Causal Relationship between Economic Growth, Financial Deepening, Foreign Direct Investment and Innovation: Evidence from China

Islam, Mollah Aminul; Liu, Haiyun; Khan, Muhammad Asif; Sultanuzzaman, Reza; Yahia, Yassin Elshain; Nasrin, Layla

doi:10.18488/journal.aefr.2018.88.1086.1101

Cited by 18 publications

(13 citation statements)

References 68 publications

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“…Researchers claimed that foreign direct investment of a country depends on its financial development. However, this argument is not sufficient to generalize the fact (Mollah Aminul Islam et al, 2018;Nkoa, 2018;Sghaier & Abida, 2013). The inflows of FDI depend on a developed financial procedure with an efficient and transparent cost structure (Al Nasser & Gomez, 2009).…”

Section: Effects Of Financial Development In Attracting Fdimentioning

confidence: 98%

Financial development and foreign direct investment nexus: A systematic review of literature

Islam

Hossain²,

Khan³

et al. 2021

IJRBS

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In this study, we review the literature to find how the financial development of a country attracts foreign direct investments for a sustainable real sector development of the country. The area is least focused on literature. Thus we don’t limit our search and review to any time or database or journal category. We find the theoretical logic and empirical evidence so far available in the literature. Our review finds that the development of the financial sector of a country is one of the most important attractors of FDIs. Theoretically, financial sector development works as a symbol of trust and goodness to the new potential investors and a good resource allocation channel for the existing investors. However, very few researchers find that FDIs are more prone to countries with a low developed financial system which may happen due to the presence of risk-taker foreign investors and risk-averse domestic entrepreneurs.

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Section: Effects Of Financial Development In Attracting Fdimentioning

confidence: 98%

Financial development and foreign direct investment nexus: A systematic review of literature

Islam

Hossain²,

Khan³

et al. 2021

IJRBS

Self Cite

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“…As a result, it can be clearly understood that this index better represents the financial system of an economy. A few researchers (e.g., for example [32,63]) have recently recommended this index for empirical studies. The current study considers this index to be a proxy for the deepening of the financial system.…”

Section: Variables and Datamentioning

confidence: 99%

Financial Development and Foreign Direct Investment—The Moderating Role of Quality Institutions

et al. 2020

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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.

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“…The multidimensional nature of the FD enable to address the shortcomings of the conventional financial indicators; the ratio of domestic to GDP or the stock market capitalization to GDP, which were widely used in the previous studies. The FD was used in some recent works (Islam et al, 2018). The FD is disaggregated into nine indices; the financial institutions (FI) and financial markets (FM), which are further extended into -depth, access, and efficiency.‖ The indices FI and FM are jointly composed -overall index,‖ the FD index (Svirydzenka, 2016).…”

Section: Datamentioning

confidence: 99%

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2020

Asian Development Policy Review

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This study examines the impact of intra-export on the industrialization in the Common Market for Eastern and Southern Africa (COMESA) over the period 2000-2018. The study used a heterogeneous dynamic Autoregressive Distributed-lag (ARDL), namely Pooled Mean Group (PMG) and Mean Group (MG) estimators. The results reveal that intra-export (lnEXT), internet (lnINT), and Human Development Index (lnHDI) have significant positive effects on the industrialization (lnMVA) in the long-run. The financial development Index (FD) exhibits a significant adverse impact on the lnMVA in the long-run, while only the lnINT confirms a significant adverse impact on the lnMVA in the short-run. The results support the established theoretical framework, particularly the endogenous approach, as well as the supply-side and demand-side capacities. These findings may provide some guidance on policies and strategies harmonization to address the supply-side and demand-side capacities, namely, the infrastructure (e.g. INT), human development and to promote industrialization in the region, ceteris paribus. Contribution/ Originality: This study is one of very few studies which have investigated the impact of Intratrade on industrialization through including both some major supply-side (i.e. HDI, Internet) and demand-side (i.e. Financial Development) multidimensional-measurements factors. We control individual heterogeneity by using most robust econometric technique i.e. the pooled mean group (PMG).

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Causal Relationship between Economic Growth, Financial Deepening, Foreign Direct Investment and Innovation: Evidence from China

Cited by 18 publications

References 68 publications

Financial development and foreign direct investment nexus: A systematic review of literature

Financial development and foreign direct investment nexus: A systematic review of literature

Financial Development and Foreign Direct Investment—The Moderating Role of Quality Institutions

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