In Central Asian countries the macroeconomic situation characterized by low level of public
investment. Peculiarities of transition economies led to greater complexity of the investment processes and
strengthened the factors opposing to IFDI.
Impact of Exchange rate volatility on FDI in PakistanIOSR Journals
ย
The main objective of our study is to determine the relationship of FDI with exchange rate volatility exchange rate and inflation. There are large numbers of FDI determinants but exchange rate is one of reflective determinant. Exchange rate extremely volatile due to its frailty to adopt the changes in international and domestic investment. In our study, we use time series data for FDI, exchange rate volatility, exchange rate, government consumption and domestic credit from 1980 to 2011 for Pakistan. Different time series econometrics techniques (volatility analysis, normality test, PP, unit root test) have been used for analysis. Results demonstrate that exchange rate volatility and inflation deter FDI while exchange rate has positive relationship with it.
Impact of Exchange rate volatility on FDI in PakistanIOSR Journals
ย
The main objective of our study is to determine the relationship of FDI with exchange rate volatility exchange rate and inflation. There are large numbers of FDI determinants but exchange rate is one of reflective determinant. Exchange rate extremely volatile due to its frailty to adopt the changes in international and domestic investment. In our study, we use time series data for FDI, exchange rate volatility, exchange rate, government consumption and domestic credit from 1980 to 2011 for Pakistan. Different time series econometrics techniques (volatility analysis, normality test, PP, unit root test) have been used for analysis. Results demonstrate that exchange rate volatility and inflation deter FDI while exchange rate has positive relationship with it.
Foreign Investment and Its Effect on the Economic Growth in Nigeria: A Triang...iosrjce
ย
Evidence abound about the registered increase in foreign investment inflows in recent years. While
proponents emphasize that these inflows could engender economic growth, critics express concern that there
could be destabilizing effect on the economy if not well managed. This study therefore, attempts to examine the
effect of foreign investments (disaggregated into foreign direct investment and foreign portfolio investment)
inflows on economic growth in Nigeria with a view to ascertaining the better contributor, using time series data
from 1987-2012. The OLS and the Granger causality procedures were employed in analyzing the data. The
result displays that both foreign direct investment and foreign portfolio investment have positive and significant
effect on economic growth though the partial correlation coefficients show that foreign portfolio investment is
the better contributor. Based on the result, government should pursue policies that encourage both foreign
direct investment and especially foreign portfolio investment.
Foreign Direct Investment and its Determinants: A Study on India and Brazilinventionjournals
ย
International trade builds up through international factor movement (IFM). IFM means movement of labour, capital and other elements of production among different country. It occurs by three ways: first one is immigration or emigration, international borrowing or lending is second way and last one is foreign direct investment (FDI). FDI means controlling ownership of a business enterprise of one country is based on entity of another country. Investment through FDI depends on various factors namely Inflation Rate, Human Development Index (HDI), Global Terrorism Index (GTI), Global Peace Index (GPI), Unemployment, Population; Corruption Perception Index (CPI), Industrial disputes etc. Object of this present study is to identify the effect of these factors on FDI inflow for India and Brazil. Also identify the more important determinants for FDI of these two countries. Ten years data (2005 to 2014) have been used for determining the result of this study. Result reveals that there exist impact of sample factors on FDI Inflow between two countries but strength of different factors varies
An Empirical Study on the Relationship between Economic Openness and Economic...Editor IJCATR
ย
Economic openness is the measure of economic activity in the country comprehensive index. How is economic openness indicator measured? Chinese economy has experienced rapid growth for more many years, what is on earth the effect of economic opening on Chinese economic growth? The answer to this question will provide instructive revelation about the selection of Chinese reasonable opening policy. Economic openness is measured by trade openness, foreign investment openness and financial openness in this paper. Based on Solow economic growth model and beginning with foreign trade, foreign investment and financial development, this paper made regression analysis using Chinese data from 1985 to 2004. The empirical analysis indicates that the domestic capital input is still the primary element that promotes Chinese economic growth, by contrast, the effect of foreign trade and foreign investment on Chinese economic growth is faint. Again, financial development on the impetus of economic growth in China has a room to rise.
Definition of investment strategy for sustainable development of regional eco...SubmissionResearchpa
ย
This article is discussed that the theoretical foundations of determining the investment strategy for sustainable development of the regionโs economy, as well as the current situation, analysis and future plans. by Rakhimberdiev Oybek Alisher ugli 2020. Definition of investment strategy for sustainable development of regional economies.ย International Journal on Integrated Education. 2, 4 (Mar. 2020), 108-115. DOI:https://doi.org/10.31149/ijie.v2i4.241. https://journals.researchparks.org/index.php/IJIE/article/view/241/234 https://journals.researchparks.org/index.php/IJIE/article/view/241
Does Macroeconomic factors Impact on Foreign Direct Investment in emerging ec...AI Publications
ย
Foreign direct investment is essential for economic growth of a country. It acts as a promoter for the economic development of a country. Keeping this in mind, the objective of this study is to determine the effect of macroeconomic variables such as interest rate, real exchange rate,inflation rate and stock market on foreign direct investment in Pakistan. For this purpose,study used the authentic annual data for the period of 27 years i.e. from 1990-2016. We are use for analysis E-View software, The empirical analysis involved using the ADF test to check the stationary of the data.Results revealed that interest rate and exchange rate have significant negative effect on FDI and stock market index has negative and unsignificant effect on FDI while inflation rate has positive and significant effect on FDI.
The Relation Between Exports of Main Products And Economic Growth of Key Econ...inventionjournals
ย
This paper clarifies the literature of key product export growth and regional economic growth. The paper analyses impacts of key product export on regional economic growth and vice versa. The paper provides recent empirical evidence of the relation. Besides an evaluation of the recent relation between export growth and economic growth in Viet Nam, the paper assesses the relation between key product export and economic growth during 1996-2012 period based on quantitative and qualitative approaches. With constructed models, the paper examines the relation between key product export and economic growth and concludes that it is positive. The research findings show that key product export in every economic region contributes positively to regional economic growth although it varies in different regions. Based on existing literature and empirical analysis, the paper provides a number of strategies to improve key product export contribution to key economic regions in the most effective manner and vice versa. The paper creates a fundament for researchers and policy makers both regionally and nationally in order for developing effective orientations, policies and measures for promoting export and sustainable eoconomic development.
