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 country’s competitiveness, and expand growth within the private sector so that everyone in Jordan has the opportunity to contribute to a brighter future.
Measuring the Impact of Financial Institutions Development on Foreign Direct ...ijtsrd
This study examines the impact of financial institution development on the absorption of foreign direct investment in Africa. With a sample study including 32 African economies for the period 1980 2018, the paper apply the PMG, MG and DFE estimators, an unprecedent accomplishment of this research is that it provides a deep understanding of the influence of financial development on foreign direct investment both in the short and long term in five regions of the continent. The empirical result suggest that positive and significant impact are found in the long term in regions while in the short run no significant impact is found. Magakam Tchamekwen Alida | Zhao Xi Cang "Measuring the Impact of Financial Institutions Development on Foreign Direct Investment Inflow in Africa" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-1 , December 2020, URL: https://www.ijtsrd.com/papers/ijtsrd37992.pdf Paper URL : https://www.ijtsrd.com/economics/financial-economics/37992/measuring-the-impact-of-financial-institutions-development-on-foreign-direct-investment-inflow-in-africa/magakam-tchamekwen-alida
Foreign Aid and Economic Growth in the West African States: A Panel Frameworkinventionjournals
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
To what extent foreign direct investment (fdi) affect in economic development...Alexander Decker
This document discusses research on the impact of foreign direct investment (FDI) on Pakistan's economic growth from 1975 to 2010. It finds that FDI has had a positive effect on economic growth in both the short and long run. The document reviews previous literature on the relationship between FDI and economic growth. It then describes the methodology used in the study, which analyzes the impact of FDI, reserves, inflation, and gross domestic savings on GDP. The results show that all variables are positively correlated with FDI and statistically significant. The conclusion is that FDI contributes to Pakistan's economic growth.
The document discusses a study investigating the impact of foreign direct investment (FDI) on economic growth in Pakistan from 1990-2006. The study uses a production function model including FDI, trade, domestic capital, labor, and human capital as independent variables affecting economic growth. The expected results are a statistically significant positive relationship between real per capita GDP and FDI in Pakistan. Policy recommendations could then be made regarding FDI in Pakistan based on the results.
Relative Potency of Internal and External Sources of Financing Nigerian Econo...iosrjce
The study is aimed at determining the relative potency of internal and external sources of financing
economic growth in Nigeria using time series data from 1983 to 2012. Ordinary least square regression method,
unit root test, Johansen cointegration test and error correction model were used for the purpose of analyses.
Gross national saving, internal debt, grants and foreign investment are stationary at level, gross domestic
investment at first difference and gross domestic product at second difference. From the over parameterized
ECM, none of the internal and external financing options is significant in explaining economic growth. In the
group of internal options, gross national saving, gross domestic investment and internal debt contribute
positively to growth in the short and long run, the only exception being gross national saving in the short run. In
the group of external options however, only grant contribute positively to growth in the long and short run.
Foreign direct investment appears like a wolf in sheep’s clothing given its long run negative impact. Finally,
growth is a decreasing and an increasing function of external debt in the short and long run respectively. It is
noteworthy that a very high constant coefficient implies that there are many factors that actually determine
Nigerian gross domestic product outside the model. While the variables of interest are theoretically expected to
play significant roles, they fail empirically. A comparison of the two modes shows that internal factors prove to
be more reliable in accelerating Nigerian economic growth.
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
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.
Understanding the Determinants and Impacts of FDI Inflows - An Indian Perspec...Jitender Barna
This document summarizes a student's research on understanding the determinants and impacts of foreign direct investment (FDI) inflows into India. The student examines various economic theories on what drives FDI and reviews previous empirical studies. The methodology section outlines how the student uses a positivist philosophy and deductive approach, collecting secondary data to conduct regression analysis and correlation tests. The findings section indicates that GDP, imports, exports, and exchange rates are significant determinants of FDI in India. While FDI is found to positively impact GDP, capital formation, imports and savings, the magnitude of impact is less than that of domestic capital formation. In conclusion, the student finds that India has not yet received sufficient FDI to significantly impact the
Measuring the Impact of Financial Institutions Development on Foreign Direct ...ijtsrd
This study examines the impact of financial institution development on the absorption of foreign direct investment in Africa. With a sample study including 32 African economies for the period 1980 2018, the paper apply the PMG, MG and DFE estimators, an unprecedent accomplishment of this research is that it provides a deep understanding of the influence of financial development on foreign direct investment both in the short and long term in five regions of the continent. The empirical result suggest that positive and significant impact are found in the long term in regions while in the short run no significant impact is found. Magakam Tchamekwen Alida | Zhao Xi Cang "Measuring the Impact of Financial Institutions Development on Foreign Direct Investment Inflow in Africa" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-1 , December 2020, URL: https://www.ijtsrd.com/papers/ijtsrd37992.pdf Paper URL : https://www.ijtsrd.com/economics/financial-economics/37992/measuring-the-impact-of-financial-institutions-development-on-foreign-direct-investment-inflow-in-africa/magakam-tchamekwen-alida
Foreign Aid and Economic Growth in the West African States: A Panel Frameworkinventionjournals
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
To what extent foreign direct investment (fdi) affect in economic development...Alexander Decker
This document discusses research on the impact of foreign direct investment (FDI) on Pakistan's economic growth from 1975 to 2010. It finds that FDI has had a positive effect on economic growth in both the short and long run. The document reviews previous literature on the relationship between FDI and economic growth. It then describes the methodology used in the study, which analyzes the impact of FDI, reserves, inflation, and gross domestic savings on GDP. The results show that all variables are positively correlated with FDI and statistically significant. The conclusion is that FDI contributes to Pakistan's economic growth.
The document discusses a study investigating the impact of foreign direct investment (FDI) on economic growth in Pakistan from 1990-2006. The study uses a production function model including FDI, trade, domestic capital, labor, and human capital as independent variables affecting economic growth. The expected results are a statistically significant positive relationship between real per capita GDP and FDI in Pakistan. Policy recommendations could then be made regarding FDI in Pakistan based on the results.
Relative Potency of Internal and External Sources of Financing Nigerian Econo...iosrjce
The study is aimed at determining the relative potency of internal and external sources of financing
economic growth in Nigeria using time series data from 1983 to 2012. Ordinary least square regression method,
unit root test, Johansen cointegration test and error correction model were used for the purpose of analyses.
Gross national saving, internal debt, grants and foreign investment are stationary at level, gross domestic
investment at first difference and gross domestic product at second difference. From the over parameterized
ECM, none of the internal and external financing options is significant in explaining economic growth. In the
group of internal options, gross national saving, gross domestic investment and internal debt contribute
positively to growth in the short and long run, the only exception being gross national saving in the short run. In
the group of external options however, only grant contribute positively to growth in the long and short run.
Foreign direct investment appears like a wolf in sheep’s clothing given its long run negative impact. Finally,
growth is a decreasing and an increasing function of external debt in the short and long run respectively. It is
noteworthy that a very high constant coefficient implies that there are many factors that actually determine
Nigerian gross domestic product outside the model. While the variables of interest are theoretically expected to
play significant roles, they fail empirically. A comparison of the two modes shows that internal factors prove to
be more reliable in accelerating Nigerian economic growth.
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
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.
Understanding the Determinants and Impacts of FDI Inflows - An Indian Perspec...Jitender Barna
This document summarizes a student's research on understanding the determinants and impacts of foreign direct investment (FDI) inflows into India. The student examines various economic theories on what drives FDI and reviews previous empirical studies. The methodology section outlines how the student uses a positivist philosophy and deductive approach, collecting secondary data to conduct regression analysis and correlation tests. The findings section indicates that GDP, imports, exports, and exchange rates are significant determinants of FDI in India. While FDI is found to positively impact GDP, capital formation, imports and savings, the magnitude of impact is less than that of domestic capital formation. In conclusion, the student finds that India has not yet received sufficient FDI to significantly impact the
The Determinants of Foreign Direct Investment: A study based on country-level...Yi Zhang
This document is a master's thesis that examines the determinants of foreign direct investment (FDI) using country-level panel data. It begins with an introduction that notes the rapid growth of FDI in recent decades and outlines the research questions. A literature review then discusses previous research on potential factors that influence FDI. The paper will use regression analysis to investigate the effects of various economic, institutional and policy variables on FDI inflows. It will also include regional dummy variables to analyze differences in FDI patterns across geographic regions. The results aim to identify which factors cause variation in FDI levels among countries and how these factors impact FDI.
This document is a research proposal submitted by a group of students at University Malaysia Sarawak investigating the determinants of foreign direct investment in Malaysia. It provides background on FDI and its importance to the Malaysian economy. The study aims to determine what factors influence FDI inflows, with a focus on exchange rates, market size, and infrastructure. The methodology section outlines the hypotheses, econometric model, and statistical tests that will be used, including OLS regression, tests for serial correlation and heteroskedasticity, and Granger causality.
FDI as A Source of External Finance to Developing Countries: A Special Refere...iosrjce
In this era of increasingly globalized world economy, FDI is particularly a significant driving force
behind the interdependence of national economies and is considered as the main source of external finance. The
considerable decline in official development assistance (ODA) and commercial bank lending to developing
countries, which are considered as the main sources of meeting the external financing needs of developing
countries, have seen a greater reliance on private capital especially foreign direct investment as a source of
development finance. This is because of the fact that FDI not only remains much less volatile than portfolio and
other investments but it has also proved to be resilient enough during East Asian crisis of 1997-98 and the
Mexican crisis of 1994-95. In view of this growing significance of foreign direct investment, this paper aims to
study the role of FDI in external financing to developing countries, particularly India and China and the
benefits of combining FDI with other private sources of external finance. The paper concludes that FDI is the
major source of external finance for developing economies not only in absolute terms but also relative to other
sources of private capital flows, contributing on an average more than half of net private and official flows
during the period under review. The findings also presented a completely different picture with regard to the
structure of external financing for India and China. For China, FDI is the major external source of finance
followed by debt. On the other hand, for India Workers’ Remittances is the major source of external finance
followed by debt. The paper further concludes that China and India are the first and third most developing
country destinations for investment flows respectively and both are vying with each other to attract more and
more FDI inflows.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, 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.
