FDI fluctuations followed by GDP fluctuations in Kosovo and favoring particul...nakije.kida
This paper examines the main trends of FDI (Foreign Direct Investment) in Kosovo. Kosovo
as a country that had just emerged from war in 1999, with frequent changes of laws and
adoption of economic liberalization measures made very large strides in democracy and
international recognition of statehood. Fluctuations of FDI in Kosovo in the past 12 years link
these directly in the two macroeconomic indicators clearly express how important is the
stability of the country. GDP growth rate in Kosovo with a great opportunity for investors, one
more chance for the local population to find a new job. The perception of investors that there
is no risk to invest in Kosovo increased FDI flows. Success of Kosovo to boost foreign
investment becomes accessible if not delayed accession to the EU. All these factors have led
to a satisfactory level of the FDI in Kosovo, but economic and political context is crucial.
Kosovo has significant structural mismatch economy compared to countries in the region. This
information allows us to create a more favorable institutional framework for investment,
facilitates an investor to take a decision to invest quickly. From an investment perspective in
Kosovo economic structure, trends seen that capital to invest in some sectors. Investments in
the industrial sector (manufacturing) in mining, energy, construction, trade and services have
been attractive to foreign investors.
Tax Incentives and Foreign Direct Investment in Nigeriaiosrjce
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.
Obstacles Encountered by Foreign Investors in Kosovonakije.kida
Abstract: The purpose of the paper is finding obstacles that led to the reduction of foreign ivestitors’ motive to
come to Kosovo. Through the survey was taken the opinion of the sample from 306 current investors with 100%
foreign capital operating in Kosovo. Descriptive analysis has depicted the main obstacles in their business
activity. Weak enforcement of law, corruption, failure to integrate into the EU, poor infrastructure, lack of
financial incentives, poor business climate, highlighted poverty, frequent legal changes are part of these
obstacles. However, Kosovo has the youngest workforce in Europe, well educated and who speak more than one
language. Multiple natural properties make it attractive, toond. The main conclusion that can be drawn from the
above findings is that Kosovo has not become fully available to all mechanisms to welcome the foreign investors.
It is suggested that the government comes up with concrete projects to stimulate investors and create the
necessary climate to develop their business.
Keywords: Foreign Investors in Kosovo; Obstacles encountered by investors, Surveys, Descriptive analysis.
Capital Inflows and Economic Growth A Comperative Studyiosrjce
This study examines the impact of capital inflows on economic growth of developing* economies; the
case of Nigeria Ghana and India from 1986-2012. This is necessitated by the doubts being raised as whether the
huge inflows of foreign capita! in developing economies over the years have transmitted to real economic
growth. Augmented Dickey Fuller unit root test was employed to evaluate the stationarity of the data, while
Johansen Co-integration was used to estimate the long-run equilibrium relationship among the variables. The
casual relationship was tested using Granger Causality, and Ordinary Least Square method was used to
estimate the model. The finding reveals that capital inflows have significant impact on the economic growth of
the three countries. In Nigeria and Ghana, foreign direct and portfolio investment and foreign borrowings have
significant and positive impact on economic growth. Workers' remittances significantly and positively related to
the economic growth of the three countries. The enabling environment should be created in the Developing
Countries to encourage more inflow of foreign investments and workers remittances while India specifically
should channel their foreign aids to productive ends. This will help in dosing the savings-investment gap and
encourage economic growth in these countries. The study signifies that capital inflows is indispensable in
dosing the savings-investment gap required for economic growth of developing countries.
Foreign Direct Investments into UkraineEasyBusiness
Foreign direct investment as one of the main vehicles of development and globalization in the
World economy is a complex phenomenon.
Most common definition used in the modern economic theory states that Foreign Direct
Investment (FDI) – “is acquisition of at least ten percent of the ordinary shares or voting power
in a public or private enterprise by nonresident investors. Direct investment involves a lasting
interest in the management of an enterprise and includes reinvestment of profits.”1
It is important to understand that FDI is not just the flow of capital between economies but also
a flow of technologies, management practices and established customer/supplier bases.
Usually FDI has a spillover effect for the host economy when management practices and
technologies are propagated from the initial target company to other companies in the region.
This propagation is achieved through moving labor force, reverse-engineering and intensified
competition.
FDI is crucial for Developing and Transition economies not just because they suffer from the
lack of capital but because they don’t have access to new technologies and their managerial
and business techniques are outdated.
Different countries have achieved different results in their ability to attract FDI. In order to
analyze reasons driving country specific performance it is important to look at the following
issues:
- Dynamics and trends of global FDI flows
- General investment climate in a given country
- Industry specific opportunities provided by current situation in the host economy
This framework is used to analyze Ukraine’s competitive positioning to attract foreign direct
investment.
FDI fluctuations followed by GDP fluctuations in Kosovo and favoring particul...nakije.kida
This paper examines the main trends of FDI (Foreign Direct Investment) in Kosovo. Kosovo
as a country that had just emerged from war in 1999, with frequent changes of laws and
adoption of economic liberalization measures made very large strides in democracy and
international recognition of statehood. Fluctuations of FDI in Kosovo in the past 12 years link
these directly in the two macroeconomic indicators clearly express how important is the
stability of the country. GDP growth rate in Kosovo with a great opportunity for investors, one
more chance for the local population to find a new job. The perception of investors that there
is no risk to invest in Kosovo increased FDI flows. Success of Kosovo to boost foreign
investment becomes accessible if not delayed accession to the EU. All these factors have led
to a satisfactory level of the FDI in Kosovo, but economic and political context is crucial.
