Determinants of Foreign Direct Investment in 31 Asian Countries for the 2002-2017 Period
This research aims to analyze the determinants of Foreign Direct Investment (FDI) in 31 Asian countries in 2002 - 2017. The determinant variables of FDI are political stability, inflation rate, trade openness, exchange rate, market size and interest rate. This study uses the Generalized Method of Moment (GMM) method or dynamic panel. The study results show that political stability, trade openness, and market size has positive relationship with the FDI inflows of the country. The inflation rate variable has a negative relationship with the entry of FDI in the host country. In comparison, exchange rates and interest rates do not relate to the host country's inflow of FDI. This study contributes to the government by providing several crucial determinants of FDI, as FDI benefits the host country. (original abstract)
- Abdulrahman, E., & Saif, A.. A. H. A. (2019). The impact of political stability and absence of violence/terrorism on foreign direct investment flows in the Arab countries. North American Academic Research, 3(1), 1-20. https://doi.org/10.5281/zenodo.3629946
- Adebayo, E. O., & Gambiyo, S. P. (2020). Economic analysis of the determinants of foreign direct investment (FDI) In Nigeria. Archives of Business Research, 8(1), 74-81. https://doi.org/10.14738/abr.81.7542
- Abdul Hadi. A.R., Rehan, R., Zainudin, Z. & Hussain, H.I. (2018). Capital structure determinants of Shariah and non-Shariah companies at Bursa Malaysia. Opcion, 34(16), 376-386.
- Al-Samman, H., & Mouselli, S. (2018). Does country risk affect FDI to GCC countries? Pertanika Journal of Social Sciences & Humanities, 26(4), 2627-2642.
- Ali, S., Yusop, Z., Kaliappan, S. R., & Chin, L. (2020). Dynamic common correlated effects of trade openness, FDI, and institutional performance on environmental quality: Evidence from OIC countries. Environmental Science Pollution Research, 27, 1-12. https://doi.org/10.1007/s11356-020-07768-7
- Asamoah, L. A., Mensah, E. K., & Bondzie, E. A. (2019). Trade openness, FDI and economic growth in sub-Saharan Africa: do institutions matter? Transnational Corporations Review, 11(1), 65-79. https://doi.org/10.1080/19186444.2019.1578156
- Asamoah, M. E., Adjasi, C. K., & Alhassan, A. L. (2016a). Macroeconomic uncertainty, foreign direct investment and institutional quality: Evidence from Sub-Saharan Africa. Economic Systems, 40(4), 612-621. https://doi.org/10.1016/j.ecosys.2016.02.010
- Ayomitunde, A. T., Ganiyu, A. B., Sokunbi, G. M., & Adebola, B. Y. (2020). The determinants of foreign direct investment inflows in Nigeria: An empirical investigation. Acta Universitatis Danubius. OEconomica, 16(3), 131-142.
- Bhavan, T., Xu, C., & Zhong, C. (2011). The relationship between foreign aid and FDI in South Asian economies. International Journal of Economics and Finance, 3(2), 143-149. https://doi.org/10.5539/ijef.v3n2p143
- Carbaugh, R. J. (2013). Contemporary economics: An applications approach. ME Sharpe.
- Castaño, M. S., Méndez, M. T., & Galindo, M. Á. (2016). The effect of public policies on entrepreneurial activity and economic growth. Journal of Business Research, 69(11), 5280-5285. https://doi.org/10.1016/j.jbusres.2016.04.125
- Cui, L., & Xu, Y. (2019). Outward FDI and profitability of emerging economy firms: Diversifying from home resource dependence in early stage internationalization. Journal of World Business, 54(4), 372-386. https://doi.org/10.1016/j.jwb.2019.04.002
- Dewi, P. K., & Triaryati, N. (2015). Pengaruh pertumbuhan ekonomi, suku bunga dan pajak terhadap investasi asing langsung [The effect of economic growth, interest rates and taxes on foreign direct investment]. Journal Manajemen Universitas Udayana, 4(4).