Analysis of foreign investment and identified macroeconomic measures in nigeriaAlexander Decker
This document analyzes the relationship between foreign investment and macroeconomic variables in Nigeria from 1980-2010. It finds that GDP, exchange rates, and money supply have a direct positive impact on foreign investment, while interest rates and inflation have a negative impact. Interest rates and inflation are also found to "Granger cause" foreign investment, indicating they are influential factors. The study recommends that Nigeria implement excellent macroeconomic policies and infrastructure development to enhance investment and reduce poverty.
Determinants of Foreign Direct Investment in Nigeria (1977-2008) OLADAPO TOLU...dapoace
This document contains a literature review on foreign direct investment (FDI). It begins by defining FDI and discussing how FDI flows are compiled. It then reviews several theories on the determinants and impacts of FDI. Market size, trade openness, macroeconomic stability, and infrastructure development are identified as important determinants of FDI inflows. The literature suggests that while FDI can benefit economic growth, developing effective policies is important to maximize benefits and minimize risks for host countries like Nigeria.
Factors Affecting the Investment Climate and the Role of Investments in Econo...ijtsrd
This article analyzes the factors affecting the investment climate on the example of the Uzbekistan’s 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 Uzbekistan’s 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 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.
The document provides background information on foreign direct investment (FDI) and discusses the importance of FDI to developing economies like Nigeria. It notes that Nigeria suffers from capital scarcity due to low domestic savings. While FDI can help boost capital levels and economic growth, insecurity poses challenges to Nigeria's investment climate and has led to declining FDI. The study aims to examine the impact of insecurity on FDI in Nigeria, particularly in the manufacturing and communication sectors, in order to improve economic growth and development. It outlines the statement of the problem, research questions, objectives, hypotheses and significance of the study.
Impact of Foreign Debt on Economic Growth in Zimbabweiosrjce
The study investigates the impact of foreign debt on economic growth in Zimbabwe. Time series data
covering the period 1980 -2013 is analysed using ordinary least squares regression. Labour force, capital
investment, and trade openness are used as control variables. The results show that external debt and trade
openness impact negatively on economic growth in Zimbabwe while capital investment and labour force growth
has a positive effect. The study recommends that the country should not heavily rely on foreign borrowing to
finance economic growth but should rather create a conducive environment for alternative sources of foreign
funds such as project finance and foreign direct investment. It is further recommended that the country should
curb excessive imports of consumables and encourage value-added exports by local manufacturers.
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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.
Effect of foreign direct investment and stock market development on economic ...Alexander Decker
This document analyzes the effect of foreign direct investment and stock market development on economic
growth in Nigeria from 1980 to 2009. It finds that both foreign direct investment and lagged stock market
development have a small but statistically significant positive effect on economic growth. The trends show
that foreign direct investment and stock market development experience cyclical movements. Lagged
exchange rate appreciation also enhances economic growth in Nigeria. The study aims to examine trends in
foreign investment and stock markets, and establish their relationship to economic growth, in order to guide
policymakers.
11.effect of foreign direct investment and stock market development on econom...Alexander Decker
This study investigates the impact of foreign direct investment (FDI) and stock market development on economic growth in Nigeria from 1980 to 2009. It employs techniques such as unit root testing, cointegration, and error correction modeling. The results show that both lagged FDI and lagged stock market development, as measured by market capitalization as a percentage of GDP, have a small but statistically significant positive effect on economic growth. Trend results indicate that FDI and stock market development experience cyclical movements. Lagged exchange rate is also found to have a positive impact on growth, suggesting that exchange rate appreciation enhances growth in Nigeria. The findings suggest more investment is needed in these markets to boost economic growth.
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.
Research on relationship between china and ghana trade and foreign direct inv...Alexander Decker
This document discusses research on the relationship between China and Ghana in terms of trade and foreign direct investment. It finds that China is the second largest source of trade and foreign direct investment for Ghana. The document provides background on foreign direct investment in Africa, noting that while countries have worked to improve their investment climates, the expected surge in FDI has not occurred due to negative perceptions of risks. Determinants of FDI in Africa discussed include natural resources, market size, labor costs, trade openness, taxes, incentives, political stability, and infrastructure.
External Financing and Economic Growth in Nigeria 1986 2017ijtsrd
External financing has become a veritable resort to remedying the common problems of low productivity, low productivity, low savings and high dependent on consumption from exports in most less developed economies. The use of external finance is believed to have the capacity to close wide gap between domestic savings and investment and provide the complementary funds to facilitate economic activities necessary for growth in Nigeria. This study aimed to investigate the effect of external financing on economic growth in Nigeria between 1986 and 2017. External financing was captured using five variables of external debt stock EDS , foreign direct investment FDI , official development assistance ODA , remittance RMT and foreign portfolio investment FPI , as the independent variables, regressed on economic growth represented by annual growth rate of gross domestic product GDPR as the dependent variable. Data for these variables were obtained from World Development Indicator, and analyzed based on the Autoregressive Distributive Lag ARDL approach. The findings revealed that, in the long run, EDS and FDI had a negative and a positive, significant effects, respectively, while others had no effect on growth in the short run, all the external financing variables EDS, FDI, FPI, ODA, and RMT had no significant effect on economic growth in Nigeria. The study averred that FDI is a veritable source of financing that can bring about economic sustainability to Nigeria. The study recommended, among others, that government should deploy external debts for regenerative projects that will eventually liquidate themselves in the long run. Ekwunife, Ifeanyi Jude | Dr. J. J. E. Ikeora "External Financing and Economic Growth in Nigeria: 1986-2017" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-6 , October 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29388.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/29388/external-financing-and-economic-growth-in-nigeria-1986-2017/ekwunife-ifeanyi-jude
- The document analyzes the relationship between foreign direct investment (FDI) inflows and gross domestic product (GDP) in India from 1990 to 2012.
- It finds a strong positive correlation (r=0.859) between FDI inflows and GDP over the period studied, indicating FDI causes growth of India's GDP to a large extent.
- The study also aims to determine the impact of FDI on per capita GDP in India and finds a strong positive correlation, supporting the hypothesis that there is a relationship between FDI inflows and increases in per capita GDP.
- In conclusion, the study recommends improving India's investment climate to strengthen its position in the globalized economy by enhancing competitiveness
This document summarizes a thesis that examines the impact of official development assistance (ODA) on foreign direct investment (FDI) in Vietnam using provincial data from 1998 to 2012. The author conducts a literature review that finds mixed results on the relationship between ODA and FDI. Some studies find a positive relationship, others a negative relationship, and some no relationship. The author develops a theoretical model based on neoclassical growth theory to explain the potential relationship. An empirical model is then specified to test the impact of ODA on FDI using panel data and controlling for factors like GDP, openness, and human capital. The author hypothesizes that ODA will have a positive significant effect on FDI inflows in
USING STRUCTURAL EQUATION MODELING ON FOREIGN DIRECT INVESTMENT OF INDIAN ECO...indexPub
Purpose: Foreign direct investment (FDI) altogether influences the beneficiary country's financial development, making it more stable, high-quality, and healthy, according to this empirical study based on the present stage of economic development. Thus, every country encountering financial globalization is attempting to lay out a serious business climate to increment worldwide speculation. Design/Methodology/Approach: the main objective of this study is based on Institutional quality or Evidence and I selected 5 factors Institutional Metrics like Voice and Accountability, Civil liberties, Women in parliament, Corruption perceptions, Political rights from DPIIT website (Secondary Data) for the period 2018-2023. Static analysis methods such as the Unit Root Test, the ARDL Approach, and SEM are being used. Originality/Value: The experts in this study used OLS (Least Squares) regression: Foreign direct investment (FDI) streams were the focal point of the exploration. The impact of institutional qualities on unfamiliar direct speculation streams has been explored utilizing the customary least square methodology. Findings: Institutional metrics of government efficacy and corruption have shown a shortrun link with foreign direct investment (FDI) flows, according to the research, which used the ARDL model to find that these indicators had positive coefficient values. As far as institutional markers like law and order, administrative quality, and voice and responsibility, the review found that political stability had a long-term association with foreign direct investment flows (7.4578 > 4.16), placing it above the upper peasant table.
The Determinants of Foreign Direct Investment: A study based on country-level...Yi Zhang
This document is a master's thesis that examines the determinants of foreign direct investment (FDI) using country-level panel data. It begins with an introduction that notes the rapid growth of FDI in recent decades and outlines the research questions. A literature review then discusses previous research on potential factors that influence FDI. The paper will use regression analysis to investigate the effects of various economic, institutional and policy variables on FDI inflows. It will also include regional dummy variables to analyze differences in FDI patterns across geographic regions. The results aim to identify which factors cause variation in FDI levels among countries and how these factors impact FDI.
This document is a research proposal submitted by a group of students at University Malaysia Sarawak investigating the determinants of foreign direct investment in Malaysia. It provides background on FDI and its importance to the Malaysian economy. The study aims to determine what factors influence FDI inflows, with a focus on exchange rates, market size, and infrastructure. The methodology section outlines the hypotheses, econometric model, and statistical tests that will be used, including OLS regression, tests for serial correlation and heteroskedasticity, and Granger causality.
FDI as A Source of External Finance to Developing Countries: A Special Refere...iosrjce
In this era of increasingly globalized world economy, FDI is particularly a significant driving force
behind the interdependence of national economies and is considered as the main source of external finance. The
considerable decline in official development assistance (ODA) and commercial bank lending to developing
countries, which are considered as the main sources of meeting the external financing needs of developing
countries, have seen a greater reliance on private capital especially foreign direct investment as a source of
development finance. This is because of the fact that FDI not only remains much less volatile than portfolio and
other investments but it has also proved to be resilient enough during East Asian crisis of 1997-98 and the
Mexican crisis of 1994-95. In view of this growing significance of foreign direct investment, this paper aims to
study the role of FDI in external financing to developing countries, particularly India and China and the
benefits of combining FDI with other private sources of external finance. The paper concludes that FDI is the
major source of external finance for developing economies not only in absolute terms but also relative to other
sources of private capital flows, contributing on an average more than half of net private and official flows
during the period under review. The findings also presented a completely different picture with regard to the
structure of external financing for India and China. For China, FDI is the major external source of finance
followed by debt. On the other hand, for India Workers’ Remittances is the major source of external finance
followed by debt. The paper further concludes that China and India are the first and third most developing
country destinations for investment flows respectively and both are vying with each other to attract more and
more FDI inflows.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, 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.