New Evidence on the Determinants of Foreign Direct Investments in Emerging Ma...ijtsrd
ย
The main goal of the current study is to investigate how conventional and institutional factors affect foreign direct investment in particular global emerging markets. The study specifically seeks to determine the impact of GDP Growth, Population Growth, Level of Inflation, Trade Openness, Voice and Accountability, Rule of Law, Control of Corruption, Political Stability, and Government Effectiveness which are institutional determinants on FDI Inflows towards the Global Emerging Markets. To approach the research question a panel regression analysis has been applied by leveraging annual data from 18 countries, namely Angola, Brazil, Chile, China, Colombia, Egypt, Ghana, India, Indonesia, Malaysia, Mexico, Nigeria, Peru, Philippines, Singapore, South Africa, South Korea and Vietnam. Findings show that inflation and GDP have a significant and positive effect on the FDI inflows, while Voice and Accountability is significant but negative towards the examined variable. Manolis I. Skouloudakis "New Evidence on the Determinants of Foreign Direct Investments in Emerging Markets: A Panel Data Approach" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-2 , April 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd56212.pdf Paper URL: https://www.ijtsrd.com.com/economics/international-economics/56212/new-evidence-on-the-determinants-of-foreign-direct-investments-in-emerging-markets-a-panel-data-approach/manolis-i-skouloudakis
Foreign Aid and Economic Growth in the West African States: A Panel Frameworkinventionjournals
ย
This paper examines the impact of economic variables namely, foreign direct investment (FDI), investment, export, foreign aid and broad money supply on economic growth, approximated by gross domestic product (GDP)using annual data covering a period 1981-2008 on a group of West African countries. The impact of variables on GDP is estimated using three panel estimation models: pooled model (pooled), fixed effects model (FEM) and random effects model (REM). We explore the hypothesis that foreign aid can promote growth in developing countries. We test this hypothesis using panel data series,while the findings of previous studies are generally mixed, our resultsindicate that foreign direct investment has purely positive effects on economic growth in West African countries
Foreign Investment and Its Effect on the Economic Growth in Nigeria: A Triang...iosrjce
ย
Evidence abound about the registered increase in foreign investment inflows in recent years. While
proponents emphasize that these inflows could engender economic growth, critics express concern that there
could be destabilizing effect on the economy if not well managed. This study therefore, attempts to examine the
effect of foreign investments (disaggregated into foreign direct investment and foreign portfolio investment)
inflows on economic growth in Nigeria with a view to ascertaining the better contributor, using time series data
from 1987-2012. The OLS and the Granger causality procedures were employed in analyzing the data. The
result displays that both foreign direct investment and foreign portfolio investment have positive and significant
effect on economic growth though the partial correlation coefficients show that foreign portfolio investment is
the better contributor. Based on the result, government should pursue policies that encourage both foreign
direct investment and especially foreign portfolio investment.
Foreign Direct Investment and its Determinants: A Study on India and Brazilinventionjournals
ย
International trade builds up through international factor movement (IFM). IFM means movement of labour, capital and other elements of production among different country. It occurs by three ways: first one is immigration or emigration, international borrowing or lending is second way and last one is foreign direct investment (FDI). FDI means controlling ownership of a business enterprise of one country is based on entity of another country. Investment through FDI depends on various factors namely Inflation Rate, Human Development Index (HDI), Global Terrorism Index (GTI), Global Peace Index (GPI), Unemployment, Population; Corruption Perception Index (CPI), Industrial disputes etc. Object of this present study is to identify the effect of these factors on FDI inflow for India and Brazil. Also identify the more important determinants for FDI of these two countries. Ten years data (2005 to 2014) have been used for determining the result of this study. Result reveals that there exist impact of sample factors on FDI Inflow between two countries but strength of different factors varies
An Empirical Study on the Relationship between Economic Openness and Economic...Editor IJCATR
ย
Economic openness is the measure of economic activity in the country comprehensive index. How is economic openness indicator measured? Chinese economy has experienced rapid growth for more many years, what is on earth the effect of economic opening on Chinese economic growth? The answer to this question will provide instructive revelation about the selection of Chinese reasonable opening policy. Economic openness is measured by trade openness, foreign investment openness and financial openness in this paper. Based on Solow economic growth model and beginning with foreign trade, foreign investment and financial development, this paper made regression analysis using Chinese data from 1985 to 2004. The empirical analysis indicates that the domestic capital input is still the primary element that promotes Chinese economic growth, by contrast, the effect of foreign trade and foreign investment on Chinese economic growth is faint. Again, financial development on the impetus of economic growth in China has a room to rise.
Definition of investment strategy for sustainable development of regional eco...SubmissionResearchpa
ย
This article is discussed that the theoretical foundations of determining the investment strategy for sustainable development of the regionโs economy, as well as the current situation, analysis and future plans. by Rakhimberdiev Oybek Alisher ugli 2020. Definition of investment strategy for sustainable development of regional economies.ย International Journal on Integrated Education. 2, 4 (Mar. 2020), 108-115. DOI:https://doi.org/10.31149/ijie.v2i4.241. https://journals.researchparks.org/index.php/IJIE/article/view/241/234 https://journals.researchparks.org/index.php/IJIE/article/view/241
Does Macroeconomic factors Impact on Foreign Direct Investment in emerging ec...AI Publications
ย
Foreign direct investment is essential for economic growth of a country. It acts as a promoter for the economic development of a country. Keeping this in mind, the objective of this study is to determine the effect of macroeconomic variables such as interest rate, real exchange rate,inflation rate and stock market on foreign direct investment in Pakistan. For this purpose,study used the authentic annual data for the period of 27 years i.e. from 1990-2016. We are use for analysis E-View software, The empirical analysis involved using the ADF test to check the stationary of the data.Results revealed that interest rate and exchange rate have significant negative effect on FDI and stock market index has negative and unsignificant effect on FDI while inflation rate has positive and significant effect on FDI.
The Relation Between Exports of Main Products And Economic Growth of Key Econ...inventionjournals
ย
This paper clarifies the literature of key product export growth and regional economic growth. The paper analyses impacts of key product export on regional economic growth and vice versa. The paper provides recent empirical evidence of the relation. Besides an evaluation of the recent relation between export growth and economic growth in Viet Nam, the paper assesses the relation between key product export and economic growth during 1996-2012 period based on quantitative and qualitative approaches. With constructed models, the paper examines the relation between key product export and economic growth and concludes that it is positive. The research findings show that key product export in every economic region contributes positively to regional economic growth although it varies in different regions. Based on existing literature and empirical analysis, the paper provides a number of strategies to improve key product export contribution to key economic regions in the most effective manner and vice versa. The paper creates a fundament for researchers and policy makers both regionally and nationally in order for developing effective orientations, policies and measures for promoting export and sustainable eoconomic development.
New Evidence on the Determinants of Foreign Direct Investments in Emerging Ma...ijtsrd
ย
The main goal of the current study is to investigate how conventional and institutional factors affect foreign direct investment in particular global emerging markets. The study specifically seeks to determine the impact of GDP Growth, Population Growth, Level of Inflation, Trade Openness, Voice and Accountability, Rule of Law, Control of Corruption, Political Stability, and Government Effectiveness which are institutional determinants on FDI Inflows towards the Global Emerging Markets. To approach the research question a panel regression analysis has been applied by leveraging annual data from 18 countries, namely Angola, Brazil, Chile, China, Colombia, Egypt, Ghana, India, Indonesia, Malaysia, Mexico, Nigeria, Peru, Philippines, Singapore, South Africa, South Korea and Vietnam. Findings show that inflation and GDP have a significant and positive effect on the FDI inflows, while Voice and Accountability is significant but negative towards the examined variable. Manolis I. Skouloudakis "New Evidence on the Determinants of Foreign Direct Investments in Emerging Markets: A Panel Data Approach" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-2 , April 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd56212.pdf Paper URL: https://www.ijtsrd.com.com/economics/international-economics/56212/new-evidence-on-the-determinants-of-foreign-direct-investments-in-emerging-markets-a-panel-data-approach/manolis-i-skouloudakis
Foreign Aid and Economic Growth in the West African States: A Panel Frameworkinventionjournals
ย
This paper examines the impact of economic variables namely, foreign direct investment (FDI), investment, export, foreign aid and broad money supply on economic growth, approximated by gross domestic product (GDP)using annual data covering a period 1981-2008 on a group of West African countries. The impact of variables on GDP is estimated using three panel estimation models: pooled model (pooled), fixed effects model (FEM) and random effects model (REM). We explore the hypothesis that foreign aid can promote growth in developing countries. We test this hypothesis using panel data series,while the findings of previous studies are generally mixed, our resultsindicate that foreign direct investment has purely positive effects on economic growth in West African countries
Remittance inflow and economic growth the case of georgiaAzer Dilanchiev
ย
Abstract:
Remittance inflow become one of the main source of capital flows in the world. It is noted that remittance is
very effective in promoting household welfare and as an alternative source of capital inflow. However in it
uncertain whether or not it leads to economic growth. This article examines the effects of remittances inflow
on economic growth in Georgian republic. The impact of remittance inflow on GDP growth was analyzed and
tested by Unit Root Test, Johansen Co-integration and VAR Granger Causality/Block Exogeneity Wald Tests.
