scholarly journals OUTWARD FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN CHINA: EVIDENCE FROM ASYMMETRIC ARDL APPROACH

2018 ◽  
Vol 19 (5) ◽  
pp. 706-721 ◽  
Author(s):  
Usman Ali ◽  
Wei Shan ◽  
Jian-Jun Wang ◽  
Azka Amin
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Annual Data ◽  
Symmetric Model ◽  
Outward Foreign Direct Investment ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Short Run ◽  
Overseas Investment

The current study explored the dynamics between economic growth and overseas investment, using time series annual data from China. For empirical analysis, we utilized asymmetric ARDL technique, which documents the potential asymmetric effects of outward foreign direct investment on economic growth in both the long run and short run. The empirical results suggest that ignoring the intrinsic asymmetries may conceal the true information about the equilibrium relationship among the variables and thus lead to misleading results. Particularly, the findings revealed that economic growth in China responds positively but differently to an increase and decrease in its overseas investment. The empirical evidence obtained through asymmetric model seemed to be superior to that of symmetric model and thus leads to more efficient policymaking to achieve sustainable economic development. Our study contributes to the existing literature by providing new insights on the outward foreign direct investment-led growth hypothesis. The findings suggest that firms investing abroad can bring source country benefits by securing access to key input factors and accessing advanced foreign technology.

scholarly journals How do Foreign Direct Investment and Growth Interact in India?

2015 ◽  
Vol 2 (2) ◽  
Author(s):  
Gurmeet Singh
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Gross Domestic Product ◽  
Granger Causality ◽  
Foreign Exchange ◽  
Direct Investment ◽  
Foreign Exchange Reserves ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Short Run

The study investigates the relationships between the FDI and economic growth, namely, Gross Domestic Product, exports and foreign exchange reserves over the period 1994 to 2013. Johansen’s co-integration and vector error correction model have been applied to explore the long-run equilibrium relationship between foreign direct investment and economic growth. The analysis reveals that economic growth and the foreign direct investment are co-integrated and, hence, a long-run equilibrium relationship exists between them. It is observed that the foreign direct investment is positively related to gross domestic product and foreign exchange reserves but negatively related to exports. Exports are found to be insignificant in determining FDI. In the Granger causality sense, FDI causes GDP in both long run and short-run. No bidirectional causality is observed between any variables under study. Furthermore, the findings of VECM and Granger Causality test show that FDI creates a long run relationship with economic growth but in short run no causality is found between FDI, exports and foreign exchange reserves.

An Empirical Investigation of India’s Outward Foreign Direct Investment: A Macro Perspective

2019 ◽  
Vol 5 (2) ◽  
pp. 79-88
Author(s):  
Dikshita Kakoti
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Real Effective Exchange Rate ◽  
Outward Foreign Direct Investment ◽  
Fdi Inflows ◽  
Long Run ◽  
Increasing Trend ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate

Since 1990, globalization of Indian economy led to a speedy growth of foreign direct investment (FDI) inflows and simultaneously outward foreign direct investment (OFDI) also shows an increasing trend. However, India’s OFDI has attracted a little attention from the researchers and they have considered the OFDI in terms of commitments or approved equities. The motivation of this article is to investigate the India’s macro factors influencing actual OFDI flows from India by empirically recognizing four factors, namely gross domestic product, inward FDI, real effective exchange rate, and real interest rate over the period 1980–2016. The study has used Augmented Dicky-Fuller (ADF) and Phillips–Perron (PP) Unit root tests for checking the stationarity of the variable of the model. Later on, autoregressive distributive lag (ARDL) model and error correction mechanism is used for testing the long-run as well as short-run dynamics of the model. The result shows that all the selected variables have positive and significant influence on India’s outward investment flows.

scholarly journals Dynamic Causal Relationships among GDP, Exports, and Foreign Direct Investment (FDI) in the Developing Countries

2013 ◽  
Vol 14 ◽  
pp. 1-19 ◽  
Author(s):  
Mohsen Mehrara ◽  
Amin Haghnejad ◽  
Jalal Dehnavi ◽  
Fereshteh Jandaghi Meybodi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Strong Evidence ◽  
Direct Investment ◽  
The Other ◽  
Fdi Inflows ◽  
Long Run ◽  
Short Run ◽  
Growth Hypothesis

Using panel techniques, this paper estimates the causality among economic growth, exports, and Foreign Direct Investment (FDI) inflows for developing countries over the period of 1980 to 2008. The study indicates that; firstly, there is strong evidence of bidirectional causality between economic growth and FDI inflows. Secondly, the exports-led growth hypothesis is supported by the finding of unidirectional causality running from exports to economic growth in both the short-run and the long-run. Thirdly, export is not Granger caused by economic growth and FDI inflow in either the short run or the long run. On the basis of the obtained results, it is recommended that outward-oriented strategies and policies of attracting FDI be pursued by developing countries to achieve higher rates of economic growth. On the other hand, the countries can increase FDI inflows by stimulating their economic growth.

