning that FDI causes private domestic investment in Ethiopia, while private domestic investment does not cause foreign direct investment. Based on the findings, the following recommendations were made: First, the concerned body should put in place policy with respect to domestic investment, and there must be safety measures to protect domestic investors from falling out of business and domestic investment promotion measures that will stimulate domestic firms’ investment. Second, in an attempt to control the birr exchange rate since it does have bearing on inflation, the government should put in place an enduring framework to strike the risk of domestic producers for them to take innovative domestic investors that will have a competitive advantage with foreign investors.

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“…Authors are aware that exchange rates can influence the total amount of F.D.I. (Mackton, Odondo, & Nyongesa, 2018;Adekunle, Abdulahi, Gbadebo, & Fakunmoju, 2019). According to the previous literature one set of researchers supports a negative relationship between exchange rate and F.D.I.…”

Section: Methodology and Samplementioning

confidence: 98%

Business environment and foreign direct investments: the case of selected European emerging economies

Vučković

Bobek

Maček

et al. 2020

Economic Research-Ekonomska Istraživanja

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The globalisation process of the world economy has led to increase of international capital mobility. In the last two decades, the level of foreign direct investments (F.D.I.) was significantly raised and in 2017 was US$1.8 trillion. The question occupying attention in economic literature is what the main motives and determinants of F.D.I. in certain countries are. This article aims to explore what are the linkages between business environment and inward F.D.I. The research was performed on the sample of five European emerging economies, located in Central and Eastern Europe (C.E.E.

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An Empirical Analysis of Effects of Foreign Direct Investment, Exchange Rate and Energy Infrastructure on Domestic Investment

Cited by 4 publications

References 10 publications

Investigating capital flight in South Asian countries: The dual influence of terrorism and corruption

Investigating capital flight in South Asian countries: The dual influence of terrorism and corruption

Effect of Foreign Direct Investment on Private Domestic Investment in Ethiopia.

Business environment and foreign direct investments: the case of selected European emerging economies

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