In the paper the quarterly data interval from the first quarter of 1999 to third quarter of 2015 was used. As a
result it was found out that that there is a nexus between remittance and GDP and it is concluded that
remittance leads to increase in GDP growth.
Inflation Rate, Foreign Direct Investment, Interest Rate, and Economic Growth...ijtsrd
ย
The article aimed to investigate the relationship between inflation rate, foreign direct investment, interest rate, and economic growth of ten 10 emerging Sub Sahara African countries for the period 1998 to 2018. The random effects GLS regression estimator was employed to examine the equilibrium relationship between the variables. From the results, foreign direct investment had a significantly positive influence on GDP, while the inflation rate and interest rate trivially positively predicted GDP. Based on these findings, the study recommended that the government of emerging nations should put prudent measures to improve inflation, interest rate, and foreign direct investment within the economy for sound wellbeing. Ofori Charles | Shuibin Gu | Takyi Kwabena Nsiah | Eric Dwomoh "Inflation Rate, Foreign Direct Investment, Interest Rate, and Economic Growth in Sub Sahara Africa: Evidence from Emerging Nations" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-6 , October 2020, URL: https://www.ijtsrd.com/papers/ijtsrd31105.pdf Paper Url: https://www.ijtsrd.com/economics/international-economics/31105/inflation-rate-foreign-direct-investment-interest-rate-and-economic-growth-in-sub-sahara-africa-evidence-from-emerging-nations/ofori-charles
ImportanceUnder the global economic crisis, instability of global financial and commodity markets and increased competition for investment resources, the rational allocation and efficient use of investment, particularly in the development of industries, are of great significance. Object. Due to the crisis phenomena in the world economy, instability of the world financial and commodity markets, rational distribution and efficient use of investments, especially in the development of industries, are becoming increasingly important.
Impact of political stability on the macroeconomic variables and FDI of Pakis...journal ijrtem
ย
Abstract: In this paper we have discussed the vital role of political stability on the link between macroeconomic variables and FDI .For this purpose we have used a data of year 1991 to 2011.In this empirical analysis we have used ADF test for the checking the stationary of the data and other softwareโs are SPSS and eviews.This result of this study have made sure that import ,BOP, export and GDP growth rate have significant impact on the FDI inflows in the Pakistan and inflation has a negative impact on the FDI based on this research has proved that political stability is crucial for the expansion of foreign direct investment.
Keywords: political stability, ADF, BOP, crucial etc.
Factors Affecting the Investment Climate and the Role of Investments in Econo...ijtsrd
ย
This article analyzes the factors affecting the investment climate on the example of the Uzbekistanโs economy. The article also discusses the economy of Uzbekistan and the investments attracted to it. Based on the analysis, proposals have been developed to increase the volume of investments in the Uzbekistanโs economy. Avazov Nuriddin Rustam Ugli | Begalova Durdona Baxodirovna "Factors Affecting the Investment Climate and the Role of Investments in Economic Development (In the Case of Uzbekistan)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-2 , February 2021, URL: https://www.ijtsrd.com/papers/ijtsrd38559.pdf Paper Url: https://www.ijtsrd.com/economics/development-economics/38559/factors-affecting-the-investment-climate-and-the-role-of-investments-in-economic-development-in-the-case-of-uzbekistan/avazov-nuriddin-rustam-ugli
The aim of this study is to examine the impact of international capital flows on the economic growth in Jordan during the period from 2005 to 2017, The study also examines trends and composition of capital inflows. The study used descriptive analytical research method which was appropriate for the purpose of research. By using time series data, the study found that Foreign Direct Investment (FDI), foreign portfolio investment (FPI), grants (Gr) and Worker remittances (WR) are positively affecting the economic growth direct contribution. Based on the research results, the study came with a several recommendations, the most important recommendation is; the government of Jordan should create and relax the rules and regulations to attract more investors, and also the government should work hand in hand with the developed countries to create economic and employment opportunities, improve the countryโs competitiveness, and expand growth within the private sector so that everyone in Jordan has the opportunity to contribute to a brighter future.
This paper examines the motives behind foreign direct investment (FDI) in a group of four CIS countries (Ukraine, Moldova, Georgia and Kyrgyzstan) based on a survey of 120 enterprises. The results indicate that non-oil multi-national enterprises (MNEs) are predominantly oriented at serving local markets. Most MNEs in the CIS operate as 'isolated players', maintaining strong links to their parent companies, while minimally cooperating with local CIS firms. The surveyed firms secure the majority of supplies from international sources. For this reason, the possibility for spillovers arising from cooperation with foreign-owned firms in the CIS is rather low at this time. The lack of efficiency-seeking investment poses further concern regarding the nature of FDI in the region. The most significant problems identified in the daily operations of the surveyed foreign firms are: the volatility of the political and economic environment, the ambiguity of the legal system and the high levels of corruption.
Authored by: Malgorzata Jakubiak
Published in 2008
THE IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN CANA.docxrtodd33
ย
THE IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN CANADA
ABSTRACT
The study examines the determinants of economic growth in Canada over time, and finds out if there is any support for FDI-led growth hypothesis in Canada using simple regression analysis. To achieve this goal the study uses a model that is based on the Mankiw et al 1992 as theoretical foundation for the analysis in which they emphasized on human capital as an important variable for economic growth in addition FDI will be incorporated into their model as a variable capable of increasing physical capital as well as developing human capital and enhancing technological progress capable of stimulating economic growth. Using 11-year period of quarterly data.
INTRODUCTION
The rapid expansion of globalization marked by enhanced economic integration and trade liberalization has given rise to ever expanding investment around the world. The immense growth in the computer and telecommunications industries, and lowering of transportation costs has made it possible for each state of production to be located in any place that proves to be more conducive to efficiency. This situation has significantly increased the inflow of foreign direct investment (FDI) in the world which has risen to the second highest level ever recorded in 2006. As a result, developed countries, developing countries, and transition economies all experienced growth in FDI inflows. However, among developed nations. FDI in Canada plunged during the period of 2002 โ 2004(which is not covered by our data set) in manufacturing sector due to attrition and maintained a stunted latency in terms of global share of FDI (huffingtonpost 2013;the globe and mail 2010). Although major concentration of these investment was on manufacturing its deterioration by 13 percent from 2009 to 2009 drove investors to mining and oil and gas which increased by 10 percent by 2000 to 2009. Also the finance and insurance industries was not left out by investors which witnessed an increase of 1.4 percent by 2009 to 2009. FDI shares in other Canadian sector either witnessed an increase of 1.9 percent or more to date. Proponent of FDI emphasized that host country benefit from capital spillovers (Morris, 2008, p. 4.). Local firms are bound to benefit from technological changes brought by foreign investors to host country (Gรถrg and Greenaway 2002) via technological imitation by domestic investors, skill acquisition from advanced technological use by domestic workers which can enhance domestic human capital while Opponent of FDI argues of possible future repatriation of capital in monetary terms to country of foreign investor (Morris, 2008, p. 4). This could also lead to unfair market competition with local investors whom lack sufficient capital and manpower to purchase or make use of advanced technology brought in by foreign investors which can oust them from market (Gรถrg and Greenaway (2002, pp. 2-3)
OBJECTI.
This paper investigates the evolution and determinants of manufactured exports and FDI in MED-11 countries over the period 1985-2009 as well as the prospects of their evolution under different scenarios pertaining to the evolution of the determinants. The econometric analysis confirmed the role of exchange rate depreciation, the openness of the economy and the quality of institution and infrastructure in fostering manufactured exports and FDI inflows in the Region. The prospects' assessment suggested that a scenario of deeper integration with the EU entails superior performance regarding manufactured exports and FDI than status quo or less integration with the EU but greater regional integration.
