Foreign direct investment into BRICS: an empirical analysis

Abstract

This paper examines empirically the role of selected macroeconomic variables in determining FDI inflows in the context of BRICS countries. The study employed the Pooled Mean Group (PMG) Auto-Regressive Distributive Lag (ARDL) method for annual dataset over the period 1994 to 2018. The findings of the study indicate that factors like GDP, trade openness, exchange rate, gross capital formation and availability of infrastructure facilities are significant in long run. The country-specific analysis for short run indicates that among BRICS, the FDI determining variables differ in each country. Among BRICS, China is the finest country with the significant and positive effects of examined variables in stimulating FDI inflows. As BRICS economies are facing challenge at the global level, the study suggested the need of adoption of liberal policies to attract more FDI along with growth promotion.

Do Foreign Direct Investment, Energy Consumption and Urbanization Enhance Economic Growth in Six ASEAN Countries?

“…The empirical result shows that the impact of FDI on economic growth is moderate. Compared with previous studies, this result is the same as the conclusion of Maryam and Mittal (2020) for BRICS countries, Erdal and Göçer (2015), for ten ASIAN developing nations. Indeed, FDI has changed several socio-economic fields in these countries.…”

“…Besides, the obtained outcome showed that economic freedom is a key determinant of effective FDI attracting policy. The conclusion of Hayrdaroglu (2016) is also confirmed by Maryam and Mittal (2020). Recently, Pradhan et al (2019) inspect the linkage between economic growth, stock market depth, trade openness, and FDI in 25 ASEAN regional forum countries.…”

What drives the inflow of FDI in OIC countries? Evidence from Top 10 hosts of inward FDI flows

“…Moreover, innumerable research has been widely discovered in several macroeconomy variables that affect FDI in various countries. Such as BRICS countries by Maryam and Mittal (2020), Select South Asian Countries by Sahoo and Sethi (2020), in Organisation for Economic Co-operation and Development (OECD) by (Cieślik, 2019), in Kosovo by Govori and Fejzullahu (2020), in Greece by Tsitouras et al (2020), in 23 countries by Canh et al (2019), German by Camarero et al (2019), India by Arul Provin Binny and Morarji (2019) and etcetera. Whereas, there still limited research that analyzes the specific variables which influence the FDI in OIC countries.…”

“…Therefore, several empirical literature reviews have assessed the relationship between GDP and FDI. Maryam and Mittal (2020) demonstrated that the increase of the market size of the host country, which measured by the higher GDP, would lead to a rise in FDI inflows in the context of Brazil, Russia, India, China, and South Africa (BRIS). Moreover, this study also assured that GDP is one of the potential factors in attracting FDI in the long-run period.…”

BRIC Bilateral Direct Foreign Investment Relations with South Africa: A Critical Review

“…South Africa joined the group in 2010 with the aim of growing the economy through improved trade and investment. However, extant literature reveals that there has been limited intra-BRICS investment owing to numerous challenges—mostly relating to policy, regulations and cooperation (Maryam 2020). Various BRICS summits have discussed these challenges with the aim of enhancing a conducive investment climate for member countries.…”