Analysis of foreign investment and identified macroeconomic measures in nigeriaAlexander Decker
This document analyzes the relationship between foreign investment and macroeconomic variables in Nigeria from 1980-2010. It finds that GDP, exchange rates, and money supply have a direct positive impact on foreign investment, while interest rates and inflation have a negative impact. Interest rates and inflation are also found to "Granger cause" foreign investment, indicating they are influential factors. The study recommends that Nigeria implement excellent macroeconomic policies and infrastructure development to enhance investment and reduce poverty.
Determinants of Foreign Direct Investment in Nigeria (1977-2008) OLADAPO TOLU...dapoace
This document contains a literature review on foreign direct investment (FDI). It begins by defining FDI and discussing how FDI flows are compiled. It then reviews several theories on the determinants and impacts of FDI. Market size, trade openness, macroeconomic stability, and infrastructure development are identified as important determinants of FDI inflows. The literature suggests that while FDI can benefit economic growth, developing effective policies is important to maximize benefits and minimize risks for host countries like Nigeria.
Factors Affecting the Investment Climate and the Role of Investments in Econo...ijtsrd
This article analyzes the factors affecting the investment climate on the example of the Uzbekistan’s 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 Uzbekistan’s 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 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.
The document provides background information on foreign direct investment (FDI) and discusses the importance of FDI to developing economies like Nigeria. It notes that Nigeria suffers from capital scarcity due to low domestic savings. While FDI can help boost capital levels and economic growth, insecurity poses challenges to Nigeria's investment climate and has led to declining FDI. The study aims to examine the impact of insecurity on FDI in Nigeria, particularly in the manufacturing and communication sectors, in order to improve economic growth and development. It outlines the statement of the problem, research questions, objectives, hypotheses and significance of the study.
Impact of Foreign Debt on Economic Growth in Zimbabweiosrjce
The study investigates the impact of foreign debt on economic growth in Zimbabwe. Time series data
covering the period 1980 -2013 is analysed using ordinary least squares regression. Labour force, capital
investment, and trade openness are used as control variables. The results show that external debt and trade
openness impact negatively on economic growth in Zimbabwe while capital investment and labour force growth
has a positive effect. The study recommends that the country should not heavily rely on foreign borrowing to
finance economic growth but should rather create a conducive environment for alternative sources of foreign
funds such as project finance and foreign direct investment. It is further recommended that the country should
curb excessive imports of consumables and encourage value-added exports by local manufacturers.
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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.
Effect of foreign direct investment and stock market development on economic ...Alexander Decker
This document analyzes the effect of foreign direct investment and stock market development on economic
growth in Nigeria from 1980 to 2009. It finds that both foreign direct investment and lagged stock market
development have a small but statistically significant positive effect on economic growth. The trends show
that foreign direct investment and stock market development experience cyclical movements. Lagged
exchange rate appreciation also enhances economic growth in Nigeria. The study aims to examine trends in
foreign investment and stock markets, and establish their relationship to economic growth, in order to guide
policymakers.
11.effect of foreign direct investment and stock market development on econom...Alexander Decker
This study investigates the impact of foreign direct investment (FDI) and stock market development on economic growth in Nigeria from 1980 to 2009. It employs techniques such as unit root testing, cointegration, and error correction modeling. The results show that both lagged FDI and lagged stock market development, as measured by market capitalization as a percentage of GDP, have a small but statistically significant positive effect on economic growth. Trend results indicate that FDI and stock market development experience cyclical movements. Lagged exchange rate is also found to have a positive impact on growth, suggesting that exchange rate appreciation enhances growth in Nigeria. The findings suggest more investment is needed in these markets to boost economic growth.
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.
Research on relationship between china and ghana trade and foreign direct inv...Alexander Decker
This document discusses research on the relationship between China and Ghana in terms of trade and foreign direct investment. It finds that China is the second largest source of trade and foreign direct investment for Ghana. The document provides background on foreign direct investment in Africa, noting that while countries have worked to improve their investment climates, the expected surge in FDI has not occurred due to negative perceptions of risks. Determinants of FDI in Africa discussed include natural resources, market size, labor costs, trade openness, taxes, incentives, political stability, and infrastructure.
External Financing and Economic Growth in Nigeria 1986 2017ijtsrd
External financing has become a veritable resort to remedying the common problems of low productivity, low productivity, low savings and high dependent on consumption from exports in most less developed economies. The use of external finance is believed to have the capacity to close wide gap between domestic savings and investment and provide the complementary funds to facilitate economic activities necessary for growth in Nigeria. This study aimed to investigate the effect of external financing on economic growth in Nigeria between 1986 and 2017. External financing was captured using five variables of external debt stock EDS , foreign direct investment FDI , official development assistance ODA , remittance RMT and foreign portfolio investment FPI , as the independent variables, regressed on economic growth represented by annual growth rate of gross domestic product GDPR as the dependent variable. Data for these variables were obtained from World Development Indicator, and analyzed based on the Autoregressive Distributive Lag ARDL approach. The findings revealed that, in the long run, EDS and FDI had a negative and a positive, significant effects, respectively, while others had no effect on growth in the short run, all the external financing variables EDS, FDI, FPI, ODA, and RMT had no significant effect on economic growth in Nigeria. The study averred that FDI is a veritable source of financing that can bring about economic sustainability to Nigeria. The study recommended, among others, that government should deploy external debts for regenerative projects that will eventually liquidate themselves in the long run. Ekwunife, Ifeanyi Jude | Dr. J. J. E. Ikeora "External Financing and Economic Growth in Nigeria: 1986-2017" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-6 , October 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29388.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/29388/external-financing-and-economic-growth-in-nigeria-1986-2017/ekwunife-ifeanyi-jude
- The document analyzes the relationship between foreign direct investment (FDI) inflows and gross domestic product (GDP) in India from 1990 to 2012.
- It finds a strong positive correlation (r=0.859) between FDI inflows and GDP over the period studied, indicating FDI causes growth of India's GDP to a large extent.
- The study also aims to determine the impact of FDI on per capita GDP in India and finds a strong positive correlation, supporting the hypothesis that there is a relationship between FDI inflows and increases in per capita GDP.
- In conclusion, the study recommends improving India's investment climate to strengthen its position in the globalized economy by enhancing competitiveness
This document summarizes a thesis that examines the impact of official development assistance (ODA) on foreign direct investment (FDI) in Vietnam using provincial data from 1998 to 2012. The author conducts a literature review that finds mixed results on the relationship between ODA and FDI. Some studies find a positive relationship, others a negative relationship, and some no relationship. The author develops a theoretical model based on neoclassical growth theory to explain the potential relationship. An empirical model is then specified to test the impact of ODA on FDI using panel data and controlling for factors like GDP, openness, and human capital. The author hypothesizes that ODA will have a positive significant effect on FDI inflows in
USING STRUCTURAL EQUATION MODELING ON FOREIGN DIRECT INVESTMENT OF INDIAN ECO...indexPub
Purpose: Foreign direct investment (FDI) altogether influences the beneficiary country's financial development, making it more stable, high-quality, and healthy, according to this empirical study based on the present stage of economic development. Thus, every country encountering financial globalization is attempting to lay out a serious business climate to increment worldwide speculation. Design/Methodology/Approach: the main objective of this study is based on Institutional quality or Evidence and I selected 5 factors Institutional Metrics like Voice and Accountability, Civil liberties, Women in parliament, Corruption perceptions, Political rights from DPIIT website (Secondary Data) for the period 2018-2023. Static analysis methods such as the Unit Root Test, the ARDL Approach, and SEM are being used. Originality/Value: The experts in this study used OLS (Least Squares) regression: Foreign direct investment (FDI) streams were the focal point of the exploration. The impact of institutional qualities on unfamiliar direct speculation streams has been explored utilizing the customary least square methodology. Findings: Institutional metrics of government efficacy and corruption have shown a shortrun link with foreign direct investment (FDI) flows, according to the research, which used the ARDL model to find that these indicators had positive coefficient values. As far as institutional markers like law and order, administrative quality, and voice and responsibility, the review found that political stability had a long-term association with foreign direct investment flows (7.4578 > 4.16), placing it above the upper peasant table.
Foreign Direct Investment (FDI) has been seen as an important factor influencing economic growth directly and indirectly in both developed and developing countries. This study assesses the impact of FDI on growth in Ghana since the return to constitutional rule in 1993. The study uses time series data from 1993 to 2016. Using the Autoregressive Distributed Lagged model (ARDL), the study finds a positive impact of FDI on growth both in the short-run and long-run. However, there is a lag period of two. The study equally finds that Gross Saving has a positive impact on growth. On the other hand inflation has a negative effect on growth both in the short and long run. The study also discovered that FDI granger causes growth but GDP does not granger cause FDI. Post-election years with incidence of political uncertainty slow down FDI inflow into Ghana. The study recommends the adoption of stringent fiscal and monetary policies to keep inflation low. It also recommends maintaining and improving the liberal market environment to attract investors, policies to encourage saving, and improving on political transitions to avoid uncertainties for investors.
Foreign capital flows depends on the prevailing monetary forces as supported by capital flows
theory and the mechanism linking these two variables is that contraction of net domestic assets through an
open market sale of bonds will place upward pressure on domestic interest rates. Higher interest rates attract
foreign funds, generating a capital inflow which relieves the pressure on domestic interest rates. Has this
actually happened? It is against this backdrop that the present study investigated the impact of monetary policy
on international capital inflows in Nigeria for a period of 22 years (1994-2015) using time series data. The
autoregressive distributed lag technique revealed that the short-run and long-run significant determinants of
foreign capital inflows are largely from broad money supply, nominal exchange rate, inflation rate and interest
rates spread except inflation rate that is insignificant in the long-run. This outcome upholds theoretical
prediction. Long-run equilibrium relationship was found between the dependent variable and the regressors.