scholarly journals ANALISIS PENGARUH REMITANSI, INVESTASI ASING LANGSUNG, IMPOR DAN PERTUMBUHAN EKONOMI DI INDONESIA

2020 ◽  
Vol 2 (4) ◽  
Author(s):  
Regina Septriani Putri ◽  
Ariusni Ariusni
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Positive Impact ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
Positive Effect

Abstract : This study examined and analysis the effect of remittances, foreigndirect investment, imports, and economic growth in Indonesia in the long run andshort run. This study using Error Correction Model (ECM) method and using theannual time series data from 1989 to 2018. This study found that: (1) remittancehave an insignificant positive effect on economic growth in the long run and shortrun,(2)foreign direct investment have a significant positive impact on economicgrowth in the long run and short run, (3) import have an insignificant positiveimpact on economic growth both in the long run and short run. To increase theeconomic growth in the future, this study suggests the government to decresingimports of consume goods and increasing the inflow of capital goods, rawmaterial goods, remittances and foreign direct investment.Keyword : Remittance, Foreign Direct Investment, Import, Economic Growth andECM

scholarly journals Foreign Direct Investment, Trade and Economic Growth: A New Paradigm of the BRICS

2015 ◽  
Vol 9 (12) ◽  
pp. 32 ◽  
Author(s):  
Akhilesh Chandra Prabhakar ◽  
Muhammad Azam ◽  
B. Bakhtyar ◽  
Yusnidah Ibrahim
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Regional Integration ◽  
Direct Investment ◽  
New Paradigm ◽  
Fdi Inflows ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Development Context ◽  
Sustainable Equilibrium

<p class="zhengwen"><span lang="EN-GB">The present study begins by surveying broadly supports the assertion that regional integration in the case of the BRICS is not adequately paid attention except with very few original or significant contributions. This research examines the existing pattern in the areas of trade and investment with a view to locate in the development context. It was also essential to make a theoretical investigation on literature of trade along with the empirical one. The survey broadly supports the frequent, through usually undocumented, assertion that BRICS was an area had tended to neglect and to which they had made few if any original or significant contributions. Alongside, this study panel data on BRICSs, where the results confirm that foreign direct investment (FDI), trade and economic growth indicate the presence of long-run sustainable equilibrium relationship between them. It is thus important that policymakers to remove obstacles to FDI inflows and improve the respective absorptive capacity in order to reap maximize positive growth effects. This study also discussed that how China performed well through attracting FDI inflows and maintained trade balance. </span></p>

scholarly journals Causal Relationship between Foreign Direct Investment and Economic Growth in Nigeria: 1970-2013

2015 ◽  
Vol 7 (11) ◽  
pp. 230 ◽  
Author(s):  
Uwazie I. U. ◽  
Igwemma A. A. ◽  
Nnabu Bernard Eze
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Unit Root ◽  
Direct Investment ◽  
Developing Economies ◽  
Unit Root Test ◽  
Annual Data ◽  
Policy Reforms ◽  
Causality Test ◽  
Long Run

Foreign direct investment is presumed to play immense role in economic growth in both developed and developing economies. This assumption has motivated the army of studies to actually determine the nexus between foreign direct investment and economic growth in Nigeria. But these studies were not unified on the direction of the causation, hence the need for the study. To effectively analyze the result, the study employs vector error correction model method of causality to analyze the annual data for the periods of 1970 to 2013. The Augmented Dickey-Fuller (ADF) unit root test show presence of unit root at level but stationary after first difference. The Johansen cointegration test confirms that the variables are cointegrated while the granger causality test affirms that foreign direct investment and economic growth reinforce each other in the short run in Nigeria. Also, it is reported that foreign direct investment granger cause economic growth both in the short and long run in Nigeria. Based on these findings, the study advocates the adoption of aggressive policy reforms to boost investors’ confidence and promotion of qualitative human capital development to lure FDI into the country. It also suggests the introduction of selective openness to allow only the inflow of FDI that have the capacity to spillover to the economy. These will attract FDI and boost economic growth in Nigeria.

scholarly journals Foreign Direct Investment and Trade Components in Context of Pakistan

2016 ◽  
Vol 12 (34) ◽  
pp. 384 ◽  
Author(s):  
Muhammad Akram Gilal ◽  
Khadim Hussain ◽  
Muhammad Ajmair ◽  
Sabahat Akram
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Annual Data ◽  
Investment Liberalization ◽  
Long Run ◽  
Short Run ◽  
The Impact