Kosovo has significant structural mismatch economy compared to countries in the region. This
information allows us to create a more favorable institutional framework for investment,
facilitates an investor to take a decision to invest quickly. From an investment perspective in
Kosovo economic structure, trends seen that capital to invest in some sectors. Investments in
the industrial sector (manufacturing) in mining, energy, construction, trade and services have
been attractive to foreign investors.
Tax Incentives and Foreign Direct Investment in Nigeriaiosrjce
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.
Obstacles Encountered by Foreign Investors in Kosovonakije.kida
Abstract: The purpose of the paper is finding obstacles that led to the reduction of foreign ivestitors’ motive to
come to Kosovo. Through the survey was taken the opinion of the sample from 306 current investors with 100%
foreign capital operating in Kosovo. Descriptive analysis has depicted the main obstacles in their business
activity. Weak enforcement of law, corruption, failure to integrate into the EU, poor infrastructure, lack of
financial incentives, poor business climate, highlighted poverty, frequent legal changes are part of these
obstacles. However, Kosovo has the youngest workforce in Europe, well educated and who speak more than one
language. Multiple natural properties make it attractive, toond. The main conclusion that can be drawn from the
above findings is that Kosovo has not become fully available to all mechanisms to welcome the foreign investors.
It is suggested that the government comes up with concrete projects to stimulate investors and create the
necessary climate to develop their business.
Keywords: Foreign Investors in Kosovo; Obstacles encountered by investors, Surveys, Descriptive analysis.
Capital Inflows and Economic Growth A Comperative Studyiosrjce
This study examines the impact of capital inflows on economic growth of developing* economies; the
case of Nigeria Ghana and India from 1986-2012. This is necessitated by the doubts being raised as whether the
huge inflows of foreign capita! in developing economies over the years have transmitted to real economic
growth. Augmented Dickey Fuller unit root test was employed to evaluate the stationarity of the data, while
Johansen Co-integration was used to estimate the long-run equilibrium relationship among the variables. The
casual relationship was tested using Granger Causality, and Ordinary Least Square method was used to
estimate the model. The finding reveals that capital inflows have significant impact on the economic growth of
the three countries. In Nigeria and Ghana, foreign direct and portfolio investment and foreign borrowings have
significant and positive impact on economic growth. Workers' remittances significantly and positively related to
the economic growth of the three countries. The enabling environment should be created in the Developing
Countries to encourage more inflow of foreign investments and workers remittances while India specifically
should channel their foreign aids to productive ends. This will help in dosing the savings-investment gap and
encourage economic growth in these countries. The study signifies that capital inflows is indispensable in
dosing the savings-investment gap required for economic growth of developing countries.
Foreign Direct Investments into UkraineEasyBusiness
Foreign direct investment as one of the main vehicles of development and globalization in the
World economy is a complex phenomenon.
Most common definition used in the modern economic theory states that Foreign Direct
Investment (FDI) – “is acquisition of at least ten percent of the ordinary shares or voting power
in a public or private enterprise by nonresident investors. Direct investment involves a lasting
interest in the management of an enterprise and includes reinvestment of profits.”1
It is important to understand that FDI is not just the flow of capital between economies but also
a flow of technologies, management practices and established customer/supplier bases.
Usually FDI has a spillover effect for the host economy when management practices and
technologies are propagated from the initial target company to other companies in the region.
This propagation is achieved through moving labor force, reverse-engineering and intensified
competition.
FDI is crucial for Developing and Transition economies not just because they suffer from the
lack of capital but because they don’t have access to new technologies and their managerial
and business techniques are outdated.
Different countries have achieved different results in their ability to attract FDI. In order to
analyze reasons driving country specific performance it is important to look at the following
issues:
- Dynamics and trends of global FDI flows
- General investment climate in a given country
- Industry specific opportunities provided by current situation in the host economy
This framework is used to analyze Ukraine’s competitive positioning to attract foreign direct
investment.
This paper investigated the performance of FDI in Kosovo. FDI flows
continue to be provided for development of Kosovo. Sector restructuring of
the economy and allocation of FDI has special importance. The development
of manufacturing sector and processing industry and tourism in some
territories of Kosovo is also a challenge that must be resolved because it
will affect economic development, employment generation continued.
Withdrawal of modern technology in these sectors would help in
maintaining the balance between the different benefits and a clean
environment. Environmental concerns caused by FDI in some territories of
Kosovo are fundamental problems that require solutions. Elimination of
barriers to FDI, the strengths and weaknesses that were offered to investors
are the primary issues that attract investment. Except FDI are in positive
correlation with GDP, at the national level factors of human resource
allocation are important in the territories where the population movement
due to the economic stagnation, and such cases can be found in Kosovo.
Keywords: Flow of FDI, The restructuring of the economy, The allocation of FDI,Environmental concerns.
The positive impact of fdi in many sectors of the economy that Kosovo but not...nakije.kida
Abstract
In this paper is investigated Kosovo great desire to integrate into the global network of investment after
a war. FDI flows continue to be provided for development of Kosovo. The development of
manufacturing sector and processing industry and tourism in some territories of Kosovo is also a
challenge that must be resolved because it will affect economic development, employment generation
continued. Withdrawal of modern technology in these sectors would help in maintaining the balance
between the different benefits and a clean environment. Environmental concerns caused by FDI in some
territories of Kosovo are fundamental problems that require solutions. Elimination of barriers to FDI,
the strengths and weaknesses that were offered to investors are the primary issues that attract
investment. Except FDI are in positive correlation with GDP, at the national level factors of human
resource allocation are important in the territories where the population movement due to the
economic stagnation, and such cases can be found in Kosovo.