Authored by: Khalid Sekkat
Published in 2012
Tax Incentives and Foreign Direct Investment in Nigeriaiosrjce
ย
Given the significance of Foreign Direct Investment (FDI) to economic growth and the use of tax
incentives as a strategy among government of various countries to attract FDI, this study examines the influence
of tax incentives in the decision of an investor to locate FDI in Nigeria. Data were drawn from annual statistical
bulletin of the Central Bank of Nigeria and the World Bank World Development Indicators Database. The work
employs a model of multiple regressions using static Error Correction Modelling (ECM) to determine the time
series properties of tax incentives captured by annual tax revenue as a percentage of Gross Domestic Product
(GDP)and FDI. The result showed that FDI response to tax incentives is negatively significant, that is, increase
in tax incentives does not bring about a corresponding increase in FDI. Based on the findings, the paper
recommends, amongst others, that dependence on tax incentives should be reduced and more attention be put on
other incentives strategies such as stable economic reforms and stable political climate.
Foreign Direct Investment, Trade and Economic Growth: A New Paradigm of the B...Akhilesh Chandra Prabhakar
ย
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.
Many countries have seen the importance of financial education by making financial
education a national strategy. In Vietnam, although the National Strategies for Inclusive Financial
Education has been proposed since 2017 and officially included in the National Financial Inclusion
Strategy in 2020, however, financial education is still quite new, and many people are not aware of
the necessity of financial l
Today, in the rapidly emerging globalization process, increasing the competitiveness of enterprises
depends on increasing of their firm performance. Although there are many methods and techniques affecting
firm performance, Information technology (IT) capabilities has become one of the most widely used method,
especially in dealing with supply chain matters of a firm. The aim of our study is to express whether innovation
and organization learning is effective as intermediate variable to the effects of IT capabilities at firmโs
performance. The opinion which claim
Globally, the number of startup companies has rapidly expanded during the last 5-8 years. Offering
products and/or services that greatly enhance the lives of its clients is a major focus for these firms. In India,
local and federal government initiatives have provided new enterprises and entrepreneurs with much
momentum and assistance, helping India become the world's top startup location. The Government of India
(GOI) launched the "Startup India" campaign in 2015 to promote entrepreneurship and support businesses to
achieve this goal (Babu, S., Sridevi, K.,2019). An IBM Center for Business Value and Oxford Economics study
in 2018 found that 90% of Indian companies fail within the first five years of operation. Potential difficulties
that startups may run across, both generally and specifically in the Indian market, have been described by
several authors.
Behaviour finance is the study of how psychological phenomena affect financial behaviour. This
financial science is used in making financial decisions. Amid the development of the digital economy, paylater
innovation has emerged. It is feared that the ease of use of paylater can have a negative impact, one of which is
the attitude of impulsive buying. This research will analyze the effect of financial literacy, self-control, risk
perception, and percieved ease of use on impulsive buying behaviour. This research is based on Decision Affect
Theory, which is a theory that discusses financial decision behaviour that is influenced by self-emotion. This
research is uses purposive sampling wi
Improving the business environment is one of the key strategies to promote local and regional
economic development. However, which factors affect the business environment of the provinces is still
controversial. Using survey data from 400 investors and managers and a multivariate regression analysis
method, this study has identified the factors affecting the business environment of Hai Phong province. The
analysis results show that there are 09 factors affecting the business environment of Hai Phong City, including
entry costs, land access and tenure, transparent, informal charges, time cost, pro-activeness, business support
services, labor training and legal institutions. In
The effect of work attitude and innovation ability on employee innovation performance is of great
significance for improving the innovation ability of manufacturing enterprises and building an "Innovative
Country" in China.This article theoretical analysis was conducted on the mechanism by which the work attitude
of employees in manufacturing enterprises affects innovation performance and the mediating mechanism of
innovation ability. Based on data from Chinese manufacturing enterprises, empirical analysis was conducted
using SEM models. Resear
The concept of organizational resilience continues to grow in focus and importance, but there
has yet to be an agreed upon measure of organizational resilience. Organizational resilience can be seen as a
corporationโs ability to adapt to change and maintain flexibility within their supply chain. Resilience and
flexibility at all organizational levels is necessary, in a proactive manner, to turn resilience into a competitive
advantage
In this paper, by using the basic method of differential geometry, combined with the optimization
theory and the basic technique of data analysis, the definition, basic properties and statistical characteristics of
nonlinear correlation coefficients on manifolds are studied and given, test the rationality and validity of the
nonlinear correlation coefficient defined in this paper. Therefore, the study of this paper has certain theoretical
value and potential practical significance.
This study aims to analyze and prove whether there is a positive and significant influence
between product quality and poki prices on purchasing decisions for Kobba brand coffee. The survey was
conducted using 53 respondents who were buyers who had purchased Kobba brand coffee more than once.
Information from respondents was obtained through a list of questions that were sent and returned by
respondents
In this paper, we introduce a universal framework for mean-distortion robust risk measurement and
portfolio optimization. We take accounts for the uncertainty based on Gelbrich distance and another uncertainty
set proposed by Delage & Ye. We also establish the model under the constraints of probabilistic safety
criteria and compare the different frontiers and the investment ratio to each asset. The empirical analysis in the
final part explores the impact of different parameters on the model results.
Despite the attainment of the famous Millennium Development Goals (MDGs) of reducing the number
of poor people across the globe a significant number still live below the poverty line. The problem of poverty is
more endemic in developing countries like Nigeria. Several intervention efforts have been in place to address
the poverty question which persists partly due to serious financial exclusion and unethical activities of informal
finance providers.
The focus of this research was to establish the effect of entrepreneurship Ecosystem in inculcating
entrepreneurial propensity for community development. Promotion of entrepreneurship in Kenya has existed
ever since independence. The Government has shown tremendous support to entrepreneurship growth. The
Government have channelled financial support through funding such as Women Enterprise fund, Youth
Enterprise Fund and Uwezo Fund
In this paper, we consider an AAI with two types of insurance business with p-thinning dependent
claims risk, diversify claims risk by purchasing proportional reinsurance, and invest in a stock with Heston
model price process, a risk-free bond, and a credit bond in the financial market with the objective of maximizing
the expectation of the terminal wealth index effect, and construct the wealth process of AAI as well as the the
model of robust optimal reinsurance-investment problem is obtained, using dynamic programming, the HJB
equation to obtain the pre-default and post-default reinsurance-investment strategies and the display expression
of the value function, respectively, and the sensitivity of the model parameters is analyzed through numerical
experiments to obtain a realistic economic interpretation. The model as well as the results in this paper are a
generalization and extension of the results of existing studies.
