Nonlinear relationship between institutional factors and FDI flows: Dynamic panel threshold analysis

Kurul, Zühal

doi:10.1016/j.iref.2016.12.002

Cited by 59 publications

(43 citation statements)

References 39 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…As for institutions, a number of studies highlight the role of various institutions in encouraging FDI. The results of different scholars have been converging to show the significant impact of the following institutions: (1) corruption (e.g., Habib and Zurawicki 2002;Barassi and Zhou 2012), (2) governance and regulatory institutions (e.g., Globerman and Shapiro 2002;Daude and Stein 2007;Bénassy-Quéré et al 2007;Kurul 2017), (3) secure property rights (e.g., Ali et al 2010;Li and Resnick 2003), (4) political institutions (civil and political rights)…”

Section: Disentangling the Impact Of Culture And The Modelmentioning

confidence: 99%

The impact of culture on FDI disentangled: separating the “level” and the “distance” effects

Kapás

Czeglédi

2020

Econ Polit

View full text Add to dashboard Cite

The most important concern of this paper centers on the question of whether the difference in inward FDI across countries is a result of the fact that destination countries have different cultures, or the fact that they are more distant culturally from the origin country than others? We argue that answering this question requires disentangling the impact of culture, which consists of separating two effects: the "level" (the former) and the "distance" effect (the latter), which are mixed in the literature, leading in this way to biased conclusions in relation to how cultural distance matters for FDI. In this paper we propose an econometric method to separate the two effects of the culture, in which the key is that cultural distance does not depend on the origin country's culture. Our empirical results indicate a "strong" level effect in the sense that it is a working effect in the case of all the three cultural values we use, and its size is economically significant, as well. The distance effect, however, is at best as important as the level effect but very probably less so, accordingly, it seems that the literature has "overemphasized" the impact of cultural distance.

show abstract

Section: Disentangling the Impact Of Culture And The Modelmentioning

confidence: 99%

The impact of culture on FDI disentangled: separating the “level” and the “distance” effects

Kapás

Czeglédi

2020

Econ Polit

View full text Add to dashboard Cite

show abstract

“…Institutional quality is crucial to attract FDI (Kurul, 2017). Good governance of a country, for instance, political stability, regulatory quality and control of corruption are the prerequisite for attracting FDI inflow (Kaufmann et al, 2011).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The literature from previous studies shows that there is a link between institutional quality and FDI (Ahmad and Ahmed, 2014;Asif and Majid, 2017;Aziz, 2017). Some studies found a positive relationship between institutional quality and FDI (Aziz, 2017;Buchanan et al, 2012;Kurul, 2017). Aziz (2017) investigated the influence of institutional quality on FDI by considering Arab countries between 1984 and 2012 and found a substantial positive association between them.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Aziz (2017) investigated the influence of institutional quality on FDI by considering Arab countries between 1984 and 2012 and found a substantial positive association between them. Kurul (2017) examines the effect of institutional quality on FDI by using panel threshold methodology and considers the developing countries. The author finds a positive relationship between institutional quality and FDI after attaining a certain threshold level of institutional quality.…”

Section: Literature Reviewmentioning

confidence: 99%

“…While the focus variables in this study are FDI and institutional stability, other macroeconomic variables were also included in the JEFAS 24,47 model, namely, gross national product (GNP), inflation and exports. These variables were chosen based on similar studies that have been conducted by other authors (Ahmad and Ahmed, 2014;Asif and Majid, 2017;Aziz, 2017;Kurul, 2017).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Foreign direct investment and institutional stability: who drives whom?

Mahmood

Shakil

Akinlaso

et al. 2019

JEFAS

View full text Add to dashboard Cite

Purpose The purpose of this paper is to examine the relationship between foreign direct investment (FDI) flows and institutional stability. The focus country is Canada. It is one of the few countries where the economy remained relatively stable compared to other economies during the Global Financial Crisis. It is crucial for Canada to determine the optimal level of institutional development to attract more FDI and sustain the sound financial stability in future. Design/methodology/approach This study uses the auto-regressive distributive lag (ARDL) approach to understand the relationship between FDI and institutional stability along with other controlled variables, for instance, gross national product, inflation and exports. Findings The key finding of this work is that FDI and institutional stability are cointegrated in the long run. The error correction model of ARDL shed light on institutional stability being an exogenous variable, and FDI is an endogenous variable. Institutional stability affects FDI, as it is exogenous. The findings will help policymakers to implement policies to strengthen the institution’s settings, and this, in turn, will attract more investment. Originality/value Based on previous theoretical and empirical literature, most of the research points to FDI positively affect institutional stability. In some cases, the relationship does not always hold true. This study will fix the gap in the literature by investigating the relationship between FDI and institutional stability of Canada.

show abstract

Institutional Capacity, Trade and Investment in African Economies

Wanjiru¹,

Prime

2019

The Handbook of Global Trade Policy

View full text Add to dashboard Cite

Nonlinear relationship between institutional factors and FDI flows: Dynamic panel threshold analysis

Cited by 59 publications

References 39 publications

The impact of culture on FDI disentangled: separating the “level” and the “distance” effects

The impact of culture on FDI disentangled: separating the “level” and the “distance” effects

Foreign direct investment and institutional stability: who drives whom?

Institutional Capacity, Trade and Investment in African Economies

Contact Info

Product

Resources

About