Keywords
Kosovo after the war, impact of FDI, desire for global integration, living standard, sectors,
environment
Foreign Investment and Its Effect on the Economic Growth in Nigeria: A Triang...iosrjce
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.
Impact of Exchange rate volatility on FDI in PakistanIOSR Journals
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.
Determinants of Foreign Direct Investment in Nigeriaijtsrd
Extant literature is replete with the benefit of attracting Foreign Direct Investment FDI into an economy, it not only provides developing countries with the much needed capital for investment it also enhances job creation, managerial skills as well as transfer of technology. However, attracting and sustaining FDI inflow in Nigeria have remained a teething problem. This study therefore examined the determinants of foreign direct investment in Nigeria. Specifically the study provides empirical evidence on the influence trade openness, market size, infrastructure, human capital, labour force, natural resources, exchange rate and inflation rate on Foreign Direct Investment FDI in Nigeria using an econometric regression technique of the Ordinary least square OLS . The findings of the study also show that trade openness, market size, infrastructure, exchange rate and inflation rate are statistically significant in explaining the foreign direct investment in Nigeria while human capital, labour force and natural resources are statistically insignificant in explaining the growth of foreign direct investment in Nigeria. The study recommends that The government should make polices that will create a business friendly environment to attract FDI inflows in economy. The government should provide the needed leadership and also ensure political stability in the country. This will attract investors to take the advantage of the market size of the country to FDI into the economy. The government should make policies that will favour trade openness. Trade openness is found to be factor that attracts investors invest in the country. This is lesser barriers to trade encourages investment and the government should provide the needed infrastructure. Necessary infrastructures that will reduce the cost of doing business should be the watch word of every government. Dibua, Emmanuel Chijioke | Edoko, Tonna David | Onwuteaka, Ifeoma Cecilia "Determinants of Foreign Direct Investment in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-5 , August 2019, URL: https://www.ijtsrd.com/papers/ijtsrd25293.pdfPaper URL: https://www.ijtsrd.com/management/public-sector-management/25293/determinants-of-foreign-direct-investment-in-nigeria/dibua-emmanuel-chijioke
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Foreign Direct Investment (FDI) in BangladeshTAREK MAHMUD
This is the presentation slide of foreign direct investment of Bangladesh and world perspective. Here you will find the detail Definition, Objectives, Motives, Types, Strategies, Theories of FDI with example. You will also find the recent fact and figure of FDI on Bangladesh perspective and world perspective.
Foreign Direct Investment. Political Economic Digest Series - XVIAkash Shrestha
In this issue, we will be discussing about Foreign Direct Investment (FDI).
Foreign Direct Investment has been a very productive tool for the economic growth of many countries. Recently after the government made the decision to celebrate 2012/13 as investment year and after the agreement with India i.e. Bilateral Investment Promotion and Protection Agreement, the topic of Foreign Direct Investment has been highly discussed among the lawmakers, policymakers and general public. The examples provided in this issue of different countries regarding FDI has shown how the growth rate is positively affected by the investment from outside the country.
This paper investigated the performance of FDI in Kosovo. FDI flows
continue to be provided for development of Kosovo. Sector restructuring of
the economy and allocation of FDI has special importance. The development
of manufacturing sector and processing industry and tourism in some
territories of Kosovo is also a challenge that must be resolved because it
will affect economic development, employment generation continued.
Withdrawal of modern technology in these sectors would help in
maintaining the balance between the different benefits and a clean
environment. Environmental concerns caused by FDI in some territories of
Kosovo are fundamental problems that require solutions. Elimination of
barriers to FDI, the strengths and weaknesses that were offered to investors
are the primary issues that attract investment. Except FDI are in positive
correlation with GDP, at the national level factors of human resource
allocation are important in the territories where the population movement
due to the economic stagnation, and such cases can be found in Kosovo.
Keywords: Flow of FDI, The restructuring of the economy, The allocation of FDI,Environmental concerns.
The positive impact of fdi in many sectors of the economy that Kosovo but not...nakije.kida
Abstract
In this paper is investigated Kosovo great desire to integrate into the global network of investment after
a war. FDI flows continue to be provided for development of Kosovo. The development of
manufacturing sector and processing industry and tourism in some territories of Kosovo is also a
challenge that must be resolved because it will affect economic development, employment generation
continued. Withdrawal of modern technology in these sectors would help in maintaining the balance
between the different benefits and a clean environment. Environmental concerns caused by FDI in some
territories of Kosovo are fundamental problems that require solutions. Elimination of barriers to FDI,
the strengths and weaknesses that were offered to investors are the primary issues that attract
investment. Except FDI are in positive correlation with GDP, at the national level factors of human
resource allocation are important in the territories where the population movement due to the
economic stagnation, and such cases can be found in Kosovo.
Keywords
Kosovo after the war, impact of FDI, desire for global integration, living standard, sectors,
environment
Foreign Investment and Its Effect on the Economic Growth in Nigeria: A Triang...iosrjce
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.
Impact of Exchange rate volatility on FDI in PakistanIOSR Journals
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.
