Does Global Economic Uncertainty Affect Foreign Direct Investment? Evidence From Asian Emerging Markets

Okunoye, Ismaila Adeleye; Akpa, Emeka; Boluwatife, Bamidele; Jimmy, Maxwell

doi:10.46557/001c.70295

Cited by 2 publications

(2 citation statements)

References 21 publications

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“…The result aligns with Haque et al (2022) that a 1% increasing uncertainty will decrease the FDI inflow, especially in 19 countries with higher incomes. According to Okunoye et al (2023), the effect of economic uncertainty on inward FDI to Asia is negative.…”

Section: Discussionmentioning

confidence: 99%

Role of Socioeconomic Uncertainty on Foreign Direct Investment (FDI) Inflows and Economic Growth in ASEAN

Marasanti,

Verico

2023

J. ASEAN Studies

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The interconnectedness begins with active trade and foreign investment flowing to the host country, making the economies in the world integrated into one another. Unfortunately, the rise of interconnectedness has sky-rocketed uncertainty. Economists then build the considered socioeconomic index, namely the World Uncertainty Index (WUI). This research aims to determine whether such an index can affect Foreign Direct Investment (FDI) inwards and economic growth, especially in ASEAN. We use yearly data of FDI inflows, economic growth, and WUI as a proxy for the global level of domestic uncertainty, inflation, and real effective exchange rate from 2015 to 2019 for each ASEAN member state. We estimate a System Generalized Method of Moments (Sys-GMM) to see the dynamic relationship and the short- and long-run effect of the socioeconomic uncertainty proxies with respect to FDI inflows and economic growth. The results show that the uncertainty index with respect to FDI inflows and growth has been negative and significant. Meanwhile, only FDI inflows sensitively respond to socioeconomic uncertainty in the long run, despite the growth for ASEAN member state.

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Section: Discussionmentioning

confidence: 99%

Role of Socioeconomic Uncertainty on Foreign Direct Investment (FDI) Inflows and Economic Growth in ASEAN

Marasanti,

Verico

2023

J. ASEAN Studies

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“…5 Pandemics and wars are sources of uncertainty as they pertain to FDI flows. Studies such as Ho and Gan (2021), Lee et al (2022), Zhan (2020), andOkunoye et al (2023) have shown that pandemics and pandemic uncertainties have significant negative effects on FDI flows in different parts of the world, but especially in developing and emerging countries. 6 In the same way, several studies have documented the impact of war on FDI.…”

Section: Introductionmentioning

confidence: 99%

Foreign Direct Investment in European and Eastern European Countries in the Face of COVID-19 and the Russian-Ukraine War

Okunoye,

Akpa

2023

Međunarodna politika

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The global shocks of COVID-19 and the Ukraine war on FDI inflows in European countries, particularly Eastern Europe, have been subjects of a serious debate among EU policymakers. This study assesses the level of impact of the two global shocks on FDI in 39 European countries (ECs) and 20 Eastern European countries (EECs) from 2020 Q1 to 2022 Q4. For the comparative analysis, a static panel regression is used. Our findings demonstrate that variations in the levels of stringency measures related to COVID-19 in individual countries are significantly associated with increased FDI inflows. This suggests that investors will increase investment in countries with stricter measures to limit crises. While variations in COVID-19 total cases are associated with increased FDI inflows in Europe but with decreased FDI inflows in Eastern Europe, we find that the crisis may have created new opportunities or incentives for foreign investors in Europe compared to Eastern Europe.

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Does Global Economic Uncertainty Affect Foreign Direct Investment? Evidence From Asian Emerging Markets

Cited by 2 publications

References 21 publications

Role of Socioeconomic Uncertainty on Foreign Direct Investment (FDI) Inflows and Economic Growth in ASEAN

Role of Socioeconomic Uncertainty on Foreign Direct Investment (FDI) Inflows and Economic Growth in ASEAN

Foreign Direct Investment in European and Eastern European Countries in the Face of COVID-19 and the Russian-Ukraine War

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