Global FDI Inflow and Its Implication across Economic Income Groups

Joshua, Udi; Rotimi, Mathew Ekundayo; Sarkodıe, Samuel Asumadu

doi:10.3390/jrfm13110291

Cited by 15 publications

(16 citation statements)

References 53 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Results from both the Fixed Effect (FE) and Random Effect (RE) show that FDI has a significantly positive effect on growth in all the regions at 5% significance level, except for RE in Southern Africa with 10% significance level. As earlier indicated, FDI leads to the transfer of technology and resultant productivity from foreign countries to host countries, thereby increasing the productive capacity of the host countries as justified by the positive coefficient of FDI for the regions in Sub-Saharan Africa as supported by Joshua et al (2020c) Consequently, the R-squared statistic is high and does suggest that the model contains variables that explain the changes in the dependent variable real per capita income.…”

Section: Resultsmentioning

confidence: 89%

“…A similar study for Asian economies by Goh et al 2017 showed the influence of FDI inflows in the region is uncertain. Similarly, Joshua et al (2020c) revealed that external debt is a key determinant of global economic growth. Joshua et al (2020c) indicated that external debt exhibits a positive and significant impact on economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Similarly, Joshua et al (2020c) revealed that external debt is a key determinant of global economic growth. Joshua et al (2020c) indicated that external debt exhibits a positive and significant impact on economic growth. In contrast, the existing literature found a negative impact of external debt on economic growth (See Moh'd AL-Tamimi and Mohammad 2019;Umaru et al 2013).…”

Section: Literature Reviewmentioning

confidence: 99%

“…In the literature, several studies have assessed the interaction between economic expansion and FDI (Joshua 2019;Joshua et al 2020c). In line with the Sustainable Development Goals, we utilize six data series from the World Bank (World Bank 2020) from 1990 to 2018 for the Sub-Saharan countries.…”

Section: Data Sourcementioning

confidence: 99%

See 3 more Smart Citations

Sustaining Economic Growth in Sub-Saharan Africa: Do FDI Inflows and External Debt Count?

Joshua

Babatunde

Sarkodıe

2021

JRFM

Self Cite

View full text Add to dashboard Cite

The quest for the attainment of economic development is sought after by all global economies, which by effect is expected to transcend to improving livelihoods and standard of living. However, several factors hinder the process of achieving sustained economic development, especially in developing countries. In this regard, assessing the extent of economic expansion orchestrated by foreign direct investment (FDI) inflows in vulnerable economies such as Sub-Saharan Africa (SSA), particularly in the face of the significant fall in global FDI inflow, is worthwhile. In essence, this study ascertains the impact of FDI inflows and external debt on economic growth amidst decline in FDI inflows and excessive foreign borrowings. The mixed order of integration from the stationarity test underpins the adoption of autoregressive distributed lag (ARDL) approach for data covering the period 1990 to 2018. The empirical results found FDI inflows play a crucial role in achieving economic expansion in the region. On average, FDI inflows, external debt, and foreign aids are more useful in expanding the economy compared to trade openness and exchange rate. Thus, this study recommends the need for SSA to open its economic borders for external capital, viz. FDI. A peaceful economic and political environment is a pre-condition to attract and maintain potential foreign investors. Stability in exchange rates is critical in achieving growth in FDI and other foreign resources. However, caution is required, especially in administration of external resources. Particularly, contracting external debt must strictly be driven by economic reasons rather than political motivation. Borrowed funds could be injected mainly into productive streams with the highest investment returns to boost economic development.

show abstract

Section: Resultsmentioning

confidence: 89%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Data Sourcementioning

confidence: 99%

See 2 more Smart Citations

Sustaining Economic Growth in Sub-Saharan Africa: Do FDI Inflows and External Debt Count?

Joshua

Babatunde

Sarkodıe

2021

JRFM

Self Cite

View full text Add to dashboard Cite

show abstract

“…He studied a new methodology for the Flows of Financial Capital in the form of Foreign Aid from Donor Countries, besides, this methodology allows (Cognitive Modeling) learning and proving the Impact of Financial Capital, Foreign Aid and other factors that affect the Economic Growth of the country [43,44].…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Foreign Aid on Economic Growth in Palestine: An Empirical Evidence

Badwan

Atta

2021

AJEBA

View full text Add to dashboard Cite

This study examines the Impact of Foreign Aid on Economic Growth in Palestine by considering time series data of the last twenty years from (2000-2019). Foreign Aid's Impact on the Palestinian Economy explored with the Gross Domestic Product (GDP) as the dependent variable against few selected independent variables such as Foreign Aid, Remittance, Investment, Labour Force and Lagged (GDP). This study used the Partial Adjustment Model to analyze the Impact of Foreign Aid on Economic Growth in Palestine and also applied the (Chow Test) to examine whether there was a Structural Breakthrough in the Palestinian Economy. The results indicate that Foreign Aid has a positive relationship with (GDP). However, the relationship is not significant since the higher volume of Foreign Aid used in Humanitarian and Social Welfare rather than Production Activities in the real sectors. (Chow Test) shows that the relationship between Foreign Aid (GDP) has not witnessed a Structural Breakthrough in the Palestinian Economy over the past twenty years. In light of these empirical results, we suggest that Government Policy-Makers and Decision-Makers allocate this Foreign Aid to Productive Sectors and Human Capital formation (HC) activities with a special focus on capital expenditures to achieve a high rate of the country's Economic Growth and Development and to meet the periodic plan and Long-Term Development goals.

show abstract

The impact of foreign direct investment on the economic development of emerging countries of the European Union

2021

View full text Add to dashboard Cite

Starting from the premise that the impact of foreign direct investment (FDI) on the economies of the host countries is different from one economy to another, the aim is to evaluate the impact of a set of economic and social indicators on FDI and net income (% GDP-Gross Domestic Product) in emerging, ex-socialist countries of the European Union. Using econometric models, we analysed the relationship between the evolution of the net FDI inflows and a number of statistical indicators. Our findings proved that there are similarities between the countries analysed, in terms of the evolution of net FDI inflows, with some differences being recorded for Hungary, where the evolution of net FDI inflows has major fluctuations. We found that the countries present both similarities and differences in terms of variables that affect FDI. The FDI net inflows (% GDP) are in seven, out of nine economies, positively influenced by GDP, as it follows: Bulgaria, Lithuania and Slovenia are FDI attractive by an increasing GDP rate, while Latvia, Poland and Romania react to a better GDP per capita. Hungary is the only one that is positively influenced by both GDP rate and GDP per capita. Moreover, a decreasing corruption perception index, country risk rating, income tax (% of commercial profit) and other taxes paid by companies (% commercial profit) can positively influence the inflows of FDIs in some of the analysed countries.

show abstract

Global FDI Inflow and Its Implication across Economic Income Groups

Cited by 15 publications

References 53 publications

Sustaining Economic Growth in Sub-Saharan Africa: Do FDI Inflows and External Debt Count?

Sustaining Economic Growth in Sub-Saharan Africa: Do FDI Inflows and External Debt Count?

The Impact of Foreign Aid on Economic Growth in Palestine: An Empirical Evidence

The impact of foreign direct investment on the economic development of emerging countries of the European Union

Contact Info

Product

Resources

About