The effect of macroeconomic instability on FDI flows: A gravity estimation of the impact of regional integration in the case of Euro-Mediterranean agreements

Chenaf-Nicet, Dalila; Rougier, Éric

doi:10.1016/j.inteco.2015.10.002

Cited by 37 publications

(10 citation statements)

References 80 publications

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“…The findings of Russ () are particularly pertinent for the debate concerning Brexit, as they highlight that not merely volatility in the real economy, but the source of that volatility is likely to impact on the relationship between currency fluctuations and FDI. This issue was explored in more detail by Chenaf‐Nicet and Rougier (). The analysis here is analogous to the analysis on gross capital flows.…”

Section: Overview Of the Foreign Direct Investment Time Series Literamentioning

confidence: 99%

Brexit and Foreign Investment in the UK

Driffield

Karoglou

2018

Journal of the Royal Statistical Society Series A: Statistics in Society

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Summary We explore the likely effect of Brexit on inward foreign direct investment (FDI) through its possible effect on the benchmark variables that characterize the macroeconomy. For this we propose the use of a Markov regime switching structural vector auto‐regression to distinguish between the volatile and stable states of the economy and account, among other effects, for the contemporaneous effects that the frequency of FDI innately generates. Our findings suggest that, if Brexit triggers a sterling depreciation in the current economic climate, this will fuel a prolonged negative effect on FDI. FDI flows may be positively affected (at most) by a sterling depreciation after Brexit only if this event drives the UK economy to a period of highly volatile growth, inflation, interest and exchange rates: a scenario that is rather unlikely. And, even then, the sterling depreciation benefits would last for only a short period of time.

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Section: Overview Of the Foreign Direct Investment Time Series Literamentioning

confidence: 99%

Brexit and Foreign Investment in the UK

Driffield

Karoglou

2018

Journal of the Royal Statistical Society Series A: Statistics in Society

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“…The monetary policy effectiveness is associated with the performance of the exchange rate regime (Bénassy-Quéré et al, 2001;Aubin et al, 2006;Choi and Jeon, 2007) and with lower inflation and interest rates (Coskun, 2001;Dabla-Norris et al, 2010). Only few studies underline the importance of macroeconomic stabilization (Wint and Williams, 2002;Albulescu and Ianc, 2016;Chenaf-Nicet and Rougier, 2016), of systemic financial stability (Albulescu et al, 2010), and of uncertainty (Tang et al, 2014) Indeed, there is a large variability between the EU countries regarding the uncertainty computed using long-term rates. However, in this case, the uncertainty is related to government bond yields, which are influenced by the sovereign risk.…”

Section: Introductionmentioning

confidence: 99%

The long-run impact of monetary policy uncertainty and banking stability on inward FDI in EU countries

Albulescu

Ionescu

2018

Research in International Business and Finance

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“…Unlike the USA’s marketization model (commodity dumping), China’s OFDI model is based on the investment climate such as energy and logistics infrastructure and politics that can actively attract China’s OFDI. Empirical results show that economics is an integral part of the US investment system (Chenaf-Nicet and Rougier, 2016 ; Holtbriigge and Kreppel, 2012 ; Das and Banik, 2015 ). energy, logistics, and politics have no significant impact.…”

Section: Resultsmentioning

confidence: 99%

The theoretical systems of OFDI location determinants in global north and global south economies

Liu

Zhu

et al. 2023

Humanit Soc Sci Commun

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With economic transformation and industrial development, Outward Foreign Direct Investment (OFDI) from southern countries has increased rapidly. The theoretical system established by global north countries with their dominant position in the international investment market has been impacted by global south countries. The existing OFDI theory has always been based on developed countries and can only explain some international investment behavior of southern countries. The Vector Error Correction Model (VECM) is applied to conduct empirical analysis for the impact of the target country’s investment climate on the location determinants of OFDI, by applying China and the United States as example which is focusing on 172 countries from 2005 to 2019. The results reveal significant differences in the theoretical system of foreign investment between China and the United States. For China, investment climate factors such as energy, logistics infrastructure, and politics are discover as the main drivers of China’s OFDI. However, USA’s OFDI is a corporate behavior aimed at economic interests. The differences in OFDI theoretical systems and provides policy advice for northern and southern countries and departments is the major contribution of this research.

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The effect of macroeconomic instability on FDI flows: A gravity estimation of the impact of regional integration in the case of Euro-Mediterranean agreements

Cited by 37 publications

References 80 publications

Brexit and Foreign Investment in the UK

Brexit and Foreign Investment in the UK

The long-run impact of monetary policy uncertainty and banking stability on inward FDI in EU countries

The theoretical systems of OFDI location determinants in global north and global south economies

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