Objective of this paper was to evaluate the impact of foreign direct investment (FDI) on trade components (exports and imports) of Pakistan using annual data from 1975 to 2013. Engle and Granger two step cointegration method was used for conducting the analysis. This method was adopted because all the variables of interest were non stationary in level and stationary at first difference. Results provide evidence of long run cointegrating relationship as well as short run relationship between FDI and trade components. A rise in FDI causes both exports and imports to increase. Based on these empirical findings, we strongly recommend Government of Pakistan to focus on the strategy of investment liberalization as well as trade openness.

scholarly journals How Trade Openness and Foreign Direct Investment Affect Economy of Pakistan

2021 ◽  
Vol 11 (2) ◽  
pp. 1641-1653
Author(s):  
Noreen Safdar
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Trade Openness ◽  
Time Span ◽  
Independent Variables ◽  
Long Run ◽  
Short Run ◽  
The Growth Of Economy

This study is intended to find out how and to what extent FDI and trade openness affect the growth of economy in Pakistan for time span 1980-2018. To examine influence of FDI and trade openness, GDP was used by way of dependent variable whereas FDI, trade openness, exchange rate, and inflation are also taken as independent variables. The ARDL technique is employed in following study to estimate short-run and long-run results. This study concludes that TO have a positive momentous influence on GDP in both long and short run. While Foreign Direct Investment has an optimistic but irrelevant influence on GDP in Pakistan which demonstrates that TO has a more progressive influence on GDP of Pakistan than FDI. Other variables labor force and inflation harm economic growth while the exchange rate affects GDP positively. It is suggested by the study to enhance economic growth, govt should focus on liberalization of trade by reducing tariffs, customs duties, and other types of taxes on exports to enhance the economic growth of Pakistan.

scholarly journals Examining the impact of Exports and Exchange rate on Economic Growth of Turkey

2020 ◽  
Author(s):  
Iftikhar Muhammad ◽  
Malik Shahzad Shabbir
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Granger Causality ◽  
Direct Investment ◽  
Economic Policies ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
The Impact

Abstract Purpose This study intends to analyze the long-run and short-run relationships along with the identification of causal links between exports, economic growth, and exchange rate in Turkey. Data/Design: This study uses auto-regressive distributed lags (ARDL) and Granger causality over time series monthly data from the year 2010–2018. The results indicate that exports are significantly positively related to economic growth while the exchange rate is found to be negatively related to economic growth. Findings: Moreover, findings from the test of Granger causality indicate that a unidirectional causal association is found from exports to foreign direct investment and economic growth and from economic growth to foreign direct investment. The Granger causality results indicate that an increase in exports accelerates the economic growth of Turkey and a change in growth rate and exchange rate leads to a change in foreign direct investment. Originality of work: The overall findings suggest that exports should be promoted along with the liberal-investment economic policies to boost the overall economic growth in Turkey.

scholarly journals The Symmetric and Asymmetric impact of FDI Inflows, Economic growth, and Capital Investment on CO2 Emission in Oman-Evidence from ARDL and NARDL Approach

2021 ◽  
Author(s):  
Ishfaq Hamid ◽  
Md Shabbir Alam ◽  
Muntasir Murshed ◽  
Pabitra Kumar Jena ◽  
Nadia Sha ◽  
...  
Keyword(s):  
Economic Growth ◽  
Carbon Dioxide ◽  
Foreign Direct Investment ◽  
Carbon Dioxide Emissions ◽  
Direct Investment ◽  
Capital Investment ◽  
Symmetric Model ◽  
Causality Test ◽  
Long Run ◽  
Bound Test

Abstract This study examines the symmetric and asymmetric nexus between capital investment, economic growth, foreign direct investment, and CO2 emissions in Oman during 1980- 2019. For this purpose, we applied ARDL Model for linear cointegration and NARDL model for nonlinear cointegration between capital investment, economic growth, foreign direct investment, and CO2 emissions. The bound test shows the long-term equilibrium relationship among CO2 emissions, capital investment, economic growth, and FDI in both models. The error correction mechanism demonstrates that CO2 emissions congregate to their long-run equilibrium level at a 50.1 percent annual pace of adjustment by integrating capital investment, economic growth, and FDI under the symmetric model. The causality test results show that carbon emissions and FDI, economic growth, and CO2 emissions exhibit bidirectional causal links. While, on the other hand, unidirectional causal links are running from capital investment to GDP. The asymmetric results show that positive shocks to FDI and economic growth have significant tumbling consequences on Oman's carbon dioxide emissions.In contrast, negative shocks in FDI and economic growth substantially increase carbon dioxide emissions. The research findings also reveal that carbon dioxide emissions are more resilient to negative shocks in FDI and economic growth. Based on these results, this study accomplishes that abatement measures should consist of strategies to enhance the deepness of FDI and economic growth in the Oman economy.JEL Classification: F21, Q56, C22

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