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Determinants of IFDI in Central Asian Countries: Econometric Analysis
1. International Journal of Business Marketing and Management (IJBMM)
Volume 3 Issue 12 December 2018, P.P. 22-31
ISSN: 2456-4559
www.ijbmm.com
International Journal of Business Marketing and Management (IJBMM) Page 22
Determinants of IFDI in Central Asian Countries: Econometric
Analysis
Nurzat Mamytova1
, Hongbing You2
1
(School of Economics and Management, Nanjing University of Science and Technology, China) 2
(School of
Economics and Management, Nanjing University of Science and Technology, China)
ABSTRACT: In Central Asian countries the macroeconomic situation characterized by low level of public
investment. Peculiarities of transition economies led to greater complexity of the investment processes and
strengthened the factors opposing to IFDI. It is therefore important to examine the factors that attract IFDI,
while highlighting their positive and negative effects, to determine the prospects.Current research defines the
major determinants of IFDI in Central Asian countries (in case of Kyrgyzstan, Kazakhstan, Uzbekistan and
Tajikistan)by revising the literature review and analyzing the related data. Panel data technique that covers
time period 1990-2015 has been organized, fixed effects model chosen as a research method. The research
found that inconsistent legislative environment, high level of government controlintervention and widespread
corruption in case countries are the major obstacles to IFDI; also the most significant factors that influence
IFDI are macroeconomic stability, natural resources and IFDI policy that promote trade openness. In most
selected countries it showed negative correlation between the IFDI and IFDI policy and macroeconomic
stability. Overall the most of IFDI types in Central Asia are resource-seeking based on significance of natural
resources; and efficiency-seeking based on the importance of macroeconomic stability and IFDI policy.
KEYWORDS -transition economy,natural resources, investment, factors, business climate
I. INTRODUCTION
(Azam, 2010)conducted study by analyzing the economic determinants of IFDI in Armenia,
Kyrgyzstan and Turkmenistan by covering the data derived from World Bank (WB) for period 1991-2009 [1].
Author found market size and official development assistance (ODA) have positive effects and negative effect
of inflation on IFDI for the selected time frequency. But some determinants as official development assistance
and inflation are insignificant in Armenia and Kyrgyz Republic correspondingly.
There are few studies related to IFDI determinants in Central Asia. (Lee, Baimukhamedova, &
Akhmetova, 2010)conducted research by analyzing IFDI, exchange rate and their roles to the economic growth
in Kazakhstan. Authors employed several variables to find the effect of those variables to the economic growth.
They found that exchange rate and FDI inflow donโt have direct impact on economic growth. Nevertheless
employment ratio, industrial production, fixed capital investment do have significant effect. Study concluded
that IFDI by MNE does not influence on GDP growth in Kazakhstan [2].
(Tรธndel, 2001) conducted research by using panel data technique with fixed effect model which
included 25 countries named as Common Wealth of Independent State (CIS) ten Countries and Central and
Eastern Europe (CEE) 10 countries [3]. Study surveyed samples based on their economy structure which is so
called transition economy. EBRD defined that โTransition is the process through which open market oriented
economies are establishedโ. All case countries mentioned above have been changing their economies from
planned economy to market economy. The study employed variable as: IFDI, IFDI per capita, GDP, GDP
growth, GDP/capita and TRI (transition indicator). The author found that mostly IFDI in CIS countries are
market-seeking and resource-seeking which stands for the natural resources; and market size is significantly
important in attracting IFDI. However in CEE countries IFDI considered as efficiency-seeking or vertical
investment. In CEE countries transition indicator determinant has been found primary motive to invest in this
region. After the collapse of Soviet Union the many countries were trying to get recovered from the interrupted
economic supply chain.
2. Determinants of IFDI in Central Asian Countries: Econometric Analysis
International Journal of Business Marketing and Management (IJBMM) Page 23
One of the sources to improve economic condition is the foreign investment flow, (Wunnava,
2004)analyzed nine receiving countries and fifteen EU flowing investment countries. Author`s sample includes
nine countries with transition economies. The study employed linear regression model with cross-section data
[4]. This study also proves that most important factor is trade openness in terms of import. Because selected
countries need to improve trade policy in order to attract the investors, to strengthen their economic condition.
Next most significant factor was the host economy size as GDP. In general GDP is the best factor to identify the
host economy growth and purchasing power parity. Additionally labor cost and country risk found statistically
crucial. Because the investors want to cut the costs on production by manufacturing in host economy where
labor cost is lower than in home country. The study implements that nine economies in transition have to
stabilize the economic and political atmosphere, lack of confidence of investors about the host economyโs
macroeconomic fluctuation, political battles avoid investment. After the collapse of USSR many countries lack
of legislative environment which created unstable economy and investment climate. Ex-soviet union countries
were lack of specialists who could explain and propose effective rules and economic system. No doubt that
foreign investment requires both legislative and economic stability in host country (Andrzjei Baniak, Jacek
Cukrowski, & Herczynki, 2002). Authors had researched two former Soviet Union countries Georgia and
Kyrgyzstan, mainly the study had aimed to identify the determinants of foreign investment flow by taking into
account legislative environment. Research results conclude that the inconsistency of exchange rate, high level of
doubt about risk may lead to the decrease of investment flow to the host country. Additionally the uncertain or
unstable legal environment make foreign investors not to invest in host country, they need guarantee for their
manufacturing plants. Unstable exchange rate may lead to the high marginal costs [5]. In summarizing above
mentioned statements economic steadiness motivate FDI inflow to the host country, or contrariwise unstable
economy diminishes the inward foreign investment. By concluding IFDI in transition economy strictly
correlated with legal and macroeconomic steadiness, on the other hand the vital topic is to attract appropriate
investors who tend to have long-term investment strategy rather than high risk investment with cause of
negative impact on country.
(Kudina & Jakubiak, 2009) had surveyed 120 enterprises which operates in four CIS countries
(Kyrgyzstan, Georgia, Ukraine and Moldova), by using ordered logistic analysis by categorical data. Study
aimed to find the motives of the foreign investors [6]. Primary motives of the mostly investors in selected CIS
countries were market-seeking dominant motive, low-cost factors of production and educated labor force. The
empirical result shows that almost 90% of the surveyed foreign enterprises have problems with legal system and
corruption level. Major problems were addressed to the correlation among the scope of the company in
establishing clear property rights.
Many scholars argue that IFDI flow is not identical in all countries. It depends on several economic
structures. Like transition, planned and market economy. Sometimes it relies on host countryโs legal and
environment sphere(Mateev, 2008). This study focused on IFDI flows between twelve EU source countries and
eight transition economy in Central and Southeastern Europe with time frequency that covers 2001-2006 [7].
Surveyed countries with transition economy were receiving different amount of IFDI. The author analyzed all
countriesโ specific conditions and underlined different political and institutional factors. Author found that both
gravity factors (distance, GDP and population) and non-gravity factors (labor cost, risk and corruption) are
significantly affecting IFDI. In addition study underlined trade and infrastructure did not have influence on IFDI
inflow in sampled countries. As in transition economies privatization process considered to be crucial factor but
current research did not find any significance of this factor to FDI inflow.
Since 1991 Central Asian countries have been aiming at transformation of their economies from
centrally planned to a market economy and implementing their programs and economic reforms respectively.
After the collapse of the Soviet Union in 1991, real GDP has fallen sharply in all countries during the period of
1990-1995. GDP growth fell to -1.55 percent in Kyrgyzstan, -1.26 percent in Kazakhstan, -2.13 percent in
Tajikistan and -0.52 percent in Uzbekistan (see Table 1). By the mid-90s sharp drop in industrial production and
destructive inflation rate were finally brought under control.
Figures 1-4 show the share of IFDI by country and by industry in four countries. IFDI by home country are
almost similar in all four Central Asian countries.Main investors are China, Russia and European Union, which
are key economic partners of these countries too, but at the same time shares of investor countries in Central
Asian countries varies from country to country. Russia still plays a great role in economies and IFDI flows in
Central Asian countries as it has tight connections from the Soviet Union regime, and it had the largest share of
IFDI in 2015. It has the highest share in Uzbekistan, which equal to 37%, second in Tajikistan-18% and 4% in
both Kyrgyzstan and Kazakhstan. China is the another key investor in Kyrgyzstan with 24%, and Tajikistan
with 21% of country`s total IFDI, however, it`s investment share was only 8% in Kazakhstan and 4% in
Uzbekistan in 2015. However, China is getting more involved in Central Asian economy and IFDI; for example
3. Determinants of IFDI in Central Asian Countries: Econometric Analysis
International Journal of Business Marketing and Management (IJBMM) Page 24
in 2008 its shares in Kazakhstan`s IFDI flows were 3% and in Kyrgyzstan as well, but in 2015 they reached 8%
and 24% respectively, while China`s investment in Tajikistan`s IFDI reached 21% in 2015 from 4% in 2011.
