Revisiting endogeneity among foreign direct investment, economic growth and stock market development: Moderating role of political instability

Hoque, Mohammad Enamul; Akhter, Tahmina; Yakob, Noor Azuddin

doi:10.1080/23322039.2018.1492311

Cited by 15 publications

(4 citation statements)

References 75 publications

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“…This is evidenced by Hoque et al who studied the relationship between an unstable political system and foreign direct investment showing that political system instability has a negative effect on foreign investment, thereby slowing down growth. (Hoque et al, 2018) These findings prove to us the importance of a stable political system such as the quality of regulations, rule of law, and corruption control so that investors feel safe and are interested in placing their funds in a country.…”

Section: Political Systems Macroeconomics and Economic Growth In Isla...mentioning

confidence: 93%

Macroeconomic Effects on Economic Growth in Muslim Countries: Political System as A Moderating Variable

Arohman,

Qoyum,

Ihsan

et al. 2023

Ekonomika Syariah

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This study seeks to explore the role of the political system in supporting the influence of macro variables on economic growth in the world's Islamic countries. Data obtained from the world bank during 2010-2021. The econometric model used in the research is the Generalized Method of Moments (GMM). The main finding is that the political system has a significant negative effect on growth. This negative effect is caused by the low value of the political index determined by world governance indicators. In addition, foreign direct investment and remittances are still the main variables in supporting economic growth in the Islamic countries of the world. In contrast, interest rates show negative effects on economic growth. Further results show that an ineffective political system is unable to strengthen the relationship between foreign direct investment, remittances, and interest rates on economic growth. These findings serve as an evaluation for the 2025 OIC internal implementation action program.AbstrakStudi ini berusaha untuk mengeksplorasi peran dari sistem politik dalam mendukung pengaruh variabel makro terhadap pertumbuhan ekonomi di negara Islam dunia. Data diperoleh dari world bank selama tahun 2010-2021. Model ekonometrika yang digunakan dalam penelitian ialah generalized method of moments (GMM). Adapun temuan utamanya ialah sistem politik berpengaruh negatif signifikan terhadap pertumbuhan. Efek negatif ini disebabkan dengan rendahnya nilai indeks politik yang ditentukan oleh world governance indicators. Selain itu, investasi asing langsung dan remitansi masih menjadi variabel utama dalam mendukung pertumbuhan ekonomi di negara-negara Islam dunia. Sebaliknya, tingkat suku bunga menunjukkan efek negatif terhadap pertumbuhan ekonomi. Hasil selanjutnya ditunjukkan bahwa sistem politik yang tidak efektif tidak mampu memperkuat hubungan antara investasi asing langsung, remitansi, dan tingkat suku bunga terhadap pertumbuhan ekonomi. Temuan ini menjadi evaluasi untuk program aksi OKI 2025 yang saat ini masih berlangsung.

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Section: Political Systems Macroeconomics and Economic Growth In Isla...mentioning

confidence: 93%

Macroeconomic Effects on Economic Growth in Muslim Countries: Political System as A Moderating Variable

Arohman,

Qoyum,

Ihsan

et al. 2023

Ekonomika Syariah

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“…In the short run, the effects of stock market development (SMD), stock market value, and market conditions on economic growth (GDP) are all significant, although trade openness is not. Hoque et al (2018) examined the endogeneity of FDI, economic growth (GDP), and stock market development (SMD) and the moderating role of political instability in the relationship between these three variables. To test the hypotheses, the research uses selected data on macroeconomic variables from 1993 to 2016 using the Auto Regressive Distributed Lag (ARDL) method and the hierarchical regression method.…”

Section: Empirical Literaturementioning

confidence: 99%

The Impact of Stock Market Development on Economic Growth a Case of Malaysia

KHAIRUNNISA ZULKIFLI,

Safian,

MOHD RADZIL

et al. 2024

IMBR

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The stock market is important among many financial markets. Stock Market Development is one of the enabling factors for Economic Growth. The recession crisis occurred a few times and badly affected Malaysia's Economic Growth (GDP) and Stock Market Development (SMD). Also, during the recent pandemic of COVID-19, there was a different reaction by investors and individuals overall towards the economy in Malaysia. There were inconsistent trends when the global recession in 2008 happened and COVID-19 started to spread in Malaysia for both SMD and GDP. This study aims to determine the relationship between SMD and GDP in Malaysia. Using Market Capitalization (MCAP) (as a proxy to (SMD)), Exchange Rate (EXC) and Trade Openness (TRADE) as independent variables and GDP as the dependent variable. Data from 1981 to 2020 is analyzed using Granger causality, and the ARDL method along with applying the Endogenous Growth theory. The findings of the ARDL long-run test suggested that SMD and TRADE have a positive and statistically insignificant relationship with GDP. EXC has a negative and statistically significant relationship with GDP. Granger causality test suggested a bidirectional relationship between EXC and TRADE with GDP. There is a unidirectional causality between SMD and GDP where GDP Granger causes SMD. To improve market regulation, The government should ensure the stock market is well-regulated and transparent, boost investor confidence, and increase market investment. Encouraging trade openness and exports can also help increase exchange rates and boost ringgit's demand.

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“…по результатам анализа выявляются три основных фактора, характеризующих политическую нестабильность: нестабильность политического режима, протесты, насилие. более общая характеристика факторов политической неопределенности представлена в работе (Hoque, Akhter, 2018), где ее связывают с беспорядками и ростом массового насилия в целом. динамика изменения построенных индексов по санкциям (см.…”

Section: энср № 2 (85) 2019unclassified

Development of Russian Political Uncertainty Index (RPUI): Textual Analysis

Fedorova

Musienko

Fedorov

2019

Ekonomicheskaya nauka sovremennoy Rossii

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The article is devoted to the characteristics of political uncertainty and its influence on stock market. Intensification of political factors' pressure on financial market defined the necessity to set up an indicator that will assess the political uncertainty. For this purpose factors specifying the political uncertainty were found out on the basis of existing approaches – governor's personality, parliamentary elections, civil servants' change frequency, president's election, revolutions and political regime are among the factors.There are several indicators developed on the basis of the defined factors that give an assessment of the political uncertainty level. One of the most popular – Index of Economic Policy Uncertainty (EPU index) – is constructed in terms of text analysis method using the estimation of media coverage. This index became the background of developing the author's index of political uncertainty for Russian companies, which differs by analysis of a wider empirical basis and applying an extended dictionary of economic terms. In order to deepen research two indexes directed to Russia Sanctions analysis were also constructed. The high level of the developed political uncertainty index accuracy for Russia was proved during its testing on the empirical basis for period from 2013 to 2018 in comparison with EPU index. An inverse relation between the level of political uncertainty and stock index was also determined using econometric methods. Therefore, a negative influence of political uncertainty on Russian stock market was proved.

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Revisiting endogeneity among foreign direct investment, economic growth and stock market development: Moderating role of political instability

Cited by 15 publications

References 75 publications

Macroeconomic Effects on Economic Growth in Muslim Countries: Political System as A Moderating Variable

Macroeconomic Effects on Economic Growth in Muslim Countries: Political System as A Moderating Variable

The Impact of Stock Market Development on Economic Growth a Case of Malaysia

Development of Russian Political Uncertainty Index (RPUI): Textual Analysis

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