Quality of Institutions and Foreign Direct Investment in Developing Countries: Causality Tests for Cross‐country Panels

Hyun, Hea-Jung

doi:10.3846/16111699.2006.9636130

Cited by 34 publications

(24 citation statements)

References 12 publications

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“…The study also ascertained that foreign direct investment inflows accelerate economic growth in developing countries. Similarly, Hyun (2006) used a sample of 59 developing countries spanning 1984 to 1995 and employed ordinary least square method. The study found positive effect of foreign direct investment on economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

The Growth-Differential Effects of Domestic Investment and Foreign Direct Investment in Africa

Ijirshar

Anjande

Fefa

et al. 2020

CBN-JAS

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This paper employs dynamic panel models; Pooled Mean Group (PMG) and Mean Group (MG) estimators to assess the growth-differential effects of Foreign Direct Investment (FDI) and Domestic Investment (DI) among 41 selected African countries from 1970 to 2017. The result of Hausman test shows that PMG estimator is preferred. The study found that FDI and DI are important grease for growth of African countries in the long-run. The study also found that inflows of FDI crowds-in DI in Africa and that there is significant difference in the growth effects of foreign direct investment and domestic investment while the joint effects of foreign direct investment and domestic investment on growth of African countries is found to be statistically significant. In the short-run, estimates show that foreign direct investment has negative influence on growth of 24 countries out of which four (Benin, Madagascar, Nigeria and Equatorial Guinea) are highly significant at 5% level, while the estimated influence of domestic investment on growth of most African countries was positive. This shows that foreign direct investment in Africa has negative effects on growth of host economies in the short-run. The study recommends that African governments should continually encourage domestic savings and investment as major source of growth and only consider FDI as a growth supplement.

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Section: Literature Reviewmentioning

confidence: 99%

The Growth-Differential Effects of Domestic Investment and Foreign Direct Investment in Africa

Ijirshar

Anjande

Fefa

et al. 2020

CBN-JAS

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“…The positive role of institutional quality on economic development has been generally supported by numerous studies (Asiedu & Lien, 2011;Bénassy-Quéré, Coupet, & Mayer, 2007;Buchanan, Le, & Rishi, 2012;Cole, Elliott, & Zhang, 2009;Daniele & Marani, 2011;Globerman & Shapiro, 2002;Goswami & Haider, 2014;Hyun, 2006;Masron & Nor, 2013). Some studies (see Eichengreen & Tong, 2007;Liu, Chow, & Li, 2007;Ravenhill, 2006;Wang, Wei, & Liu, 2007;Yang, 2006) have suggested that because large countries have a larger market size -e.g., China's market is almost double that of the Association of Southeast Asian nations (ASEAN) markets combined -small improvements in institutional quality in small countries may be insufficient to offset the attractiveness of large countries.…”

Section: Introductionmentioning

confidence: 94%

Institutional Quality in Attracting Foreign Direct Investment to Small Countries

Masron

Naseem

Wahab

2018

MJES

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Institutional quality (IQ) has been proven by many studies as generating positive impact to economic development, including via luring more foreign direct investment (FDI) inflows. However, the inconsistent reality relating to FDI inflows and IQ of the host countries, especially in small countries has led this study to reexamine the effectiveness of IQ in promoting FDI inflows. Hence, selecting small countries in four regions located around four large countries, namely Brazil, Russia, India and China (BRIC) as a case study, results confirmed that the effectiveness of IQ is gradually eroded if IQ in BRIC is also relatively improved.

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“…A poor institutional environment therefore imposes additional costs for investors and higher risk premiums (Khanna and Palepu, 1997;Shleifer and Vishny, 1993). Risk premiums also associate ceteris paribus with investment flows, and many papers have revealed rather a positive relationship between the quality of a country's institutional setting and investment flows (Aizenman and Spiegel, 2006;Alfaro et al, 2005;Hyun, 2006;Wei, 2000). All studies imply that the institutional setting in terms of accounting regulation matters for the emerging markets' economic performance.…”

Section: Institutional Settings and Isomorphismmentioning

confidence: 99%

Patterns of institutional change - the case of accounting regulation in BRICS countries

Thies¹,

Tideman²,

Zimmermann³

2020

IJEA

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This leximetric study covers trends in a broad range of disclosure and enforcement activities in Brazil, Russia, India, China and South Africa (BRICS) countries from 1991 to 2017. Using institutional theory, we find increasing similarities between the five countries, explained by isomorphism. We also distinguish a pattern between the countries' use of disclosure and enforcement regulation. Disclosure leads enforcement, and enforcement remains less intense and more varied. Institutional rigidities and associated costs serve as an explanation.

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Quality of Institutions and Foreign Direct Investment in Developing Countries: Causality Tests for Cross‐country Panels

Cited by 34 publications

References 12 publications

The Growth-Differential Effects of Domestic Investment and Foreign Direct Investment in Africa

The Growth-Differential Effects of Domestic Investment and Foreign Direct Investment in Africa

Institutional Quality in Attracting Foreign Direct Investment to Small Countries

Patterns of institutional change - the case of accounting regulation in BRICS countries

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