Determinants of Foreign Direct Investment in Nigeriaijtsrd
Extant literature is replete with the benefit of attracting Foreign Direct Investment FDI into an economy, it not only provides developing countries with the much needed capital for investment it also enhances job creation, managerial skills as well as transfer of technology. However, attracting and sustaining FDI inflow in Nigeria have remained a teething problem. This study therefore examined the determinants of foreign direct investment in Nigeria. Specifically the study provides empirical evidence on the influence trade openness, market size, infrastructure, human capital, labour force, natural resources, exchange rate and inflation rate on Foreign Direct Investment FDI in Nigeria using an econometric regression technique of the Ordinary least square OLS . The findings of the study also show that trade openness, market size, infrastructure, exchange rate and inflation rate are statistically significant in explaining the foreign direct investment in Nigeria while human capital, labour force and natural resources are statistically insignificant in explaining the growth of foreign direct investment in Nigeria. The study recommends that The government should make polices that will create a business friendly environment to attract FDI inflows in economy. The government should provide the needed leadership and also ensure political stability in the country. This will attract investors to take the advantage of the market size of the country to FDI into the economy. The government should make policies that will favour trade openness. Trade openness is found to be factor that attracts investors invest in the country. This is lesser barriers to trade encourages investment and the government should provide the needed infrastructure. Necessary infrastructures that will reduce the cost of doing business should be the watch word of every government. Dibua, Emmanuel Chijioke | Edoko, Tonna David | Onwuteaka, Ifeoma Cecilia "Determinants of Foreign Direct Investment in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-5 , August 2019, URL: https://www.ijtsrd.com/papers/ijtsrd25293.pdfPaper URL: https://www.ijtsrd.com/management/public-sector-management/25293/determinants-of-foreign-direct-investment-in-nigeria/dibua-emmanuel-chijioke
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Foreign Direct Investment (FDI) in BangladeshTAREK MAHMUD
This is the presentation slide of foreign direct investment of Bangladesh and world perspective. Here you will find the detail Definition, Objectives, Motives, Types, Strategies, Theories of FDI with example. You will also find the recent fact and figure of FDI on Bangladesh perspective and world perspective.
Foreign Direct Investment. Political Economic Digest Series - XVIAkash Shrestha
In this issue, we will be discussing about Foreign Direct Investment (FDI).
Foreign Direct Investment has been a very productive tool for the economic growth of many countries. Recently after the government made the decision to celebrate 2012/13 as investment year and after the agreement with India i.e. Bilateral Investment Promotion and Protection Agreement, the topic of Foreign Direct Investment has been highly discussed among the lawmakers, policymakers and general public. The examples provided in this issue of different countries regarding FDI has shown how the growth rate is positively affected by the investment from outside the country.
Effect of FDI Inflows on Real Sector Economy of Nigeriaijtsrd
The study have examined the effect of sectorial FDI to economic growth of Nigeria within 34 year period spanning 1987 to 2020. FDI was disaggregated into four variables being agriculture, construction, manufacturing, and oil and gas as the independent variable. Economic growth was the dependent variable. The data were obtained from CBN statistical bulletin and Annual reports. The repression analysed using the ARDL technique. The results showed that FDI to various sector of the economy has significant long run effect on economic growth of Nigeria. Furthermore, The short run dynamic results revealed that 1 FDI to agriculture has interjecting effect with positive effect in the first lag 1 and successive negative effects in lags 2 and 4 2 FDI to construction have a significant positive effect on economic growth 3 FDI to manufacturing sector has negative effect on economic growth and 4 FDI to oil and gas sector has positive effect on economic growth. The study posits that FDI inflows is a veritable driver to economic growth to developing economies like Nigeria. Among the recommendations of this study is that the government should encourage local investment into the agriculture and manufacturing to cushion the adverse impact of FDI to Nigeria growth. Ositadimma Victor Okpalla | Sylvia Chikodi Anaele | Ifeanyi Jude Ekwunife "Effect of FDI Inflows on Real Sector Economy of Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-6 , October 2022, URL: https://www.ijtsrd.com/papers/ijtsrd51910.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/51910/effect-of-fdi-inflows-on-real-sector-economy-of-nigeria/ositadimma-victor-okpalla
Inflation Rate, Foreign Direct Investment, Interest Rate, and Economic Growth...ijtsrd
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
New Evidence on the Determinants of Foreign Direct Investments in Emerging Ma...ijtsrd
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 capital inflow (KI) is arguably a vital source of external capital, especially for developing countries with low domestic savings rate. Investigating the trend of KI into Nigeria, we observed that as a ratio of GDP it was 0.67% in 1979, 6.88% in 1989, 9.45% in 1999, and 19.31% in 2009. Thus, this study �Foreign Capital Inflow and Domestic Private Investment in Nigeria � A Disaggregated Model� is intended to examine the relationship among aggregate KI and domestic private investment (DPI) on one hand, and disaggregated KI and DPI on the other in the period 1986Q1-2012Q4. Variables such as DPI, KI, three inflow components: (foreign direct investment (FDI), portfolio investment (PFI), and remittances (REM)) and dummy are employed. The framework of Khan (2011) which expressed DPI as a function of the explanatory variables was modified and adopted. With coefficient of -0.021 and t-statistic of -0.968 for the first model, the results reveal that aggregate KI has inverse but insignificant relationship with DPI in the short and long run. When disaggregated (second model), FDI coefficient is 0.190 with t-statistic value of 3.013 indicative that the variable has significant growth-inducing impact on DPI. The coefficients of PFI and REM are -0.017 and -0.121 with t-statistic values of -1.105 and -4.887 respectively, suggestive that both have depressing impact on DPI. The joint depressing impact of PFI and REM on DPI is greater than the expansionary impact of FDI on DPI. The coefficient of dummy was found to be significantly positive in determining DPI.