Further examination of the short run dynamics of the model showed that the speed of adjustment coefficients
ECM (-1) to restore equilibrium have a negative sign and statistically significant at 1% level, ensuring that
long-run equilibrium can be attained and about 89% of the short-run deviation from the equilibrium (long-run)
position is corrected annually to maintain the equilibrium. Since the empirical evidence revealed that monetary
aggregates such as broad money supply, nominal exchange rate, inflation rate and interest rates spread
influence foreign capital inflows, it is therefore recommended that government should continue to pursue
expansionary monetary policy and foreign exchange policies that would ensure competitiveness of the
economy in order to attract the much needed foreign capital inflows that would engender economic growth.
- The document analyzes the effect of foreign direct investment (FDI) on economic growth in Cape Verde from 1985 to 2018 using an autoregressive distributed lag (ARDL) model.
- It finds a long-run relationship between FDI, labor force, inflation and GDP growth in Cape Verde. However, it finds that FDI does not "Granger cause" economic growth.
- Factors like openness and domestic investment were not found to have a long-term relationship with GDP in Cape Verde's economy.
Effect of public investment on economic growth in bangladeshAlexander Decker
This document analyzes the effect of public investment on economic growth in Bangladesh through econometric analysis. It summarizes previous literature finding both positive and ambiguous effects of public investment on growth. The document then describes the author's methodology, including data sources and definitions of variables like GDP, public investment (ADP), and gross capital formation (GCF). Descriptive statistics of the variables from 1973-2011 are also provided. The author's model specifies GDP as a linear function of ADP and GCF to test the relationship between public investment and economic growth in Bangladesh.
1. The document examines the effect of remittances on economic growth in Eastern African countries using data from 2000-2014 for Ethiopia, Kenya, Rwanda, Tanzania, and Uganda.
2. There are conflicting views on whether remittances positively or negatively impact economic growth. The study finds that remittances have a positive and significant effect on economic growth in Eastern Africa.
3. Other factors that influence economic growth in the region include foreign direct investment, investment in human capital development, while foreign aid and trade openness have adverse effects.
Financial development and economic growth in nigeriaAlexander Decker
The document discusses the relationship between financial development and economic growth in Nigeria. It analyzes previous literature on the topic which shows mixed findings on the direction of the relationship. The study aims to contribute new evidence on how financial development impacts economic growth in Nigeria using time series data and econometric modeling. Preliminary results suggest a long-run relationship between financial development indicators like bank credit and economic growth as measured by GDP. However, some variables like lending rates did not have the expected effect. The paper concludes with recommendations for policies to strengthen this relationship and foster growth.
External debt and economic growth case of jordan (1990 2011)Alexander Decker
This document summarizes a study examining the relationship between external debt and economic growth in Jordan from 1990-2011. The study finds a positive relationship between external debt and economic growth, indicating that external debt has contributed to Jordan's economic development. However, debt servicing is found to have a negative relationship with economic growth, suggesting it hampers growth. The document provides background on Jordan's economic growth rates and trends in external debt levels over the period studied.
This document examines the relationship between foreign capital inflows (foreign aid, foreign direct investment, and remittances) and economic growth in Kenya from 1970 to 2014. It finds that:
1) All three sources of foreign capital increased substantially over the period, particularly remittances which grew from $7 million in 1970 to $1.4 billion in 2014.
2) Remittance inflows to Kenya are primarily from the United Kingdom and United States, which together accounted for 64% of remittances in 2014.
3) Previous studies on the relationship between these capital inflows and economic growth have shown mixed results, with some finding a positive relationship and others a negative or no relationship.
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.
Foreign Direct Investment and Human Capital Development in a Developing Afric...ijtsrd
This document summarizes a research paper that examines the effect of foreign direct investment (FDI) on human capital development in Nigeria from 1987 to 2018. It begins with background on FDI and human capital development. It then reviews literature on the relationship between FDI and economic growth. The study uses data from the Central Bank of Nigeria and World Bank to analyze the long-run and short-run effects of FDI and other factors like exchange rates on human capital development in Nigeria, finding that FDI has a positive short-run effect but no long-run effect. It recommends that Nigeria reduce reliance on FDI and focus it on short-term plans only.
FINANCIAL DEEPENING AND FOREIGN DIRECT INVESTMENT IN NIGERIAAJHSSR Journal
ABSTRACT : This study examined the impact of FDI on financial deepening in Nigeria from 1980 to 2022.
The research questions address the trend of FDI and financial deepening in Nigeria and the relationship between
the two variables. The study will used econometrics analysis basically cointegration and error correction model
to estimate the relationship between FDI and financial deepening . The findings of this researchrevealed that
foreign direct investment exert significant impact on financial deepening in Nigeria along the long run and short
run horizon. The findings have implications for policymakers, the Nigerian government, investors, and
businesses. Understanding the impact of FDI on financial deepening helpssuggests appropriate policy measures
and strategies to enhance Nigeria's financial sector and spur economic growth. Additionally, the study
contributes to the existing literature on FDI and financial deepening, providing valuable insights for future
research in this area.
KEY WORDS: Foreign Direct Investment; Financial Deepening; Relationship
Economic Development Implications of the International Financial Institutions...AJHSSR Journal
ABSTRACT : Employment generation has remained central to the policy goal of economic development in
Nigeria. In view of this, an empirical investigation into the link between international financial institutions loans
and employment rate was carried out in this study. Specifically, the effects of loans from the International
Finance Corporation (IFC), International Development Association (IDA), Paris Club and African Development
Bank on employment rate were examined. The data for the variables were obtained from the United Nations
Development Programme Human Development Report, National Bureau of Statistics, World Development
Indicators and International Debt Statistics. The empirical investigation followed an ex post facto research
design with the application of descriptive statistics, unit root and cointegration tests as well as error correction
model and Granger causality tests as the data analysis techniques. The unit root test results revealed that all the
variables are stationary at first difference, which justifies the test for cointegration using the Johansen method. It
was found from the cointegration test results that long run relationship exists among the variables in the model.
The parsimonious ECM revealed that IDA and African Development Bank loans have a significant positive
effect on employment rate. This highlights the substantial role played these funding sources in generating
employment in Nigeria. On the contrary, International Finance Corporation and Paris Club do not have any
significant effect on employment rate. Owing to the findings, it is recommended that loans available to Nigeria
from the international development association should be channeled to investments in critical infrastructure and
agriculture development to generate employment and achieve economic development.
KEYWORDS: Employment generation, institutions loans, International Finance Corporation, IDA, Paris Club
and African Development Bank
This document summarizes a research article that analyzes the relationship between foreign direct investment (FDI), economic growth, and good governance in OECD countries from 1996-2013. It finds that FDI, economic growth, and all proxies of institutional quality (regulatory quality, corruption control, political stability, voice and accountability, and government effectiveness) have significant positive associations with each other. A Granger causality test shows bidirectional causation between FDI and regulatory quality impacting economic growth, and unidirectional causation from other institutional quality proxies to economic growth. The results imply that maintaining high institutional quality leads to greater economic growth and FDI inflows.
5.[34 42]effect of foreign direct investment and stock market development on ...Alexander Decker
This study investigates the impact of foreign direct investment (FDI) and stock market development on economic growth in Nigeria from 1980 to 2009. It finds that both FDI and lagged stock market development have a small but statistically significant positive effect on economic growth. The results support the argument that extractive FDI and stock market development enhance growth. However, both FDI and stock market development show cyclical movements over time. Lagged exchange rate appreciation is also found to positively impact growth in Nigeria. The study aims to fill a gap by examining the joint impact of FDI and stock market development on growth, which has not been the focus of prior research on Nigeria.
5.[34 42]effect of foreign direct investment and stock market development on ...Alexander Decker
This study investigates the impact of foreign direct investment (FDI) and stock market development on economic growth in Nigeria from 1980 to 2009. The study employs econometric techniques including unit root tests, cointegration, and error correction modeling. The results show that both FDI and lagged stock market development have a small but statistically significant positive effect on economic growth in Nigeria. Lagged exchange rates also have a positive impact on growth. These findings suggest that FDI, stock market development, and exchange rate appreciation can enhance economic growth in Nigeria.
11.effect of foreign direct investment and stock market development on econom...Alexander Decker
This study investigates the impact of foreign direct investment (FDI) and stock market development on economic growth in Nigeria from 1980 to 2009. The study employs econometric techniques including unit root tests, cointegration, and error correction modeling. The results show that both FDI and lagged stock market development have a small but statistically significant positive effect on economic growth in Nigeria. Lagged exchange rates also have a positive impact on growth. These findings suggest that FDI, stock market development, and exchange rate appreciation can enhance economic growth in Nigeria.
Similar to The Impact of International Capital Flows on Jordan’s Economic Growth (20)
This study examined the influence of the characteristics of the audit committee on Palestinian firms’ value. The research explores precisely the effect on the Audit Committee characteristics’ efficiency, namely, independence, expertise, evaluating the relationship among dependent and independent variables. Secondary data collected from a list of companies were registered in the Palestine Stock Exchange from 2011 to 2018. Individual variables considered are the independence & expertise of the audit committee, whereas the ROA is employed as the dependent variable as an indicator of a firm’s value. The results showed that the Audit Committee’s independence & expertise substantially positive with ROA. The study concluded that the audit committee’s characteristics are enhancing firm performance. The implications of this study’s findings can be used by decisions and policymakers, the firm’s management, and other stockholders’ interests to create reliable ties between agents and the principals.
There is increasing acceptability of emotional intelligence as a major factor in personality assessment and effective human resource management. Emotional intelligence as the ability to build capacity, empathize, co-operate, motivate and develop others cannot be divorced from both effective performance and human resource management systems. The human person is crucial in defining organizational leadership and fortunes in terms of challenges and opportunities and walking across both multinational and bilateral relationships. The growing complexity of the business world requires a great deal of self-confidence, integrity, communication, conflict, and diversity management to keep the global enterprise within the paths of productivity and sustainability. Using the exploratory research design and 255 participants the result of this original study indicates a strong positive correlation between emotional intelligence and effective human resource management. The paper offers suggestions on further studies between emotional intelligence and human capital development and recommends conflict management as an integral part of effective human resource management.