European Union countries has presence mostly in Kazakhstan with the highest IFDI share, especially
Netherlands (29%, the largest investor), United Kingdom and France; while among them only United Kingdom
is a key investor in other three countries: Tajikistan-16%, Kyrgyzstan- 12% and in Uzbekistan only 3%. Among
non-CIS countries Canada has been investing in Kyrgyzstan constantly, and its the second largest investor after
China with its 22% share in total IFDI. The one of the largest investments of Canada was promoted by Centerra
Gold Mining Company which has been operating in gold mining industry since 1995 through Kumtor Gold
Company and has been playing inevitable role in country`s GDP.Other key investors are from United Arab
Emirates with 17% share in Tajikistan, Korea with 21% in Uzbekistan and 5% in Kyrgyzstan, Switzerland-12%
in Kazakhstan, Iran-7% and Turkey 5% in Tajikistan, USA-9% in Uzbekistan and 7% in Kazakhstan, and
Germany-6% in Kyrgyzstan. Moreover, there are offshore jurisdictions like Cyprus, Seychelles, Liberia, Persian
Gulf countries, and other ASEAN member countries including Singapore and Japan as well, who invest in
Central Asian countries,- but still they are not key investors in the region.
Statistical data for IFDI by sector shows that there are two key streams for investment: (1) stream, which
is almost half or even more in total IFDI in selected countries, except Tajikistan, is related to natural resources.
Sectors of oil and gas extraction, geological explorations, mining, processing of oil and gas, chemical industry,
metallurgy, metal and non-metal minerals, manufacturing, etc. Kyrgyzstan has a lot of gold deposits, but not all
of them are being operated. The biggest gold mine operator is Canadian Centerra Gold Corporation. Kazakhstan
and Uzbekistan are rich for oil and gas and development of this sector, including construction of pipelines, is a
very big project, and at the same time has a high impact on fluctuation of IFDI. For example, last years China is
actively investing in oil and pipeline in Kazakhstan; during construction of pipelines IFDI increased and fall in
2010 after completion of the pipeline construction. (2) another stream is related to services, which includes
sectors in real estate, finance, communications, construction and others. These sectors have more share of IFDI
in Kyrgyzstan and Tajikistan, which don`t own deposits of oil and gas. This stream has been increasing over
time. According to statistical data from National Bank of Kazakhstan the share of communications, finance,
construction and trade reached 29% in 2015 from 8% in 2008. Two countries, Uzbekistan and Kazakhstan, have
also other IFDI sectors like machine building, textile and food manufacturing. While Tajikistan receives IFDI
for electricity production and distribution. Although all selected countries have large agriculture industry, this
sector does not receive any IFDI.
There are both direct and indirect effects of investment projects on economic growth of the country.
Indirect impacts might be on real exchange rate, prices of goods, wages and salaries of population, etc. But in
this part only direct impacts will be discussed. Direct macroeconomic effects of IFDI might be in contribution to
exports, tax revenues, employment rate, production output of the country. Data on foreign enterprises are
available for Kazakhstan, Kyrgyzstan and Tajikistan, no data available for Uzbekistan. Table 2 shows the
contribution of foreign investors to gross and industrial outputs, export and employment of these economies. For
Tajikistan there is only one indicator, according to which foreign enterprises contribute only 4% to the total
gross output of the country. In Kazakhstan foreigner produce 61% of industrial output, while in Kyrgyzstan this
indicator equals to 32.6%. So from the information above we can see that output percentages have positive
correlation with IFDI stock volumes of these countries. IFDI does not have a direct impact on employment both
in Kyrgyzstan (2.6%) and Kazakhstan (5.4%), because as discussed above IFDI to these countries goes mostly
to capital-intensive and knowledge-intensive industries like chemical industry, processing of oil and gas,
mining, metallurgy, communications, etc. Financial Times FDI Intelligence database shows the average cost of
creation a new work position. In Kazakhstan it requires USD586000/working place and USD363000 in
Kyrgyzstan. Tax amounts contributed to the host countries by IFDI recipient enterprises are not complete, but
even from the little information on it from Kazakhstan and Kyrgyzstan it can be concluded that tax payments to
the governments are of great role in the economies of these two countries. The main taxpayers in Kazakhstan are
for sure the biggest IFDI receivers in oil and gas industry. Join ventures produced 83% of this sector; and paid
tax in the amount of USD22.9 billion, which equals to 11.2% of GDP and 23% of government budget in 2016
[8]. In Kyrgyzstan the main taxpayer is Kumtor Gold Company, which paid tax in the amount of
USD126,524,909 in 2017, which is 9.7% share of total GDP and 21.1% share of total industrial output of the
country [9].
In all countries implementation of IFDI projects played an important role in GDP growth, job creation and
growth of many industries. The impact of IFDI on economic growth of Kazakhstan, to improve the trade and
current account balances, and many other macroeconomic indicators were positive. Moreover, as a result of
increased demand caused by the large investments in the oil sector and the growth of consumption, an increase
in the following sectors, including construction, trade, business, transport and financial services(Kazakhstan,
4. Determinants of IFDI in Central Asian Countries: Econometric Analysis
International Journal of Business Marketing and Management (IJBMM) Page 25
2012). The oil boom also affects the rest of the economy through its effect on macroeconomic
performance. Growth in revenues due to increased production of oil leads to increased consumption and
investment. Large growth in government consumption, for example, is likely to lead to an increase in the
services sector, as the government will spend more on education, health and public administration.
In Uzbekistan, the implementation of IFDI projects contributed to the restructuring of existing and creation of
new enterprises in several sectors, including textile, tobacco, machine-building (Daewoo motors), gold
mining (Newmont Mining Corporation), and other industries.
For model analysis of IFDI determinants in current research panel data technique has been applied. There
are advantages of panel data technique over time-series and cross section studies. Those benefits by
H.Baltagiare following:
1) Controlling heterogeneity: Panel data assumes that countries, states, and individuals are heterogeneous.
However the time-series and cross-section methods are not controlling this heterogeneity run the risk of
obtaining results.
2) More informative data, more variability, less collinearity among the variables, more degrees of freedom
and more efficiency: In time-series studies are plagued with more multicollinearity.
3) Dynamics of adjustment: Cross-sectional distributions that look relatively stable hide a multitude of
changes.
4) Panel data are better able to identify and measure effects that are simply not detectable in pure cross-
section or pure time-series data.
5) Panel data gathered on countries, individuals and households maybe more accurately measured than
similar variables measured at the macro level. Biases resulting from aggregation over countries and
households may be reduced or removed.
6) Panel data models allow to construct and test more complicated behavioral models than purely cross-
section and time-series data [10].
Panel data may have group effects, time effects, or both. These effects are either fixed effect or random
effect. A fixed effect model assumes differences in intercepts across groups or time periods, whereas a random
effect model explores differences in error variances. The Hausman specification test compares the fixed versus
random effects under the null hypothesis that the individual effects are uncorrelated with the other regressors in
the model [11]. If correlated (H0 is rejected), a random effect model produces biased estimators, violating one
of the Gauss-Markov assumptions; so a fixed effect model is preferred.