The study is on the effect of Net capital inflow on inclusive growth in Nigeria. This study seeks to deepen the understanding on how capital inflow creates opportunity for inclusive growth in Nigeria through increase in GDP per capita. The objective of the study were to : determine the effect of Net capital inflow , Net foreign direct investment and trade openness on inclusive growth in Nigeria. The study employed the time series data in its analysis. The period of analysis spanned through 1980-2015 and the dataset required for the analysis were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and National bureau of statistics publications. The study conducted trend analysis, descriptive analysis. The data were also tested for stationarity using the Augmented Dickey Fuller (ADF) unit root test and Ordinary Least Square (OLS) analytical techniques, cointegration test and error correction mechanism. It was evident from the unit root test that the variables were fractionally integrated while the cointegration test reveals that long run relationship exists among the variables. The findings equally reveal that capital inflow exerts significant negative influence on GDP per capita. This could be attributed to the problem of managing external capital flows which has been sub-optimal in most developing economies including Nigeria. The implication of this finding is that the perceived benefits that are associated with capital inflows tend not to hold sway in Nigeria over the sampled period which may be attributed to institutional and governance failure. Owing to the findings, this study recommends for the adoption of investment friendly policies and ensure transparency and good governance, appropriate economic management practices capable of supporting reforms in the Nigerian financial system and guide international capital inflows to ensure that the associated economic turnarounds are people-centered.
Similar to The determinants of foreign direct investments attractiveness to host countries case studied algeria (20)
The determinants of foreign direct investments attractiveness to host countries case studied algeria
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The Determinants of Foreign Direct Investments Attractiveness to
Host Countries:Case studied Algeria
Midoun Sissani(Corresponding author)
Faculty of Economic , Management and Commercial Sciences
University Ibn- Khaldoun,Tiaret,BP P 78 zaâroura 14000, Tiaret(14000) , Algeria
Email: sissanim@gmail.com
Pr.Zairi Belkacem
Faculty of Economic and Management Sciences and Commercial Sciences,OranUniversity,Oran
(310000),Algeria
Email: zairi_belkacem@yahoo.fr
Abstract
The aim of this paper is to study the relation betweencountry risk, inflation, GDP, FX reserves, exports and their
impact onforeign direct investments (FDI) attractiveness to Algeria. The multiple linearregression models during
1990-2012 showed a negative relationship with inflation with R= 0.92 and R2
= 0.85.
Keywords : Attractiveness, competitiveness, diversification, foreign direct investments, countryrisks.
Classification JEL : C13, C25, F21, F18, F30, F41.
1.Introduction
The future and the economic prosperity of Algeria depend on foreign direct investment inflows. With reference
to the importance and the great need to diversification of income resources and Risk reduction of over-reliance
on hydrocarbon revenues that exceeded 95% during the period studied which is causing the fragility of the
national economy. Moreover,Algeria requires a very high average oil price in order to cover domestic spending.
2011 and 2012 witnessed numerous economic and political events and although Algeria was not so much
affected by Arab Spring which led to the declination of lot of FDI projects Thus, the World Investment
Report2012 notes (Unctad, 2012)illustrated that North Africa starts to see signs of a revival in cross-border
investment activities, after declines rooted in the area’s political turmoil in 2011. FDI flows to North Africa
increased by 35 per cent to $11.5 billion in 2012. Much of this increase was accounted for by a turnaround in
Egypt, where inflows climbed from a net divestment of $0.5 billion in 2011 to a positive $2.8 billion in 2012.
The economy of Algeria is heavily dependent on petroleum and natural gas and the government tried to adapt
serious liberalization mechanism to achieve diversification in sources of income but The hydrocarbon sector
remain dominate and contribute over 50% to GDP and more than 96% to government revenues(Joffé,
George,2002).
Recently, Algeria as one of the greatest oil exporter tries to promote non The hydrocarbon exports through
encouraging privatization ,FDI and fiscal facilities, liberalization of foreign trade(Haussmann, R., Klinger, B., &
Lopez-Calix, J. 2010).
The fifth edition of The IMF’s balance of payment manual defines as a foreign direct investments the non-
resident who owns and control 10 % of the ordinary shares or voting power in a public or private
companyFalzoni, A. M. (2000). Statistics on foreign direct investment and multinational corporations: a survey.
(Falzoni, Anna M,2000).
2. Literature Review and Theoretical Framework
Many theoretical and empirical studies discussed the different factors which influence investors and
multinational enterprises international(MNEs)entries in research on the factors that determine FDI patterns and
the impact of MNCs on parent and host countries. (Sissani, M., &Belkacem, Z,2014) studied the Impact of
country risk on the attractiveness of FDI TOWARDS Algeria and found out that the economic risk matter
most .However, (Wei, S. J,2000) studied other factors such as GDP, inflation rate ,the exchange reserves and
the effect of exchange rate movements on FDI.There are many theoretical papers that examined the effect of
inflation ,GDP ,country risk ,the foreign exchange reserves on the FDI .According to (Ehimare, Omankhanlen
Alex,2011) inflation has no effect on foreign direct investments but he find that exchange rate has an obvious
effect .In Algeria inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket of
goods.
