Does Foreign Direct Investment (FDI) Really Matter in Developing Countries? The Case of Egypt

Masry, Mohamed

doi:10.5430/rwe.v6n4p64

Cited by 4 publications

(4 citation statements)

References 26 publications

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“…This implies that the larger the capital size of FDI firms, the less linkage they have with Vietnamese domestic firms. This result is consistent with the mentioned theory and similar to previous studies, such as Masry (2015).…”

Section: Model Resultssupporting

confidence: 94%

Determinants of linkages between foreign direct investment firms and domestic firms in Vietnam

Tuan¹

2021

Int. j. adv. appl. sci.

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Foreign direct investment (FDI) is an important sector of many developing economies in general and of Vietnam in particular. In Vietnam, the FDI sector contributed up to 27.7% of the average economic growth rate of 6.0% per year from 2010 to 2018. Besides this contribution, operations of FDI in Vietnam reveal many limitations, the most noticeable of which is the weak linkage between FDI and Vietnamese firms. This article examines determinants of FDI-domestic firms linkage in Vietnam. This research looks at all three types of linkage, including horizontal linkage, vertical linkage, and supply-backward linkage. Factors that have a positive impact on linkages are provincial economic growth, firms’ technology level, regional factors, being located in industrial zones, and operating in the manufacturing sector. Macroeconomic instability has a negative impact on linkage. The quality of economic governance, as measured by the Provincial Competitiveness Index, is important for attracting FDI, but does not affect linkages.

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Section: Model Resultssupporting

confidence: 94%

Determinants of linkages between foreign direct investment firms and domestic firms in Vietnam

Tuan¹

2021

Int. j. adv. appl. sci.

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“…Therefore, this works to correct labor market imbalances and build new productive capacities, in order to achieve the ultimate goals of the economic policies of growth and economic prosperity. Over the last two decades, foreign direct investment (FDI) funds from developing countries have grown at an annual average higher than those from developed countries, and their outward stock has increased more than 15 percent of the world's outward stock of FDI compared to less than 10 per cent in the 1990s [8,9]. Globally, foreign direct investment plays an important role in transferring the new technology to the host country and accordingly leads to higher productivity and economic growth.…”

Section: Introductionmentioning

confidence: 99%

Are Technological Innovation and Foreign Direct Investment a Way to Boost Economic Growth? An Egyptian Case Study Using the Autoregressive Distributed Lag (ARDL) Model

2021

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Both technological innovation and foreign direct investment have received widespread attention in the literature on their role in promoting economic growth. Therefore, this study aims to test the relationship between foreign direct investment, technological innovation, and economic growth of the Egyptian economy during the period between 1990–2019 using the autoregressive distributed lag model simultaneous integration test. Our findings show of the ARDL (Autoregressive Distributed Lag) model estimation a joint complementary relationship between the rate of growth of per capita gross domestic product (GDP) in US dollars and the independent variables in the model in the long and short term, which are statistically significant results. We found a positive significant relationship between the variables of incoming foreign direct investment and share of total capital formation in economic growth. Therefore, in the long term, the rate of inflation and the innovation index had a negative impact in the long term and the speed of adjustment towards equilibrium was very large, as it was estimated at 1.5 years (1/0.651). Furthermore, the study also provides valuable lessons and a strategic vision for the Egyptian government, which aspires to advance technology and attract more foreign direct investment.

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“…By analyzing the impact of FDI on host country economic growth, Agrawal (2015), Agrawal and Khan (2011), Iamsiraroj and Ulubaşoğlu (2015), Soltani and Ochi (2012) have found positive significant relationship while Akinlo (2004), Azman-Saini et al (2010), Masry (2015) have found weak connection. Furthermore, Herzer et al (2008) challenged the common belief of the positive impact of FDI on economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

“…According to the economic literature, the relationship between FDI and economic growth is ambiguous. Some researchers have found significant positive association (Agrawal, 2015;Bengoa & Sanchez-Robles, 2003;Fedderke & Romm, 2006;Hansen & Rand, 2006) between FDI and host country economic growth while some others have found weak or insignificant relationship (Belloumi, 2014;Haruna Danja, 2012;Masry, 2015). Hence, the sign and the level of significance of the coefficient of FDI with industrial sector performance have to be tested empirically in the Sri Lankan context.…”

Section: Data Sources and Variable Descriptionmentioning

confidence: 99%

The Effect of Foreign Direct Investment on Industrial Sector Growth: Evidence from Sri Lanka

Samantha

Liu²

2018

JAD

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The development of the industrial sector stimulates economic growth and development by reducing poverty and regional disparity, increasing export income, generating quality employment, as well as developing technological capabilities and productive capacities. It has been more than four decades since removing trade-related barriers, and tax incentives liberalized the Sri Lankan economy offered to foreign investors to attract FDI and promote the industrial sector. Hence, the objective of this study is to investigate the relationship between inward FDI and industrial sector performance of Sri Lanka at the aggregate level for the period 1980-2016. We use the Auto Regressive Distributed Lag (ARDL) model to identify the long-run relationship and short-run dynamics of the selected variables. ARDL bounds test verifies the existence of co-integration among the selected variables. The study fails to find a significant relationship between FDI and industrial sector growth of Sri Lanka in the long run as well as in the short run. The attraction of vertically integrated FDI that consists with advanced technology and value-added production is one of the solutions for overcoming the issue of low technology and knowledge of Sri Lankan industrial sector. Sri Lankan FDI strategy associated with industrial sector should consider the pull and push factors related to recipient and source country respectively. To promote the industrial sector via FDI, the government policy should focus on attracting more FDI that could be channeled into those sectors that would contribute to national competitiveness.

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Does Foreign Direct Investment (FDI) Really Matter in Developing Countries? The Case of Egypt

Cited by 4 publications

References 26 publications

Determinants of linkages between foreign direct investment firms and domestic firms in Vietnam

Determinants of linkages between foreign direct investment firms and domestic firms in Vietnam

Are Technological Innovation and Foreign Direct Investment a Way to Boost Economic Growth? An Egyptian Case Study Using the Autoregressive Distributed Lag (ARDL) Model

The Effect of Foreign Direct Investment on Industrial Sector Growth: Evidence from Sri Lanka

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