Foreign Capital Inflow and Financial Crisis in a Dynamic Model

2015 ◽  
Author(s):  
Gopal K. Basak ◽  
Pranab Kumar Das ◽  
Allena Rohit
Keyword(s):  
Financial Crisis ◽  
Dynamic Model ◽  
Foreign Capital ◽  
Capital Inflow

Foreign Capital Inflow and Real Exchange Rate Appreciation in Developing Economies: Theory and Empirical Evidence

2014 ◽  
Vol 14 (03n04) ◽  
pp. 453-465
Author(s):  
Anindya Biswas ◽  
Biswajit Mandal ◽  
Nitesh Saha
Keyword(s):  
Exchange Rate ◽  
Global Economy ◽  
Foreign Capital ◽  
Factor Model ◽  
Developing Economies ◽  
Capital Inflow ◽  
Specific Factor ◽  
Export Sector ◽  
The Exchange Rate ◽  
Sectoral Composition

Foreign direct investment specially targeted to export sector is relatively new phenomenon in the global economy. Such inflow of foreign capital changes the sectoral composition of the economy, and it has some influence on the exchange rate of the destination country. In this study, we attempt to provide underlying theoretical and empirical explanations for exchange rate appreciation due to foreign capital inflow. We first use an extended three-sector specific factor model to explain analytically why and how an inflow of foreign capital boosts the price of a nontradable good that helps tilting the exchange rate in favor of the host country and then conduct an empirical analysis based on a panel dataset of 12 prominent developing countries over the time period 1980–2011 to substantiate our theoretical findings. We also strive to look at the possible consequences on factor prices and on sectoral de-composition of a representative economy.

scholarly journals Foreign Capital Inflow, Technology Transfer, and National Income

2001 ◽  
Vol 40 (1) ◽  
pp. 49-56 ◽  
Author(s):  
Sarbajit Chaudhuri
Keyword(s):  
Technology Transfer ◽  
Open Economy ◽  
Foreign Capital ◽  
Full Employment ◽  
Small Open Economy ◽  
National Income ◽  
Capital Inflow ◽  
Short Paper ◽  
Export Sector ◽  
Output Ratio

According to Jones and Marjit (1992), in a two-sector, full-employment model it is not possible to show that growth in the foreign capital employed in the export sector of a small open economy will lead to a fall in the welfare in the presence of a protected import-competing sector. In this short paper, we have shown that one may get the immiserising result even in this framework if the inflow of foreign capital into the export sector is accompanied by technology transfer, which leads to a fall in the labour-output ratio in this sector.

scholarly journals Capital inflows, exchange rate and agricultural output in Nigeria

2019 ◽  
Vol 5 (1) ◽  
Author(s):  
Fredrick Ikpesu ◽  
Abraham Emmanuel Okpe
Keyword(s):  
Exchange Rate ◽  
Foreign Capital ◽  
Public Capital ◽  
Capital Inflow ◽  
Capital Inflows ◽  
Private Capital ◽  
Agricultural Output ◽  
Long Run ◽  
The Government ◽  
Exchange Rate Depreciation

AbstractThe study applied the autoregressive distributed lag (ARDL) technique in investigating the effect of capital inflows and exchange rate on agricultural output in Nigeria between the periods 1981 and 2016. The technique was selected because the variables are integrated at both 1(1) and 1(0) and the sample size is considerably small. Variables used in the study are agricultural output (AO), private capital inflow (PRCI), public capital inflow (PUBCI), investment (INV), labor (L) and real effective exchange rate. Findings from the empirical research revealed that the variables are cointegrated. The research outcome also indicates that in the short run and long run, private capital inflow and public capital inflow positively affect the country agricultural output. The study also revealed that exchange rate depreciation would cause agricultural output to decline in the short and long run. Based on the research findings, it is recommended that the government should create an enabling and conducive environment to attract more inflows of foreign capital into the country to boost the agricultural output. Also, monetary authority should ensure the stability of the country’s exchange rate (Naira) since exchange rate depreciation affects agricultural output negatively. Furthermore, there is the need for the harmonization of foreign capital inflow policy and monetary policy by the government, taking into consideration the optimal level of capital inflow that will not have a detrimental effect on exchange rate so as to ensure sustainable growth in agricultural output.

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