This paper examines the role of loan characteristics in mortgage default probability for different mortgage lenders in the UK. The accuracy of default prediction is tested with two statistical methods, a probit model and linear discriminant analysis, using a unique dataset of defaulted commercial loan portfolios provided by sixty-six financial institutions. Both models establish that the attributes of the underlying real estate asset and the lender are significant factors in determining default probability for commercial mortgages. In addition to traditional risk factors such as loan-to-value and debt servicing coverage ratio lenders and regulators should consider loan characteristics to assess more accurately probabilities of default.
This study examined the impact of financial innovation on money demand in Nigeria, using quarterly time series for the period 2009-2019. The dependent variable was money demand, represented by broad money, while the independent variable was financial innovation represented by modern payment channels such as volume of Automated Teller Machines (ATMs) transactions, volume of Point of Sales (POS) transactions, volume of Internet banking transactions, and volume of Mobile banking transactions. The study employed the ordinary least squares (OLS) regression technique as the estimation method within the cointegration, granger causality, and error correction modeling. The result obtained showed that financial innovation has mixed impact on money demand in Nigeria during the period of analysis. For instance, financial innovation has positive impact on money demand through volume of ATM transactions in the current period, two periods lagged of volume of mobile banking transactions, current period and one period lagged of volume of internet banking transactions, and current period’s volume of Point of Sales (POS) transactions in Nigeria. On the other hand, financial innovation has negative impact on money demand through one period lagged of volume of point of sales in Nigeria. On the stability of the demand for money function, the result of the stability tests based on the CUSUM test and CUSUM of squares test showed that the demand for money function was stable during the evaluation period. The study recommended that monetary policy strategy of the central bank of Nigeria (CBN) should be fine-tuned to ensure it is well suited to deal with the challenges posed by financial innovation by way of proliferation of sophisticated payment channels.
Equity financing is one of the sources of funding available to non-bank financial institutions which is quite prevalent in developed financial markets for small or start-up firms. This study empirically determined the effect of the Equity Financing Scheme on a sustainable increase in productivity of agro-allied small businesses in Nigeria. Data for this study were elicited through the use of a questionnaire structured in a five-point likert scale. The evaluation of the relationship between the dependent and independent variables was performed using the Ordinary Least Square regression technique. The study revealed that the equity financing scheme had a positive and significant effect on the sustainable productivity of agro-allied small businesses in South-South Nigeria. The study recommended that efforts should be made to educate the small business entrepreneurs on the benefits of equity financing as a viable option towards business growth and expansion and that the government through the various intervention agencies should restructure the long-term loan policies to give access to more growth-oriented agro-allied businesses, to increase their presently low capacity to procure heavy-duty technology to increase productivity and achieve food security in Nigeria. Small business owners should take advantage of the membership of cooperative societies and as well maintain good business relationships with suppliers; this will guarantee a continuous supply of needed materials and uninterrupted operations of the business.
This study seeks to evaluate the impact of public borrowing on economic growth in Nigeria using time series data from 1980 to 2018. Specifically, the study seeks to analyze the effect of domestic debt (proxy by Federal Government Bonds-FGB) and external debt (proxy by International Monetary Fund Loan-IMFL) on Nigerian’s Gross Domestic Product (GDP). To achieve this objective, secondary data was collected from the Central Bank of Nigeria Statistical bulleting and the Debt Management Office of Nigeria. A multiple regression model involving the dependent variable (GDP) and the independent variables (FGB and IMFL) was formulated and subjected to econometric analysis. These variables were adjusted with the Jarque-bera test of normality while the correlation result was used to check the possibility of multi-collinearity among the variables. The t-test was used to answer the research questions and test the formulated hypotheses at the 5percent statistical level. Results from the analysis show that a positive relationship exists between IMF Loan and Nigeria’s gross domestic product, while a negative relationship exists between FG Bonds and Nigeria’s gross domestic product, which violates the Keynesian theory of public debt. The study concludes that both domestic and external debt significantly affect economic growth in Nigeria. Therefore, it was recommended that public borrowing should be efficiently used and contracted solely for economic reasons and not for social or political reasons as this will help to avoid accumulation of debt stock over time.
Equity investment financing is an innovative way of financing the real sector which has considerable developmental potential. The study empirically determined the effect of Equity investment financing on sustainable increase in productivity among agro-allied small businesses in South-South Nigeria. The instrument of data collection is the research questions structured in a five-point likert scale. The evaluation of the relationship between the dependent and independent variables was performed using the Ordinary Least Square regression technique. The study revealed that equity investment financing has a positive and significant effect on the sustainable productivity of businesses in Nigeria. The study recommended educating small business entrepreneurs on the benefits of equity financing as a viable option towards business growth and expansion and that the government through the various intervention agencies should restructure the long-term loan policies to give access to more growth-oriented agro-allied businesses, to increase their presently low capacity to procure heavy-duty technology to increase productivity and achieve food security in Nigeria. Small business owners should take advantage of the membership of cooperative societies and as well maintain good business relationships with suppliers; this will guarantee a continuous supply of needed materials and uninterrupted operations of the business.
This document summarizes research on extended producer responsibility (EPR) programs for waste oil, e-waste, and end-of-life vehicles (ELVs) in Spain from 2007-2019. The main findings are:
1) Waste oil (SIG) production and e-waste (EEE) were found to be cointegrated variables, with a positive elasticity of 2.4166 for SIG with respect to EEE.
2) SIG and vehicle production (VP) were not found to be cointegrated, indicating an unstable relationship between these variables.
3) Differences in results may be due to EPR for e-waste including deposit refund systems, while EPR for ELVs
In the process of R&D globalization, due to market demand and preferential policies, many multinational companies choose to invest in R&D in China. With the increase of labor costs in coastal areas and the rapid economic development of the central and western regions, multinational companies have already shifted from coastal areas to central and western regions when choosing R&D regions in China, especially in Shaanxi Province. Therefore, studying the character of R&D investment and operating performance of Multinational Corporation in Shaanxi Province has important practical significance. This article uses the data of the R&D investment of multinational corporation in the joint annual inspection of Shaanxi Province in 2018 as the sample and uses EXCEL software to conduct data analysis to gain an in-depth understanding of the character of R&D and investment of multinational corporation in Shaanxi Province, business characteristics and business performance. And it is concluded that the R&D investment of multinational corporation in Shaanxi Province has a series of characteristics such as concentration of distribution, concentration of enterprise scale, and overall good performance of operating performance.
In Bangladesh, migrant worker’s remittances constitute one of the most significant sources of external finance. This paper investigates the existence of relation between remittance inflow and GDP and the causal link between them in Bangladesh by employing the Granger causality test under a VECM framework. Using time series data over a 38 year period, we found that growth in remittances does lead to economic growth in Bangladesh. In addition to the relationship, this paper also points out some issues that are working as impediments in getting remittance and give some recommendations to overcome those impediments.
In the context of the 4.0 revolution, technology applications, especially cloud computing will have strong impacts on all areas, including accounting systems of enterprises. Cloud computing contributes to helping the enterprise accounting apparatus become compact, help automate the input process, improve the accuracy of the input data. Besides, the issur of accounting, reporting, risk control and information security also became better, contributing to improving the effectiveness of accounting. However, besides the positive impacts, businesses also face many difficulties in deploying and applying cloud computing. However, this application requirement will become an inevitable trend contributing to improving the operational efficiency of enterprises. To promote this process requires from the State as well as businesses themselves must have awareness and appropriate decisions. Breakthroughs in information technology have dramatically changed the accounting industry and the creation of financial statements. The Internet and the technologies that use the power of the Internet are playing an important role in the management and accounting activities of businesses - who always tend to be ready to receive and use public innovations technology in collecting, storing, processing and reporting information.
In recent years, Vietnam has joined international intergration by strong export agreements of bilateral and multilateral; Vietnam’s merchandise export in 1995 was only US $5.4 billion, in 2018 Vietnam’s merchandise export increased by 45 times compared to 1995 with US $244 billion. Vietnam’s imports increased by 29 times in 2018 compared to 1995. This study is an attempt to test a method of estimating the influence of exports on several Supply-sidefactors such as production value, value added and imports through the expansion of the standard system W. Leontief I.O and Miyazawa-style economic-demographic relations. This study also tries to make an experiment in the “Leontief Paradox”.The result is that Vietnam’s export value spread to production and imports but spread low to added value, especially in the processing industry group’s fabrication. The study is based on the non-competitive I.O table in 2012 and 2018 with 16 sectors.
The profitability of commercial banks is influenced by a number of internal and external factors. This paper attempts to identify the internal factors which significantly influence the profitability of commercial banks in Bangladesh. In this study, profitability is measured by ROA and ROE which may be significantly influenced by the internal factors such as IRS, NIM, CAR, CR, DG, LD, CTI and SIZE of the bank. Data are collected from published annual reports during 2014--2018 of 23 commercial banks. Using simple regression model, it is found that CR has significant effect on the profitability and CAR has significant influence on ROA only. In addition to this, DG has significant effects on PCBs’ profitability (ROE only) where as IRS and CTI have significant influence on profitability (ROA only) of ICBs. Further, none of these variables have significant effects on the profitability of SCBs but CAR and CR are correlated with profitability (ROA only) and the causes may be the nature of services provided by SCBs to its clients. The internal policy makers should manage the influential internal factors of the banks in order to increase their profitability so that they can meet stakeholders’ expectations.
Using a series of econometric techniques, the study analysed interaction between monetary policy and private sector credit in Ghana. This study made use of monthly dataset spanning January 1999 to December 2019 of credit to the private sector (PSC) and broad money supply (M2). The results reveal that there exists cointegration, a long run stationary relation between monetary policy and private sector credit. This implies, increases in credit should prompt long-term increases in monetary policy. It is not surprising that growth in the private sector might have a stronger effect on monetary policy. The Error Correction Test is statistically significant and that all the variables demonstrate similar adjustment speeds. This implies that in the short run, both money supply and credit are somewhat equally responsive to their last period’s equilibrium error. There is unidirectional causation from private sector credit to monetary policy. It can be said that, there is an interaction between money supply and private sector credit. Thus, credit to private sector holds great potential in promoting economic growth. It can be recommended to the government to increase the credit flow to the private sector because of its strategic importance in creating and generating growth of the economy.