The Algeria’s inflation rate increased from 4.5% in 2011 to 8.9% in 2012, this is due to the high prices of some
fresh products during the first half of 2012. Graph1 shows the development of the inflation rate in Algeria in the
period studied.
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Graphique 1:. Inflation rate in Algeria from 1990 to 2012.
Source : Bank of Algeria, report 2012.From : http://www.bank-of-algeria.dz/
According to (Jadhav, P,2012) who used a panel data and and multiple regressions for the period (2000-2009) to
examine the determinants of FDI in (BRICS)Countries : Brazil, Russia, India, China and South Africa . The
study took some economic determinates such as: Market Size, Trade openness and some Macroeconomic as
Inflation Rate, political stability beside Corruption and Rule of Law.Findings indicate that economics factors are
more significant than institutional and political Factors in BRICS economies. On other hands, Trade openness
and Real GDP are significant determinates of FDI. However, (Kok, Recep, and BernurAcikgoz Ersoy,2009)
using both a panel of data and cross-section for 24 developing countries, during the period 1983-2005 found that
the interaction of FDI with the total debt service/GDP and inflation have a negative impact.
However ,(Djankov, Simeon, et al,2008)and(Dorn, James A.,2012) Both think that developed and developing
countries have engaged in the construction of a great funds of foreign exchange reserves. These assets are
generally controlled and held by central banks and monetary authorities .They are used in the balance of
payments needs or to face a situation where supply and demand would tend to push the value of the currency
lower or higher or in the sterilization process to protect the domestic monetary base. The outstanding foreign
exchange reserves of Algeria reached 190.66 billion dollars at the end of 2012 against 182.22 billion dollars in
2011.
However (Djankov, Simeon, et al,2008)and(Dorn, James A.,2012) Both think that developed and developing
countries have engaged in the construction of a great funds of foreign exchange reserves these assets are
generally controlled and held by central banks and monetary authorities .They are used in the balance of
payments needs or to face a situation where supply and demand would tend to push the value of the currency
lower or higher or in the sterilization process to protect the domestic monetary base. The outstanding foreign
exchange reserves of Algeria reached 190.66 billion dollars at the end of 2012 against 182.22 billion dollars in
2011.On other hands, (Zairi, Belkacem.,Bachir,A.K, 2010) investigated the relationship between The impact of
country risk and attractiveness of Foreign direct investments to Algeria. Their Empirical study used data from
‘ICRG’ concerning Algeria between 1987 to 2005. The ordinary Least Square (OLS) method showed that the
Adjusted R Square was 0.74٪ and R about 0.86٪.The results was quite significant .When the risk was at the
Medium level, the attraction of FDI raised to 1252.86 and whenever the risk was very high that would lead to a
greater decrease in FDI.
The causal link between Gross Domestic Product(GDP)and FDI was surprising . According to (Basu, Parantap,
ChandanaChakraborty, and Derrick Reagle,2007) study ,their co integrating vectors reveal a bidirectional
causality between GDP and FDI for more open economies. But (Haitao Sun,2011) found that GDP has a positive
effect on FDI in a short period besides, (Chowdhury, Abdur,2011), results show that GDP causes FDI in the
case of Chile and not vice versa based on the Toda-Yamamoto test for causality, to time-series data covering the
period 1969-2000.FDI has increased since the 1980s and as it contributes towards economic growth, many
countries have tried to offer special tax incentives and subsidies to attract foreign capital .TheOecd which defines
FDI as investment by a resident entity in one Home economy Country that reflects the objective of obtaining a
lasting interest in an enterprise resident in another host country. The lasting interest leads to a long-term
relationship between the investor and the enterprise beside a significant degree of influence by the direct investor
on the management of the enterprise. The ownership of at least 10% of the voting power.
3. Analysing Investment Climate and FDI Trends in Algeria
Algeria has made a great progress to reach a market economy. Everything started with the application of the law
90/10 which allowed Central Bank the authority to formulate and implement monetary and foreign-exchange
9.27
25.9
31.7
20.5
2929.8
18.7
5.74.95
2.6
0.3
4.2
1.4
2.58
3.56
1.64
2.53
3.56
4.46 5.7
3.9
4.52
8.89
0
5
10
15
20
25
30
35
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Inflation
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policies. The law allowed full foreign ownership of new investment projects, encouraged unrestricted joint
ventures between foreign companies and Algerian private concerns too. The government introduced a major
liberalization of external trade and devaluated the dinar value to 100 % between 1990 and 1991.
Although, the positive macroeconomic outlook, there are still vulnerabilities especially the great dependence on
hydrocarbon revenue, risks posed by rising inflation which climbed to 8.9% in 2012. No Doubt that, Algeria
with its hydrocarbon wealth, foreign exchange reserves which reached 193.4 billion dollars at the end of
December 2012 against 181.5 billion dollars in December 2011, expanding infrastructure needs, growing
consumer product demand, is really attracting interest from foreign investors and companies around the world.
Algeria has made a great performance in its macroeconomic results where its real GDP Grew at 3.3% in 2010
and decreased to 3.1 in 2012 due to the oil sector and in a total absence a diversification and a higher
unemployment which reached 8.9% in2012.
