Nexus between Institutional Quality and Capital Inflows at Different Stages of Economic Development

Athari, Seyed Alireza; Adaoglu, Cahit

doi:10.1111/irfi.12169

Cited by 12 publications

(3 citation statements)

References 28 publications

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“…First, the findings recommend that policymakers and regulatory bodies should be paid more attention to the drivers of REN specifically economic openness. Based on previous studies' suggestions (e.g., Athari & Adaoglu, 2019; Athari et al, 2020), policymakers and regulatory bodies to attract cross‐border capital inflows should be improved the global competitiveness of their environments by enhancing pillars such as institution quality, infrastructure macroeconomic environment, goods and labor market efficiency, and market size. Environments with higher global competitiveness rankings could benefit by enormous inflowing cross‐border capital such as FDI, which could help finance renewable energy projects and eventually increase REN.…”

Section: Conclusion and Policy Recommendationsmentioning

confidence: 99%

The impact of financial development and technological innovations on renewable energy consumption: Do the roles of economic openness and financial stability matter in BRICS economies?

Athari

2023

Geological Journal

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There is a significant gap in comprehensively probing the determinants of renewable energy consumption (REN) in developing markets. Extant literature suggests the beneficial role of using renewable energy in diminishing carbon emissions and increasing environmental quality. This work addresses this gap and contributes by investigating the factors which significantly affect the REN in emerging economies. More specifically, the present study attempts to contribute by probing the effects of economic openness and financial stability on REN while considering the roles of financial development, technological innovations, and economic growth. To achieve this purpose, this study focuses on BRICS emerging countries, which are five massive and outstanding emerging economies of the globe, and uses both the fixed effects and quantile panel data approaches for yearly data between 2000 and 2021. Remarkably, the results reveal that economic openness and financial stability positively impact REN, implying that rising them helps achieve environmental sustainability. Moreover, the findings indicate the positive and significant role of financial development and technological innovations in increasing REN, whereas economic growth impacts adversely. The findings have essential recommendations for governments, policymakers, and regulatory bodies especially by focusing on the drivers of REN and attempting to maintain banking sector stability to increase REN and promote environmental sustainability.

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Section: Conclusion and Policy Recommendationsmentioning

confidence: 99%

The impact of financial development and technological innovations on renewable energy consumption: Do the roles of economic openness and financial stability matter in BRICS economies?

Athari

2023

Geological Journal

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“…The research conducted by Kim et al (2018) pointed out the role of regional vs. global savings in financing domestic investment, leading to increased international capital flows from 1980 to 2014 in 141 nations worldwide. Likewise, Athari and Adaoglu (2019) explored the various determinants of capital inflows for a sample of 135 countries across the globe at different stages of economic development, emphasizing the role of institutional quality, accountability, and corporate ethics. In another study, Athari et al (2020) investigated the role of a country's competitiveness on the cross-border flow of capital by using the global competitiveness index at different stages of economic development from 2006-2014 for 133 countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Does FDI Impact the Economic Growth of BRICS Economies? Evidence from Bayesian VAR

Malik,

Sah

2023

JRFM

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This paper examines the dynamic relationship between foreign direct investment (FDI), economic growth, and trade openness in BRICS countries. Our research aims to address a significant gap in the literature by focusing on this crucial group of emerging nations, given their substantial contribution to the global economy. Annual data for these economies from 1991 to 2020 were collected from various secondary sources. This study employed the Bayesian VAR framework to investigate the panel data. The Pedroni residual cointegration test was used to check the existence of a long-run relationship between FDI and economic growth. The results provided evidence that foreign direct investment (FDI) does exhibit a substantial correlation with economic growth in the short run. However, no long-run relationship was found in the case of BRICS economies. This research contributes to methodological innovation by introducing the Bayesian VAR framework, offering a deeper understanding of the dynamic interactions among these key variables. The incorporation of this framework yields estimates that are both stable and reliable, which is certainly a novelty of this paper. The findings of this study have implications suggesting that policymakers from these emerging economies should establish mechanisms that will monitor the short-term impacts of FDI and adjust policies accordingly to maximize economic gains. The government should tailor policies to the specific circumstances of each country for sustainable economic development.

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“…When the enterprise enters a host country with a higher institutional quality than the home country, it can formulate effective acquisition strategies by anticipating relevant issues in the acquisition process [30]. The institutional quality has a certain degree of impact on the capital inflow, and the magnitude of the institutional quality effect depends on the stage of economic development [31]. Furthermore, enterprise innovation will be affected by institutional differences and the OFDI mode choice [32].…”

Section: Introductionmentioning

confidence: 99%

Institutional Differences and the Choice of Outward Foreign Direct Investment Mode under the “Belt and Road” Initiative: Experience Analysis Based on China’s Manufacturing Enterprises

Xie

Yin

2023

Sustainability

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Based on 1692 outward foreign direct investment (OFDI) events of 735 A-share listed companies in China’s manufacturing industry from 2010 to 2019, this paper empirically examines the effect of investment motivation and the impact of institutional differences between China and the host country on the choice of OFDI entry mode; the paper also investigates the moderating effect of the “Belt and Road” Initiative (BRI) on Chinese manufacturing enterprises (CMEs) through use of the logit model. The empirical results show that, with greater institutional differences, CMEs become more inclined to choose cross-border mergers and acquisitions (M&A). Furthermore, a positive moderating effect of resource-seeking motivation on the choice of M&A OFDI by CMEs is observed. The signing of the “Belt and Road” cooperation document positively moderates institutional differences in promoting CMEs—especially state-owned CMEs—to choose the M&A mode. The “Belt and Road” Initiative provides an efficient supply system for OFDI by CMEs. This study enriches and extends existing institutional theories and provides suggestions for the promotion of the geopolitical pattern and international cooperation regarding the “Belt and Road” Initiative.

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Nexus between Institutional Quality and Capital Inflows at Different Stages of Economic Development

Cited by 12 publications

References 28 publications

The impact of financial development and technological innovations on renewable energy consumption: Do the roles of economic openness and financial stability matter in BRICS economies?

The impact of financial development and technological innovations on renewable energy consumption: Do the roles of economic openness and financial stability matter in BRICS economies?

Does FDI Impact the Economic Growth of BRICS Economies? Evidence from Bayesian VAR

Institutional Differences and the Choice of Outward Foreign Direct Investment Mode under the “Belt and Road” Initiative: Experience Analysis Based on China’s Manufacturing Enterprises

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