This paper investigates if forecasting models based on Machine Learning (ML) Algorithms are capable to predict intraday prices in the small, frontier stock market of Romania. The results show that this is indeed the case. Moreover, the prediction accuracy of the various models improves as the forecasting horizon increases. Overall, ML forecasting models are superior to the passive buy and hold strategy, as well as to a naïve strategy that always predicts the last known price action will continue. However, we also show that this superior predictive ability cannot be converted into “abnormal”, economically significant profits after considering transaction costs. This implies that intraday stock prices incorporate information within the accepted bounds of weak-form market efficiency, and cannot be “timed” even by sophisticated investors equipped with state of the art ML prediction models.
Applying the Arrow-Debreu-Mundell-Fleming model as an economic standard model, with combining axiological framework and epistemological model, it is proposed to analyze economic policies with using a synthetic model, where interest, exchange and tax rates are integrated together. Except normal monetary and fiscal policies mainly via interest and tax rates, there are feasible ways to utilize modified strategies via exchange and tax rates. When ones need to simulate national local market, ones can raise the exchange rate. Otherwise, when ones need to promote international global trade, ones may lower the exchange rate. It is found that tax reduction is good policy when tax rate is higher than normal and that tax increase is good social policy when tax rate is lower than normal, during economic depression. Also it is revealed that tax reduction is good social policy when tax rate is lower than normal, and that tax increase is good policy when tax rate is higher than normal, during economic overheat. While economic system seeks efficiency and social system pursues equality, common interest modifications with elastic exchange and tax rates could be applied for balancing efficiency and equality.
In recent times, agricultural sector has returned to the forefront of development issues in Nigeria given its contribution to employment creation, sustainable food supply and provision of raw materials to other sectors of the economy. In lieu of that, this study examines the impact of agriculture on the economic growth in Nigeria using annual time series data covering the sample period of 1981 to 2018. To analyse the data collected, Autoregression Distributed Lag (ARDL) model through the bounds testing framework is employed to measure the presence of cointegrating relations between real GDP, agricultural productivity, labour force, and agricultural export. Results show the presence of both short-run and long-run relationship among the variables, and that agriculture has a positive and significant impact on economic growth in Nigeria. These findings inform the Nigerian government on the need to expedite labour force (human capital) and agricultural export (non-oil) development with the view to achieving sustainable growth and development. In addition, developing skills and competencies of labour force through capacity building in the agricultural sector will encourage research and development thereby increase the export size, hence essential for long-term growth.
The article illustrates the results of the economic development of the first fifteen years of the XXI century under the conditions of unprecedented economic freedom, globalization and the appearance of new informational sectors up to and including the first attempts at revising liberalism. The analysis of statistical data demonstrates an obvious increase in the percentage of well-off people in many countries as well as the increased economic capabilities of small, medium and large businesses, whose assets are distributed among an ever-increasing number of owners. This provides the impetus to review our collective approach to liberalization and globalization, as well as to view its unexpected strong sides that make human progress possible.
This paper investigates the relationship between working capital management and financial performance of Pharmaceuticals and Textile firms listed at the Dhaka Securities Exchange in Bangladesh. The data analysis was carried on ten Pharmaceuticals and Textile firms for a period of 2013 to 2017. Secondary Data was analyzed by applying Descriptive Statistics, Regression and Correlation analysis to findthe relationship of current ratio, inventory conversion period and average payment period with Return on Asset. The findings indicate that the Pharmaceuticals and Textile firms’ performance is influenced by the variables relating to working capital. There is a positive relationship between profitability and current ratioand Inventory Turnover period shows a negative relationship with profitability but Average payment period shows insignificant impact on profitability. The study concludes that there exists a relationship between working capital managementand financial performance of Pharmaceuticals and Textile firms in Bangladesh. The study recommends that for the Pharmaceuticals and Textile firms to remain profitable, they should employ working capital management practice that will help in making decisions about investment mix and policy, matching investment to objective, asset allocation for institution and balancing risk against profitability.
Organizational behaviour involves the design of work as well as the psychological, emotional and interpersonal behavioural dynamics that influence organizational performance. Management as a discipline concerned with the study of overseeing activities and supervising people to perform specific tasks is crucial in organizational behaviour and corporate effectiveness. Management emphasizes the design, implementation and arrangement of various administrative and organizational systems for corporate effectiveness. While the individuals, and groups bring their skills, knowledge, values, motives, and attitudes into the organization, and thereby influencing it, the organization, on the other hand, modifies or restructures the individuals and groups through its structure, culture, policies, politics, power, and procedures, and the roles expected to be played by the people in the organization. This study conducted through the exploratory research design involved 125 participants, and result showed strong positive relationship between the variables of interest. The study was never exhaustive due to limitations in terms of time and current relevant literature, therefore, further study could examine the relationship between personality characteristics and performance in the public sector, where productivity is not outstanding, when compared with the private sector. Based on the result of this investigation it was recommended that organizations should provide emotional intelligence programmes for their membership as an important pattern of increasing co-operative behaviours and corporate effectiveness.
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The Impact of International Capital Flows on Jordan’s Economic Growth
1. International Journal of Economics and Financial Research
ISSN(e): 2411-9407, ISSN(p): 2413-8533
Vol. 5, Issue. 9, pp: 214-220, 2019
URL: https://arpgweb.com/journal/journal/5
DOI: https://doi.org/10.32861/ijefr.59.214.220
Academic Research Publishing
Group
*Corresponding Author
214
Original Research Open Access
The Impact of International Capital Flows on Jordan’s Economic Growth
Basem M. Lozi*
Dept. of Finance Full Professor Al-Balqa Applied University, Jordan
Mamoun Shakatreh
Dept. of Finance Associate Professor Al-Balqa Applied University, Jordan
Abstract
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
country’s competitiveness, and expand growth within the private sector so that everyone in Jordan has the
opportunity to contribute to a brighter future.
Keywords: International capital flow; Foreign direct investment; Worker remittances; Foreign portfolio investment; Economic
growth; Jordan.
CC BY: Creative Commons Attribution License 4.0
1. Introduction
Foreign capital has played an important role in the economic development of many countries, which are
presently considered developed economies. Most of less developed countries are still at stage where their
development depends mainly on the flow of foreign capital in the form of grants, loans, and direct foreign
investment. Countries with sound macroeconomic economic polices and well-functioning institutions are in the best
position to reap the benefits of capital flows and minimize the risks.
Regardless of the fact that all the under developed countries need foreign capital flows for their development,
the amount and the form of the foreign economics assistance differ from country to country. The country size and the
economic circumstances of the country are the major determinants of the volume and the form of the foreign capital
flows. For instance, the least developed countries of the Africa have been relying on the foreign aid, while the
developing countries of the Asia are largest beneficiary of the foreign direct investment (FDI). In case of Jordan, the
foreign capital inflow has a significant role in the country's economic development; the need of foreign capital
inflows can be justified on the following ground: Firstly, the main argument is “Two- Gap Model”, that is, deficits in
BOP and deficit in savings is major argument in favor of foreign capital inflows. Secondly, the external assistance is
also assumed to facilitate and accelerate because of the higher growth rates. Eventually, it is hoped that the need for
the foreign capital inflows will disappear as local resources become able to make development self- sustaining.
2. Review of Literature
The past decades witnessed waves of financial globalization by a surge in international capital flows among
industrial and developing countries. Such dense capital flows have been associated with high growth rates in some
developing countries. The role of foreign economic assistance in economic development and growth remains
contentions in economic literature, some studies proved its positive impact on the economic development
empirically, while some studies highlighted its negative effects as well. As Momani (1991), “foreign capital inflow,
consumption and economic growth, the experience of Jordan, 1968- 1987”, concluded, on the basis of empirical
evidence from LCDs, that foreign capital inflows have positive effect on both consumption and investment. The
results revealed that foreign capital was significant explanatory variable in both of the consumption and investment
functions.
Hasan and Trap (2000), run a regression between aid and the growth. It is shown that aid increase the growth
rate and this result aren't considered on good policy. There are, however, decreasing returns to aid, and the estimated
effectiveness of aid is highly sensitive to the choice of estimator and the set of control variables, when investment
and human capital are controlled for, no positive effect of aid is found. Yet, aid continues to impact on growth via
investment.
Chigbu et al. (2015), 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 capital in developing economies over the years have transmitted to real economic growth.
2. International Journal of Economics and Financial Research
215
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 findings
reveal that capital inflows have significant impact on the economic growth of the three countries. In Nigeria and
Ghana, foreign direct and portfolio investment as well as 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. This will help in closing the savings-investment gap and encourage
economic growth in these countries. The study signifies that a capital inflow is indispensable in closing the savings-
investment gap required for economic growth of developing countries.
Reham and Ahmad (2016), attempts to include all foreign capital inflow variables to analyze their impact on
economic growth of 21 developing countries for the period of 1990 to 2013. Modern econometric techniques are
applied for data analysis including panel unit root test and pooled mean group (PMG) estimation for short-run and
long run analysis. The results indicate that inflows including net external debt and net official development
assistance have significantly negative impact on economic growth of developing countries, while net foreign direct
investment and net remittances have positive and significant impact on economic growth in the long-run. The
negative sign of error correction term shows the convergence of the variables towards equilibrium in the long run.
The study highlights the need of allocation of foreign resources effectively and efficiently.
Chorn and Seik (2017), attempts to examine the impact of foreign capital inflows which mainly consisting of
foreign direct investment (FDI) and official development aid (ODA) on economic growth of developing countries. It
is conducted to find out the one between the two forms of foreign capital inflows that has more effective and robust
influence on the growth through the combination of the two catalysts into the same regression models. The study
sample covers 77 developing countries from all regions classified by the World Bank from year 1997 to 2012.