Estimation Equation given as follow:
100 โ
๐น๐ท๐ผ
๐บ๐ท๐
= ๐ผ + ๐ฝ1 ๐บ๐ท๐๐๐ก + ๐ฝ2 ๐๐ท๐ด๐๐ก + ๐ฝ3(๐น๐ท๐ผ๐๐๐ฟ)๐๐ก + ๐ฝ4 ๐ผ๐๐ฟ๐น๐ด๐๐ผ๐๐๐๐ก
+๐ฝ5 ๐ผ๐๐น๐ ๐ด๐ถ๐๐ก + ๐ฝ6 ๐๐ด๐๐ ๐ธ๐๐๐ก + ๐
๐ = stands for country
๐ก = means observed time period
๐ = ๐ ๐ก๐๐๐๐ ๐ก๐๐๐๐๐๐๐๐ก๐๐๐
The analysis covers 4 countries in Central Asia (Kyrgyzstan, Kazakhstan, Uzbekistan and Tajikistan)
over the period 1990-2015. As it has been retrieved from (Asiedu, 2005) in literature review the dependent
variable is the ratio of net FDI inflow to GDP[12]. The data has been obtained from World Bank Database,
World Development Indicators. The numbers of variables included in this research has been identified according
to the availability of data for each country. Eviews software has been used for analysis. Above mentioned
software is specially designed for econometric analysis.
The research includes six variables which have been mentioned in Table 3. The selection of variables
based on literature review of current research, and measurements has been retrieved from (Asiedu, 2005).
Author has conducted study by including several variables categorizing them by policy, institutional and
political risk variables[12]. However current research retrieved only the variables excluding categorizing and
some other risk due to the availability of data.
As present topics cover the determinants of IFDI, IFDI has been taken as dependent variable. The
market size taken as GDP according to the literature review provided above. Also current study expects the sign
of GDP variable as positive. As it is mentioned by (Azam, 2010) ODA plays vital role by indicating the strong
5. Determinants of IFDI in Central Asian Countries: Econometric Analysis
International Journal of Business Marketing and Management (IJBMM) Page 26
and tight cooperation of host country with international donors, by considering it ODA has been included and
has been measured in million $U.S. Therefore expected sign of ODA is positive. IFDI policy has been measure
considering the openness to IFDI which has been mentioned by (Asiedu, 2005) and the measurement of this
variable is trade as a percentage to GDP. Same as previous variable the positive sign expected. Many scholars
who have been cited by current research (Asiedu, 2005; Azam, 2010; Ranjan & Agrawal, 2011) use inflation
rate to indicate the macroeconomic stability[12][1][13]. The expectation from this variable is negative.
Infrastructure variable has been added by considering as an important factor which has been mentioned by
(Asiedu, 2005; James P.Walsh, 2010; Sinha, 2007); measured by the telephone line per 100 people. Same as
main variables of current study the positive sign is expected. As one of the traditional determinants is natural
resource has also been included in this research. As it was expressed by (Dunning, 1973)IFDI which tend to
invest to acquire the resources named as resource seeking IFDI[14]. In literature review many scholars
(Armstrong; Asiedu; Nnadozie; Wunnava) included natural resources as determinants[4][12][15][16].
Additionally according to the (Dunning, 1973) classification of IFDI, present research added types of
IFDI in order to know which types of IFDI are mostly present in selected countries[14].
The equations 1, 2, 3 and 4 estimated regression lines for Kyrgyzstan, Kazakhstan, Uzbekistan and
Tajikistan respectively given in Table 4. The empirical results of the research have been shown in Table 5.
Based on the results shown in the Table 5, it is possible to interpret that infrastructure of Kyrgyzstan is
significant with its negative sign. Perhaps investors would like to invest where the infrastructure has already
settled down. Here it is possible to conclude that inefficient infrastructure can cause negative effect to
investment whereas the efficient and the well-developed infrastructure may motivate investors. Current findings
regarding to the infrastructure is same with the findings of who(James P.Walsh, 2010) argue that infrastructure
is significant with its negative sign[17]. One of the important traditional determinants of IFDI natural resources
in case of Kyrgyzstan has highly significance with its negative sign coefficient -5.38. No doubt that availability
of natural resources will motivate investment to host country(Tรธndel, 2001)[3]. Likewise the natural resources,
IFDI policy which has been measured by share of trade in GDP has high significance with its negative sign
coefficient -2.42, for investors perhaps it is important that Kyrgyzstan need to have open IFDI policy that
stimulate the trade so that investors can export their outputs to other markets easily. This result is consistent with
the (Ranjan & Agrawal; James P.Walsh; Lim;Shaukat Ali) who found statistically significant IFDI policy in
many countries[13][17][18][19]. Results of insignificance of macroeconomic stability and ODA are reliable as
(Azam; Wunnava; Claudio Felisoni de) researched[1][4][20]. (Azam, 2010) also found that inflation rate which
is indicator of economy health and ODA are insignificant for Kyrgyzstan[1]. Concerning to the insignificance of
GDP, (Shahmoradi et al., 2010) also argue that there is no correlation between GDP and IFDI[21]. Therefore
somehow analysis results are can be said as consistent with other scholarsโ researches.In case of Kazakhstan
according to the empirical results GDP found as significant with its negative sign. As GDP is the best factor of
country development perhaps investors do care about current factor. (Tรธndel; Wunnava; Grosse & Trevino) also
found the GDP as significant factor in attracting IFDI[3][4][22]. Taking into consideration that Kazakhstan has
the highest economic growth among selected countries, as well as last decade current country attracted highest
IFDI amount. In this case it is possible to predict that GDP is significant factor in attracting IFDI. Another
significant variable found as macroeconomic stability as it was predicted with its negative sign. No doubt that
inflation is the indicator of health of economy, therefore there is negative correlation. This result is the same as
founding of(Andrzjei Baniak et al.; Azam). One of the traditional determinants natural resources found as
significant with its negative coefficient -0.15, Kazakhstan has the large reserves of oil and gas. Possibly
investors do care about the availability of natural resources as a primary motive. However the minus sign of the
variable is not consistent with the other scholars findings however with the very low significance this factor may
not be important in attracting FDI. Infrastructure, ODA and IFDI policy found as statistically insignificant and
their sign found as positive. Consequently these findings are constant with the researches of (James P.Walsh;
Wunnava). In case of Uzbekistan the macroeconomic stability found as significant with negative sign. So far it
is consistent with above mentioned scholars (Andrzjei Baniak et al.; Azam). Maybe the investors do pay
attention on host country macroeconomic steadiness. No doubt that inflation is one of the important factorsin
determining the FDI. Natural resources variable has been found as significant factor with positive sign of
coefficient 0.014. Uzbekistan exports gas most of its neighbors which attracts IFDI. Maybe the investors are
willing to invest in this country because of natural resources availability. Recent research finding regarding to
the natural resources identical with the (Tรธndel, 2001). Contradicting with its negative sign of coefficient -0.001
IFDI policy has also indicated by our analysis as significant. It is obvious that trade is the important factor in
attracting the IFDI. Because investors would like to export and import the goods consequently FDI would be
motivated by open IFDI policies which make the business easier. Many scholars (Armstrong; Asiedu; Grosse &
Trevino; Lim; Shaukat Ali) among them (Sinha)argue that one of the main motivator of IFDI essentially would
be the trade openness policies[23]. However the analysis shows that negative sign which may indicate that
6. Determinants of IFDI in Central Asian Countries: Econometric Analysis
International Journal of Business Marketing and Management (IJBMM) Page 27
maybe the IFDI policies are not well open to trade easily. Like in Kazakhstan case of infrastructure and ODA in
Uzbekistan case found as statistically insignificant since their t-values are 1.21 and 0.80 respectively with
positive sign. Also in literature review of recent research it has been cited (Azam; Mateev), authors also found
above mentioned variables as insignificant.Last analysis output reflects about the Tajikistan. Based on the
analysis output current research found GDP as significant factor with its t-stat value -0.20 and -1.04 coefficient
values.(Grosse & Trevino, 1996) also found GDP is significant with tis minus sign. Next macroeconomic
stability found as significant with negative sign and t-value is -1.21. Of course macroeconomic uncertainty will
make the investors worry about future potential of the host market. Consequently the inconsistent of
macroeconomic stability will demotivate the investors. This result is consistent with (Asiedu; Azam; Wunnava)
who indicated that there is negative correlation between IFDI and inflation. IFDI policy variable which has
measured in trade openness determined as significant with -0.69 t-statistics value. This means that Tajikistan
doesnโt have enough open trade policies which can motivate the capital inflow. Also (Grosse & Trevino;
Shaukat Ali) found IFDI policy as statistically significant. Tajikistan ranks last in economic development and in
attracting FDI among selected countries. With same negative sign the availability of natural resources has been
found as significant with -0.84 t-statistics value. In general natural resource as a traditional determinant of IFDI
has positive impact however in Tajikistan case it contradicts to the results of (Asiedu; Tรธndel). Interestingly in
Tajikistan case ODA and infrastructure have been determined as insignificant with its positive coefficient sign,
perhaps investors donโt take into consideration this factor as an important determinant in investing in Tajikistan.
