Investigating the Factors Affecting Foreign Direct Investment in Selected Muslim Countries: A Panel Data Approach

This paper attempts to test the effects of foreign direct investment on selected Islamic countries by using spatial econometric analysis. For this purpose, foreign direct participation and investment data from selected countries were used as panel data between 2000-2013 years period. The foreign direct investment equation is estimated using static (fixed and random effects) and dynamic (Generalized Method of Moments) methods as panel data in both conventional and spatial econometric models. The results of the estimated model show the existence of spatial correlations between selected countries and hence the use of this type of estimation is justified. On the other hand, the variables of degree of openness of the economy and economic security have a positive and significant effect on attracting foreign direct investment in the studied countries while inflation rate, economic growth and human capital solely have no significant effect on foreign direct investment in these countries.

An Empirical Analysis of Financing Constraints of Private Enterprises in China

To analyze the financing problems of private enterprises in China, this paper uses the financial data of A-share listed enterprises to construct four sets of Euler investment equation models. The empirical analysis of the models indicates that Chinese enterprises are generally facing financing constraints. However, compared with the state-owned enterprises, the financing constraints of private enterprises are more serious and common. To solve the financing dilemma of private enterprises, we need to deepen the structural reform of the financial supply-side, promote the transformation and upgrading of private enterprises, improve financial infrastructure and create a favorable financing environment.

Foreign Direct Investment Inflows into Zimbabwe

The authors sought to explore factors that influenced foreign direct investment (FDI) in Zimbabwe between 1990 and 2014. In spite of Zimbabwe being one of the richest countries, with respect to mineral endowment in the Southern African Development Community (SADC) region there was a paradox of less FDI attracted into the country. We include the investment policy stability (IPS) variable that has been ignored in the current literature; yet, the investment centre policies in any given developing country influence FDI inflows. The authors used Ordinary Least Square regression analysis technique to estimate an investment equation for Zimbabwe using Time-Series annual data obtained from the UNCTAD and World Bank database. The results suggest that investment policy stability; trade openness of the country; inflation rate and growth in real domestic product have a significant influence on the FDI inflows into the country. In conclusion, the results suggest that investment policy stability played an important role in attracting FDI into the country. Also, the results are expected to give a useful insight to policymakers that are responsible for attracting FDI inflows into Zimbabwe and other developing countries.

Investment, Q and Liquidity / Investitionen, Q und Liquidität

SummaryWe analyse the investment behaviour of German firms within the framework of the Q-theory. Because we use anonymous individual firm balance sheet data, no stock market measure of Q is available. The data set contains 1,342 manufacturing firms covering the period 1987 to 1998. Using the approach of Abel&Blanchard and Gilchrist&Himmelberg, a measure of Q is derived through a vector-autoregressive-model to forecast future profits directly.The estimation results of dynamic investment equations reveal that Q influences the firm’s fixed investment spending significantly. When supplementing the Q-investment equation, sales influences investment significantly whereas there is no cash flow influence. Using different indicators to characterize firm’s financial situation, we find no evidence of financial constraints which result in a stronger cash flow influence. While this study supports the Q-theory of investment, no evidence is found to support the effectiveness of a balance sheet channel.