Ordinary Last Square (OLS) with time and entity fixed effects has been chosen as a method of running the
regression, and robust function is used in regression in an attempt to control for the possible heteroscedasticity that
often exists in panel data analysis. The results show that both FDI and ODA have positive and significant impacts on
economic growth. Yet, FDI is seen to be more robust and statistically significant. Furthermore, the marginal impacts
of FDI and ODA are not without constraint. The marginal impacts of both FDI and ODA on economic growth
decrease given the rising level of initial income per head, treating other factors constant. Moreover, provided that its
share of gross domestic saving increases the impact of ODA on growth would keep decreasing. The interaction term
between FDI and gross domestic saving also has negative sign as portions of GDP, but the estimated coefficient is
not statistically significant.
Phimmarong and Kinnalone (2017), examines the impact of different categories of foreign capital net inflows
(FDI, Portfolio investment, and other investment) as well as domestic savings on economic growth in 6 ASEAN
countries, namely Indonesia, Malaysia, Philippines, Singapore, and Thailand, and Lao PDR. Regression analyses
based on Panel Fixed-Effects estimation, show that foreign capital inflows at aggregate level is negatively correlated
with real GDP per capita growth rate. At disaggregate level, only FDI has significantly positive impact on real GDP
per capita growth rate in the two periods while portfolio investment is not found to have any significant impact on
growth in the studied periods. Short-term capital flows such as other investment is found to have negative impact on
growth rate of real GDP per capita in the two sample periods, and its impact becomes statistically significant in the
recent period, indicating the increase in its volatile nature. The results suggest that domestic savings should be
effectively mobilized and channeled into productive investments. Besides, in the context of increasing global
competition for FDI, developing countries should formulate policies to improve local skills and their human capital
as to enhance the countries’ absorptive capacity to reap benefit from FDI as well as to improve the quality of FDI
that a country can attract.
Adam (2017), examines the effects of capital flows on economic growth in Senegal using autoregressive
distributed lag (ARDL) over the period 1970–2014. Overall, our results show that remittances cause economic
growth in Senegal in the long run. In contrast, external debt has a negative impact on economic growth. The ARDL
results, however, show no cointegration between aid and growth or between foreign direct investment (FDI) and
growth. The Quandt–Andrews breakpoint test selects year 1991 as the most likely breakpoint location for the
remittances–growth equation. Finally, time-varying parameter analyses using the year 1991 as a slope dummy reveal
that remittances have been growth-enhancing post-1991. Therefore, government and policy makers in Senegal must
create a favorable atmosphere for attracting more remittances to promote economic development.
It concluded on the review of the above literature foreign capital has stimulated the economic growth on one
hand and has substitution the domestic savings on the other hand. And it caused a severe debt serving problems in
some countries. Accordingly, a foreign capital inflow has a positive impact on growth in other countries.
2.1. Objectives of the Research
The main objectives of this research are:
1. To propose a model to examine the impact of capital flows on economic growth.
2. To examine the trends and composition of capital flows.
3. To write a theoretical framework for the study variables in this research.
4. To provide some recommendations to the decision makers.
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2.2. Date and Period of Study
The secondary data involve both the qualitative and the quantitative data. There are three essential subgroups of
secondary data: the survey data, the documentary data, and the multiple –source secondary data (Hasslinger et al.,
2007). In this study, the researcher will concentrate on utlilzing the documentary sub-type of the secondary data such
as: articles, books, internet and the previous studies that relate to the topic of the research.
The date for the study has been collected from the Central Bank of Jordan (CBJ) and Department of Statistics
(DOS). The study attempts to investigate the effect of international capital inflow on Jordan’s economic growth
during the period 2005- 2017.
As soon as the data were collected, the responses were analyzed with the use of the descriptive statistics
frequencies, means, percentages, and standard deviation. The Statistical Package of Social Science (SPSS) was used
for analyzing the data. The data were entered into the program. Then, the initial analysis of the data is done, and then
recommendations and conclusions were reached.
2.3. Research Methodology
An analytical, descriptive methodology approach was followed in this research as it is suitable to the objectives
of the research. A systematic method for data analysis is implemented to investigate and explain the relationships
and connections between the study variables. The research methodology field has been used to cover the practical
side of this research, by answering questions, examining the validity of hypotheses of the study, and getting their
results out of a data that was collected for the purposes of the study based on the steps of scientific norms.
2.4. Model Design
There have been few studies with different specification regarding the impact of foreign capital flows on
Jordan’s economic growth. In order to capture the relationship between the Foreign Direct Investment (FDI),
Foreign Portfolio Investment(PFI), Worker Remittances (WR), and Grants (Gr.) the study tests stationary of the
variables using different unit root tests, namely Dicky-fuller(DF), Dickey and Fuller (1981) and Phillips and Perron
(1988) test.
Symbolically, the model on the impact of FDI, FPI, WR and Gr on Jordan’s economic growth can be written as:
GDP = α1 FDI + α2 FPI+α3 WR + α4 Gr
Where:
GDP: gross domestic product
FDI: foreign direct investment.
FPI: foreign portfolio investment.
WR: Worker Remittances
Gr: Grants
α: Regression coefficients (to be estimated) measures how much units of GDP would changed with a unit
change in independent variables (FDI, FPI, and WR).
2.5. Research Hypothesis
Ho1: There is no significant statistical impact of foreign direct investment on economic growth at the level of
(α≤0.05) in Jordan.
Ho2: There is no significant statistical impact of foreign portfolio investment on economic growth at the level
of (α≤0.05) in Jordan.
Ho3: There is no significant statistical impact of Worker Remittances on economic growth at the level of
(α≤0.05) in Jordan.
Ho4: There is no significant statistical impact of Grants on economic growth at the level of (α≤0.05) in Jordan.
3. Trends and Composition of Capital Flows into Jordan
The Jordanian economy is dominated by tourism, financial services, transportation, manufacturing and
remittances from Jordanians working abroad. Jordan's lack of arable land and insufficient supplies of water means
that agriculture is mostly a non-relevant sector and that the country invests heavily in water recycling. Jordan’s
economy is highly influenced by the state, however, recently, the efforts have been undertaken to reduce barriers to
do business. Jordan's economy expanded 1.8 percent year-on-year in the fourth quarter of 2018, compared to a 2
percent expansion in the prior period. It was the weakest growth rate since the last quarter of 2017, as output rose
less for: manufacturing (1.2 percent from 1.9 percent in Q3); utilities (1.8 percent from 2.4 percent); restaurants &
hotels (0.7 percent from 0.9 percent); wholesale and retail trade (1.3 percent from 1.4 percent); and real estate (2.4
percent from 2.5 percent). In addition, mining & quarrying fell 3.1 percent (from 2.1 percent in Q3) and construction
activity shrank 0.3 percent (vs. -0.4 percent in Q3). In contrast, output increased further for transport, storage &
communications (3.6 percent from 2.8 percent); finance & insurance services (3.1 percent from 3.0 percent); and for
agriculture, hunting, forestry & fishing (3.1 percent from 2.9 percent). Considering 2018 as a whole, the economy
grew 1.9 percent, slower than 2.1 percent in 2017. (Trading economics, 2019)
A principal source and stimulant of economic growth in Jordan has been the external financial resources that
supplemented the gross domestic product and so helped finance levels of consumption and investment in both public
and private sectors may above what could be sustained by domestic incomes. These external resources consisted
partly of foreign direct investment, foreign portfolio investment and remittances of Jordanians. The said resources
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went instrumented to Jordan’s impressive development record in past decades. However, side by side with the
economic and social benefits that these resources have brought to Jordan, there has been concern for many years that
external capital inflows are not a problem- free driver of the development process. The main features of their mixed
impact are the following:
(a) The inflow of capital stimulates the economy by raising the levels of domestic expenditure and prices. It also
bolsters the foreign exchange reserves and strengthens the exchange value of the national against foreign
currencies.
(b) The expenditure effect takes place of the additional income generated by foreign transfers is spent on non-
traded goods and services (education, health, welfare, construction and other services), while in the traded
goods sector the rise in demand is easily met by imports. In comparative terms, local production of traded
goals becomes relatively less profitable, resulting in discouragement of domestic production whether for
import- substitution or for exports.
(c) Workers remittances, to the extent they supplement households incomes, tend to raise aggregative private
consumption and family investment in education. To the extent they are directed to investment, they tend to
favor investment that could be managed by remote control from another country, such as real state and
building in contrast to investment in the more productive agricultural, industrial, and service projects that
require the presence locally of the owner or stakeholder.
(d) Rising expenditure or real estate and building tends to raise land and property prices as well as the
importance of rent and capital gain relative to wages and salaries, as a source of household income.
Altogether, a significant proposition of the income of households thus originates remittances, property rents
and capital gains rather than in wages and salaries arising from domestic productive employment.
Table-1. Capital flows into Jordan (2005 – 2017) JD. Million
Year GDP FDI FPI WR Gr
2005 7963.6 1257.8 221.7 1544.8 500.3
2006 9362.8 2316.7 -26.1 1782.7 304.3
2007 10805.1 1859.1 595.8 2122.5 343.4
2008 13971.2 2005.7 406.8 2242.0 718.2
2009 15044.5 1713.3 447.0 2214.2 333.4
2010 16417.2 1172.1 547.0 2247.3 401.7
2011 17987.7 1046.2 208.5 2152.1 1215.0
2012 19298.2 1063.1 326.8 2229.8 327.1
2013 20981.4 1382.2 1172.5 2327.7 639.0
2014 22365.9 1546.7 825.0 2388.0 1236.5
2015 23475.7 1136.2 919.6 2423.3 886.2
2016 24188.1 1102.6 845.9 2365.7 836.0
2017 25089.7 1182.0 676.7 3271.9 707.7
Source: Department of Statistics, Annual statistical Bulletin, (various issues)
Historically, the Jordanian economy has benefited from massive investment by the Gulf countries, which
continued to skyrocket until 2006. However, since then FDI has declined due to the international economic crisis,
followed by geopolitical instability, andhave since remained stable. According to UNCTAD in 2018, FDI inflows
totaled to USD 950 million, showing a decrease compared to last year (USD 2.0 billion). Estimated at USD 35
billion, the total stock of FDI represents 82.9% of the country's GDP. In order to boost FDI flows, the Government
has planned large-scale infrastructure projects (water, transportation, nuclear energy) for which it needs foreign and
private funds. A project linking the Dead Sea to the Red Sea was expected to start in 2018, but was postponed as
Jordan could not reach an agreement with Israel on how to construct the canal. Nevertheless, the Israeli opposition
seems to have dwindled and the Israeli government said early 2019 that it was ready to move ahead with the project.