Therefore findings concerned with the ODA and infrastructure are consistent with the findings of (Azam; James
P.Walsh; Mateev)
Overall by concluding present chapter it can be stated that most significant factors are macroeconomic
stability, natural resources and IFDI policy found almost in all selected countries. It is possible to say that there
is need to improve trade openness policies which can motivate the investment. And macroeconomic stability
also one of the main factors that influence the investors decision making because investors worry about the
certainty of macroeconomic growth in order to make sure that return on investment would be reliable. Natural
resource without any discussions is one of vital factors which motivate the FDI inflow to host country. Central
Asia with its huge potential of natural resources can attract the investors.
II. FIGURES AND TABLES
Figure 1: IFDI to Kazakhstan by Industries and by Countries, 2015
Source: National Bank of Kazakhstan
Figure 2: IFDI to Kyrgyzstan by Industries and by Countries, 2015
Source: National Statistic Committee of Kyrgyzstan
7. Determinants of IFDI in Central Asian Countries: Econometric Analysis
International Journal of Business Marketing and Management (IJBMM) Page 28
Figure 3: IFDI to Tajikistan by Industries and by Countries, 2015
Source: Statistical Agency of Tajikistan
Figure 4: IFDI to Uzbekistan by Industries and by Countries, 2015
Source: Fianacial Times fDi Intelligence
Table 1:GDP Growths in Central Asia
Country 1990-1995 1996-2000 2000-2005 2006 2007 2008 2009 2010
Kyrgyzstan -1.55% 3.47% 4.96% -0.18% 3.10% 8.54% 8.40% 2.89%
Kazakhstan -1.26% 2.56% 10.38% 10.7% 8.9% 3.3% 1.2% 7.3%
Uzbekistan -0.52% 3.86% 5.42% 7.30% 9.50% 9.00% 8.10% 8.50%
Tajikistan -2.13% 0.46% 10.12% 6.70% 7% 7.80% 7.90% 3.80%
Source: World Development Indicators (WB Database)
Table 2: Role of Foreign Enterprises, 2016, (%)
Kazakhstan Kyrgyzstan Tajikistan
Gross output n/a n/a 4.0
Industrial output 61.0 32.6 n/a
Exports 66.2 67.9 n/a
Employment 5.4 2.6 n/a
Source: Transition Report 2010 (EBRD)
8. Determinants of IFDI in Central Asian Countries: Econometric Analysis
International Journal of Business Marketing and Management (IJBMM) Page 29
Table 3:Explanatory Variables
Variables Measurement Type of FDI
1 IFDI 100*IFDI/GDP
2 Market Size log(GDP) Market Seeking
3 ODA log(ODA) Efficiency
4 IFDI Policy Openness to IFDI Efficiency Seeking
5 Macroeconomic Stability Inflation Rate Efficiency Seeking
6 Infrastructure log(Telephone lines (per 100
people))
Efficiency Seeking
7 Natural Resources (Total natural resources
rents (% of GDP)
Resource Seeking
Source: Authoring
Table 4: Estimated RegressionLines
ifdi=-203.510+1.9684*log(gdp)+0.0037*inflation-5.3861*log(infrastructure)+9.3285*log(oda)-
0.0211*fdipol-2.4232*natural_res (1)
ifdi=75.9952-5.8536*log(gdp)-
0.0030*inflation+23.7756*log(infrastructure)+0.3363*log(oda)+0.0904*fdipol-0.1501*natural_res
(2)
ifdi=-27.8618+1.0889*log(gdp)-0.0007*inflation+0.2828*log(infrastructure)+0.2994*log(oda)-
0.0014*fdipol+0.01459*natural_res (3)
ifdi=-313.8263-1.0456*log(gdp)-0.0062*inflation+117.510*log(infrastructure)+6.7332*log(oda)-
0.0237*fdipol-0.0985*natural_res (4)
Source: Authoring
Table 5:Fixed Effect Estimation Results
Variables Kyrgyzstan Kazakhstan Uzbekistan Tajikistan
Dependent Variable =100*FDI/GDP
Intercept -203.5108*
(-2.3507)
75.9952
(0.99)
-27.8618*
(-1.9783)
-313.8264*
(-1.7479)
Market Size= Log(GDP) 1.9684
(0.5278)
-5.8536.*
(-1.3924)
1.0889
(2.0905)
-1.0456*
(-0.2010)
Macroeconomic
Stability=Inflation
0.0037
(0.8531)
-0.0030*
(-1.1065)
-0.0007*
(-1.1112)
-0.0062*
(-1.2192)
9. Determinants of IFDI in Central Asian Countries: Econometric Analysis
International Journal of Business Marketing and Management (IJBMM) Page 30
Infrastructure= Log(Telephone
lines (per 100 people)
-5.3861*
(-0.2710)
23.7756
(1.6883)
0.2828
(1.2162)
117.5101
(1.4314)
Natural Resources=Total
natural resources rents (% of
GDP)
-2.4232*
(-1.0459)
-0.1501*
(-0.8816)
0.0145**
(0.0145)
-0.0985*
(-0.8453)
log(ODA) 9.3285
(2.4868)
0.3363
(0.1646)
0.2994
(0.8034)
6.7332
(1.4297)
IFDI Policy= (Openness to
IFDI)
-0.021*
(-0.3633)
0.0904
(0.9574)
-0.0014*
(-0.069)
-0.0237*
(-0.6979)
R2 0.6303 0.5826 0.7488 0.5829
No. of Observations 17 18 18 17
Source: Authoring
Note:Values given in parenthesis represent t-stats, significance *0.01 and **0.05
III. CONCLUSION
Findings of the recent study can be used in identifying the factors of investment as well as in analyzing
business climate and identify the possible barriers of IFDI in selected Central Asian countries. Current research
chose only seven variables, however the other variables also can be added in future studies like corruption,
transition indicators, etc., or either some other variables can be grouped according to their significance on the
different type of IFDI. For example policy variables, institutional variables and political risk or country risk
variables so that from these analyses it is easier to retrieve the accurate outputs.
IV. Acknowledgement
I would like to express my deep gratitude to my supervisorprofessor Hongbing You for his advises,
support and direction during the whole research and my study; thanks to School of International Education for
supporting my life in Nanjing since my arrival; thanks to Nanjing University of Science and Technology and
Chinese government forsponsoring whole my study and providingsuch a great opportunity to conduct this paper.
Special thanks to my family for their trust and faith in me...
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