Table 1: Algeria macroeconomic indicators: 2009-2012
2009 2010 2011 2012
Nominal GDP 138.0 160.8 190.7 206.5
Real GDP Growth (%) 2.4 3.3 2.5 3.1
Oil GDP Growth (%) -6.0 -2.6 -2.1 -0.7
Fiscal Balance (%
GDP)
-6.4 -2.4 -3.6 -1.0
Reserves (US $ B) 148.9 162.2 181.5 193.4
Population (M) 34.9 35.5 36.0 36.5
Unemployment
(Labourforece%)
10.4 11.1 9.9 8.9
Source : IMF , Staff Country report 2011.Report 12/20,P9.
The restrictive foreign investment rules enacted in 2009 and 2010, which imposed a requirement of at least 51/49
% Algerian ownership of foreign investments, have created a sort of threat and uncertainty to foreign Investors.
The private sector remained weak with 1.07 % and incapable to contribute in the local economy where the
public sector is dominant with almost 98.81%.
Table2:Development of FDI by legal sectors in Algeria 2002 -2011.
Legal
sectors
Nb of Project % Employment
Private 47028 98.81% 656817
public 509 1.07 % 80934
Mixed 56 0.12 % 17419
Total 47593 100 % 755170
Source :Andi .From: http://www.andi.dz/index.php/ar/secteurs
Algeria has also expanded more than 286 USA billion in infrastructure development, making the local market
sufficiently profitable for firms to explore opportunity especially in the different sectors such as energy, Trade,
water, health, telecommunications and transportation. The 2012 Finance Law included measures to ease tax and
customs procedures for companies. The political environment was stable, but not successfully strong to
attracting FDI flowsduring this period. The world economic and financial indicators in 2012 revealed that
Algeria rank remained Under Performers and suggested an economy diversification toavoid economic crisis.
Table3:International Rankings and indicators of Algeria in 2012
Measure Year Index/Ranking
Corruption Index (CPI) 2012 105 (out of 176)
Heritage Economic Freedom 2012 140 (out of 183)
World Bank Doing Business 2012 152 (out of 185)
Global Peace Index (GPI) 2012 118 (out of 156)
Source : According to : Corruption perception index 2012report - Heritage Economic Freedom 2012 report-
Doing Business & (GPI) 2012 reports.
4.Methodology and data Issues
In this paper the sample data covers annual online database published by Unctad and the central bank reports of
Algeria covering 23 years from 1990 to 2012. Data sources include FDI inflows, (GDP) and the inflation rate
besides the foreign exchange reserves. The methodology part consisted of four independent variables cited above
and FDI as the unique dependent variable. The basic model is algebraically expressed as follows:
j 0 1 1 2 2 j 3 3 j jY x x x= β + β + β + β + ε
(1)
Where β0 is called the intercept and the (ß 1, ß 2, ß 3, ß4) are called the coefficients however jε is the
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estimated errors. The multiple linear regression will be as fellow:
FDI = ß 0 + ß 1 Risk + ß 2 Inf + ß 3 Fxex + ß 4 GDP + jε (2)
Where,
FDI = Foreign direct investments
Risk = Country risk
Inf= Inflation
GDP = Gross domestic product
FxRe = Foreign exchange reserves
The expected relationship inflation, gross domestic product and foreign exchange reserves effect on the
attractiveness of foreign direct investments in Algeria using multiple regression techniques for the period (1990
to 2012).
Table 4: Algeria data listed by (ICRG) ,unctad and central bank of Algeria
DATE FDI Risks Inflation F.X.Reseves GDP
1990 40 59,4 16,65 980,67 55,63
1991 80 52,48 25,89 1765,39 62,05
1992 30 53,07 31,67 1725,72 45,72
1993 90 53,5 20,54 1743,13 45,72
1994 150 53,36 29,05 2959,13 49,95
1995 210 60,8 29,78 2295,63 49,95
1996 270 58,86 18,68 4515,99 42,54
1997 260 58,41 5,73 8310,38 41,76
1998 607 52,48 4,95 7120,66 48,18
1999 292 56 2,65 4793,85 48,18
2000 280 58,09 0,34 12278,49 48,19
2001 1108 61,8 4,23 18327,02 48,64
2002 1065 66 1,42 23503,11 54,79
2003 634 70,88 4,27 33415,6 55,18
2004 882 77,19 3,96 43549,82 85,01
2005 1081 77,92 1,38 56582,37 68,02
2006 1795 78,06 2,31 78207,74 117,16
2007 1662 77,25 3,67 110626,35 135,8
2008 2594 73,69 4,86 143543,92 170,98
2009 2746 71,9 5,73 149346,93 138,11
2010 2264 71,21 3,91 162915,15 161,67
2011 2571 71,25 4,52 183122,4 198,54
2012 1484 71,21 8,89 191597,06 205,8
Source:Theworldbank ,statistical appendix: from http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG.
9/06/2013.
4.1. Problem Statement:
This paper tries to understand what are the main variables which matter most in the attractiveness of FDI
inflows in Algeria although, the negativity being generated about Algeria investment climate.
4.2. Originality Of Study:
There is no study which has really explored as much as variables used in this study such as the foreign
exchange reserves, inflation and the GDP and the Country risk components to show and measure the link
between these variables and the Algerian attractiveness for foreign direct investments inflow.
4.3. Objective Of Study:
The objective of the study is to examine the impact of inflation and the so called foreign exchange reserves
determine other factors which matter most in investment decisions.
4.4Estimation procedure: In this study we are going to use ordinary least squares equation technique to
estimate the causality. Using stepwise method and SPSS software package used for statistical analysis.