(UNCTAD's 2019 World Investment Report).
4. Empirical Results
This test has been used to ensure that there is no intervention between the three variables representing the
independent variables before testing the research's hypotheses.The acceptable tolerance for the independent variable
components that was less than (1) and more than (.01), the VIF that was less than (10) (Hair Jr., 1998). These results
affirm that there is defenately no interference between the independent variable and point out that the research's
model is good. All the skewness values are below (± 1.00) which means the variables distribution is close to the
normal distribution, thus meeting the assumption for mulipule and simple regression analysis.
Table-2. below shows Skewness,VIF and Tolerance for study variables
ToleranceVIFSkewnessVariables
0.6661.546-0.722Foreign direct investment
0.5721.658-0.447Foreign portfolio investment
0.6431.677-0.046Worker Remittances
0.7421.543-0.056Gtants
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4.1. First Hypotheses
H1: There is no significant statistical impact of foreign direct investment on economic growth at the level of
(α≤0.05) in Jordan.
Table-3. Testing of first hypotheses
SigTBeta(Constant)
0.0014.51411.815FDI
0.806R
0.649R square
20.375F
0.001Sig
From the table (3) the F value shows the impact of the foreign direct investment on GDP, which indicated by
(20.375) and its significance is (0.001) which is less than (α ≤ 0.05). This provides evidence to reject the hypothesis
that states: "There is no significant statistical impact of foreign direct investment on economic growth at the level of
(α≤0.05) in Jordan." and the alternative hypothesis is accepted.
The R value is (0.806) that means there is a positive relationship between the foreign direct investment and
economic growth, the R Square for the hypothesis equals (0.649), which means the foreign portflio investment has
explained 64% of the variance in the economic growth.
Based on the values of (beta) and (T) referred in table (2), we find that foreign direct investment value
(Beta=11.815, T=4.514) where the significance as the value of t are less than 0.05 (α ≤ 0.05) and have an impact on
economic growth.
4.2. Second Hypotheses
H2: There is no significant statistical impact of foreign portfolio investment on economic growth at the level of
(α≤0.05) in Jordan.
Table-4. Testing of second hypotheses
SigTBeta(Constant)
.0074.57812.185FPI
0.707R
0.5R square
10.989F
0.007Sig
From the table (4) the F value shows the impact of the foreign portfolio investment on GDP, which indicated by
(10.989) and its significance is (0.007) which is less than (α ≤ 0.05). This provides evidence to reject the hypothesis
that states: "There is no significant statistical impact of foreign portfolio investment on economic growth at the level
of (α≤0.05) in Jordan." and the alternative hypothesis is accepted.
The R value is (0.707) that means there is a positive relationship between the foreign portflio investment and
economic growth, the R Square for the hypothesis equals (0.5), which means the foreign portflio investment has
explained 50% of the variance in the economic growth.
Based on the values of (beta) and (T) referred in table (3), we find that foreign potfolio investment value
(Beta=12.185, T=4.578) where the significance as the value of t are less than 0.05 (α ≤ 0.05) and have an impact on
economic growth.
4.3. Third Hypotheses
H3: There is no significant statistical impact of Worker Remittances on economic growth at the level of (α≤0.05)
in Jordan.
Table-5. Testing of third hypotheses
SigTBeta(Constant)
0.0292.5043.373WR
0.603R
0.364R square
6.293F
0.029Sig
From the table (5) the F value shows the impact of the foreign Worker Remittances on GDP, which indicated
by (6.293) and its significance is (0.029) which is less than (α ≤ 0.05). This provides evidence to reject the
hypothesis that states: "There is no significant statistical impact of Worker Remittances on economic growth at the
level of (α≤0.05) in Jordan." and the alternative hypothesis is accepted.
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The R value is (0.603) that means there is a positive relationship between the Worker Remittances and
economic growth, the R Square for the hypothesis equals (0.364), which means the Worker Remittances has
explained 36% of the variance in the economic growth.
Based on the values of (beta) and (T) referred in table (3), we find that Worker Remittances value (Beta=3.373,
T= 2.504) where the significance as the value of t are less than 0.05 (α ≤ 0.05) and have an impact on economic
growth.
4.4. Fourth Hypotheses
H4: There is no significant statistical impact of Grants on economic growth at the level of (α≤0.05) in Jordan.
Table-6. Testing of first hypotheses
SigTBeta(Constant)
0.0443.43110.051Gr.
0.566R
0.32R square
5.178F
0.044Sig
From the table (6) the F value shows the impact of the grants on GDP, which indicated by (5.178) and its
significance is (0.044) which is less than (α ≤ 0.05). This provides evidence to reject the hypothesis that states:
"There is no significant statistical impact of grants on economic growth at the level of (α≤0.05) in Jordan." and the
alternative hypothesis is accepted.
The R value is (0.566) that means there is a positive relationship between the grants and economic growth, the
R Square for the hypothesis equals (0.32), which means the grants has explained 32% of the variance in the
economic growth.
Based on the values of (beta) and (T) referred in table (2), we find that foreign direct investment value
(Beta=10.051, T=3.341) where the significance as the value of t are less than 0.05 (α ≤ 0.05) and have an impact on
economic growth.
5. Conclusion and Policy Implication
International capital inflow positively affects economic growth, provided if utilized properly in developing
countries above results shows that international capital inflow significantly enhances the performance of Jordanian
economy (Metwally, 2004). However, worker remittances and grants contribute to the development only in the long
run. Moreover, inflows in the form of foreign direct investment and foreign portfolio investment significantly effect
if the political and business conditions are favorable in the host countries (Yousef, 2008). The objective of the
research paper was to investigate the impact of foreign international capital inflows on economic growth of Jordan
from the time period of 2005 to 2017.
The study tried to find the impact of international capital flows ( FDI, FPI, WR and Gr.) on economic growth of
Jordan over the period of 2005 to 2017, while using time series data. These results confirm a relation between
variables and provide evidence in the support of GDP growth of Jordan.
Impacts of all these variables are found positive, FDI, FPI, WR and Gr. lead the Jordanian economy positively.
Due to new policies adopted by the government investors are highly interested in investing to Jordan economy.
According to time series data results Foreign Direct Investment has positive and significant impact on Jordan
economy (Table 3) . The R value is (0.806) that means there is a positive relationship between the foreign direct
investment and economic growth, the R Square for the hypothesis equals (0.649), which means the foreign portflio
investment has explained 64% of the variance in the economic growth. This is due direct linkage of FDI with the
cash circulation in any economy. FDI came to Jordan especially in services sector which is the biggest sector of
Jordan.
The analysis confirms the positive impact of foreign portfolio investment on economic growth (Table 4). The R
value is (0.707) that means there is a positive relationship between the foreign portflio investment and economic
growth, the R Square for the hypothesis equals (0.5), which means the foreign portflio investment has explained
50% of the variance in the economic growth.The good and stable macroeconomic environment attracts foreign
investors. In addition, foreign investors prefer to invest in the capital market which provides an opportunity of risk
diversification. Jordan is one the middle east countries and always there is unstable political conditons in the region,
however, still the government of jordan trying to relax the rules and regulations to attract more customers.
The analysis also confirms the positive impact of Remittance on economic growth (Table 5) . The R value is
(0.603) that means there is a positive relationship between the Worker Remittances and economic growth, the R
Square for the hypothesis equals (0.364), which means the Worker Remittances has explained 36% of the variance in
the economic growth. Remittances in Jordan used mainly for constructing new houses or investment in real estate in
order to increase the welfare and the recipient household instead of investment in industrial sector.
However, grants impact on GDP growth in Jordan is found to be strongly positive. The R value is (0.566) that
means there is a positive relationship between the grants and economic growth, the R Square for the hypothesis
equals (0.32), which means the grants has explained 32% of the variance in the economic growth. The economy
grew steadily from 2008 to 2018 as the Government of Jordan promoted economic reform with social and political
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development. However, the global economic crisis and more recent regional instability have caused this progress to
slow, adding significant economic pressure in a number of areas. Developed countries works with the Government
of Jordan to create economic and employment opportunities, improve the country’s competitiveness, and expand
growth within the private sector so that everyone in Jordan has the opportunity to contribute to a brighter future.
Recommendations
Regional instability refers to political volatility in neighboring countries, which mainly hinders the economic
growth of any country. The Middle East, for instance, has experienced long periods of civil war resulting in social,
political and economic consequences for the countries involved. The effect of the Middle East conflict includes
slowing the growth rate of GDP due to reduced productivity, increasing the Jordanian military expenditure at the
expense of other vital lifelines, increased unemployment rates, reduced foreign income, intensified borrowing to
fund budget deficits and taking severe measures, such as tax increases. Nothing good emanates from being a
neighbor to an unstable country. Although the state had witnessed a global financial crisis, its recovery plan was
coincidentally hindered by the regional instability occasioned by the Syrian conflict (Al-Shriedeh The Jordan Times,
2019).
1- The policy makers in Jordan should attract the capital inflow and take the advantages of the capital inflow
spillover effects. Therefore, the government needs to improve its infrastructure facilities and relax the rules
and regulations in order to attract more foreign investment.
2- Interest rates policy should be carefully designed to attract capital flows to official channels; policy makers
should not only look at nominal interest rate should be adjusted to reflect inflationary pressures.
3- the research also strongly recommends that Jordan policy makers continue their efforts towards stabilizing the
region because of its importance for Jordan development and progress.
4- Additionally, Jordan policy makers are recommended to diversify the economy to be an industrial instead of
being a service based economy.
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