4.5 Hypothesis:
H01 = There is no significant relationship between country risk(Risk) and FDI in Algeria.
H02 = there is no relationship exist between inflation(Inf) and FDI in Algeria.
H03 = there is no relationship exist between foreign exchange reserves (FxRe) and FDI in Algeria.
H04 = there is no relationship exist between GDP and FDI in Algeria.
4.6 Descriptive Statistics
In descriptive statistics, total numbers of observations of each variable are 23. For GDP, mean value is 85.98,
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and standard deviation is 910.54 . For foreign exchange reserves (Fxre), the mean value is 54053.32, and
standard deviation is 66840.76.For inflation variable (Inf) the mean value is 10.22, and standard deviation is
10.35.However ,For Country risk ( Risk) the mean value is 64.55, and standard deviation is 9.29. The result of
descriptive statistics is seen in Table5.
Table 5:Descriptive statistics
Mean Std. Deviation N
FDI 965,0000 910,54384 23
Risk 64,5570 9,29126 23
Infl 10,2209 10,35632 23
FxRe 54053,3265 66840,76068 23
GDP 85,9813 54,46082 23
Source: Developed by the authors according to the spss outputs.
4.7 Correlation
The Correlation analysis shows a relationship between dependent and independent variables. Risk and FDI is -
75% correlated. There are 90% correlations between FDI and foreign exchange reserves (FxRe). 86. %
correlation exists between FDI and GDP and all the variables have 100 % correlation among themselves. The
results are shown in table 6.
Table6:Correlation results
FDI Risk Inf FxRe GDP
Pearson
Correlati
on
FDI 1,000 ,750 -,550 ,904 ,860
Risk ,750 1,000 -,608 ,700 ,657
Infl -,550 -,608 1,000 -,420 -,342
Reser ,904 ,700 -,420 1,000 ,980
GDP ,860 ,657 -,342 ,980 1,000
Source: Developed by the authors according to the spss outputs.
4.8 Model Summary and ANOVA
Regression statistics of proposed mode is presented in table 4 entitled as the model summery and Anova. The
results suggest the overall model is significant at 5% level of significance because its p value is 0.000. The value
of R is 0.92 which indicates the percentage variation in FDI due to the different variables entered in this model.
The Risk and GDP variables are excluded and were not statistically significant. R square reached 0.85, which is
quite high and shows the proportion variance in the dependent variable that was explained by the variation in
dependent variable. The Adjusted R square result shows that 83% variation in FDI is explained by inflation (Inf)
and Foreign exchange reserves (FxRe) and rest of 17% variation in this model is unexplained. The result are
shown in table 7 .
Table 7:Model summery and ANOVA
R 0.92
R Square 0.85
Adjusted R Square 0.83
Std .Erro Of the Estimate 366.15
ANOVA SIG. 0.000
Source: Developed by the authors according to the spss outputs.
4.9 Regression equation
According to table 5 entitled the Coefficients which show that for each unit increase in foreign exchange
reserves (FxRe) leads the increase of FDI by 0.01 units. ß0= 548.54 which shows the average value of the
dependent variable FDI when there is no change in foreign exchange reserve (FxRe) and Inflation(Inf). We
noticed also that there is adverse effect between Inflation (Inf) and FDI since any increase in the inflation by
one unit leads to a decrease in foreign direct investments by (-18.15)units .All findings are in line with the
economic logic. However, the illogical variables were the GDP and the Country risk which were excluded from
the stepwise procedure.
Table 8:Coefficients
Model B Std. Error t Sig.
(Constant) 548,531 151,162 3,629 0,002
FxRe 0,011 ,001 8,652 0,000
Inf -18,153 8,308 -2,185 0,041
a. Dependent Variable: FDI
The regression equation of this analysis is as follow:
FDI = 548.53 + 0.01 FxRe -18.15 Inf (3)
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5. Findings and Discussions
Despite institutional and economic reform in Algeria during 1990 to 2012, the foreign direct investments
inflows remained quite weak and insufficient. In this paper, we concluded that attractiveness of foreign direct
investments (FDI) in Algeria depends on the control of inflation .Besides; the high level of foreign exchange
reserves level helps and gives a great confidence to foreign investors to invest in Algeria and strength the
attractiveness of FDI flows. To sum up, a positive relationship is found between foreign exchange reserves and
foreign direct investments and Algeria stayed dependent on the hydrocarbon sector.
6. Conclusion
A great number of earlier studies discussed the impact of inflation, GDP or other independent variables such as
foreign exchange reserves on Foreign direct investment(FDI) attraction and illustrated the important role of
multinational companies in increasing competitiveness .This let us focus on their decision of where ,when and
for which purpose to invest abroad especially in uncertain environments like the Algerian one. We know that
Algeria’s foreign exchange reserves hit nearly $192 billion in 2012 but Algeria is still looking for the best
equation in order to attract enough FDI since it is rich in natural resources and has really scored high record
levels of FDI in the recent years, reaching 2264 million USD in 2010 and 1484 in 2012. Nevertheless, the long
civil war between1992 to 2000, military influence, corruption, and cronyism remain prevalent up today.
According to transparency international word corruption Index, which is closely watched by investors,
economists, and civil society campaigners, Algeria is ranked 112 in 2012 of 174 countries. The empirical result
indicates that there are significant between Foreign exchange reserves and FDI attraction. With further analysis,
we know that Inflation has a negative relation with FDI towards Algeria.
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