- Dhahri, S., & Omri, A. (2020). Does foreign capital really matter for the host country agricultural production? Evidence from developing countries. Review of World Economics, 156(1), 153-181. https://doi.org/10.1007/s10290-019-00361-2
- Eregha, P. (2019). Exchange rate, uncertainty and foreign direct investment inflow in West African monetary zone. Global Business Review, 20(1), 1-12. https://doi.org/10.1177/0972150918803835
- Ergano, D., & Rambabu, K. (2020). Ethiopia's FDI inflow from India and China: Analysis of trends and determinants. Journal of Economic Structures, 9, 1-20. https://doi.org/10.1186/s40008-020-00211-7
- Hussain, H.I., Abidin, I.S.Z., Kamarulzaman, R., Shawtari, F.A. (2018). The impact of state affiliated directors on the capital structure speed of adjustment in an emerging market. Polish Journal of Management Studies, 18(1), 133-148. https://doi.org/10.17512/pjms.2018.18.1.11
- Jadhav, P. (2012). Determinants of foreign direct investment in BRICS economies: Analysis of economic, institutional and political factor. Procedia-Social and Behavioral Sciences, 37, 5-14. https://doi.org/10.1016/j.sbspro.2012.03.270
- Kamran, H. W., Chaudhry, N., Murtaza, M. M., Zafar, N., Yousaf, A., & Nazish, H. (2016). Financial market development, bank risk with key indicators and their impact on financial performance: A study from Pakistan. American Journal of Industria Business Management, 6(03), 373. https://doi.org/10.4236/ajibm.2016.63033
- Kraay, A., Kaufmann, D., & Mastruzzi, M. (2010). The worldwide governance indicators: methodology and analytical issues: The World Bank.
- Kusumawardani, D., & Mubin, M. K. (2019). The exchange rate misalignment, volatility and the export performance: Evidence from Indonesia. Iranian Economic Review, 23(3), 561-591. https://doi.org/10.22059/IER.2019.71780
- Marsela, N. M. K. (2014). Pengaruh tangkat inflasi, PDRB, suku bunga kredit, serta kurs dollar terhadap investasi [The influence of inflation rate, GRDP, credit interest rate, and dollar exchange rate on investment]. Jurnal Ekonomi Pembangunan Universitas Udayana, 3(3), 44439.
- Meidayati, A. W. (2017). Impact of telecommunication infrastructure, market size, trade openness and labor force on foreign direct investment in ASEAN. Journal of Developing Economies, 2(2), 76-86. https://doi.org/10.20473/jde.v2i2.6677
- Mohamed, S. E., & Sidiropoulos, M. G. (2010). Another look at the determinants of foreign direct investment in MENA countries: An empirical investigation. Journal of Economic Development, 35(2), 75. https://doi.org/10.35866/caujed.2010.35.2.005
- Mustafa, A. M. M. (2019). The relationship between foreign direct investment and inflation: econometric analysis and forecasts in the case of Sri Lanka. Journal of Politics and Law., 12(2), 44-52. https://doi.org/10.5539/jpl.v12n2p44
- Saepuloh, D., & Mulatsih, S. N., & Sutarjo (2019). The influence of economic growth, BI rate, and inflation and the impact on direct foreign investment in Indonesia in 2010-2017. KnE Social Sciences, 1172-1187. https://doi.org/10.18502/kss.v3i13.4275S
- Safari, M., de Castro, V. B., & Steccolini, I. (2020). The interplay between home and host logics of accountability in multinational corporations (MNCs): The case of the Fundão dam disaster. Accounting, Auditing Accountability Journal, 33(8), 1761-1789. https://doi.org/10.1108/AAAJ-03-2019-3912
- Sari, D. W., Khalifah, N. A., & Suyanto, S. (2016). The spillover effects of foreign direct investment on the firms' productivity performances. Journal of Productivity Analysis, 46(2-3), 199-233. https://doi.org/10.1007/s11123-016-0484-0
- Tan, B. W., & Tang, C. F. (2016). Examining the causal linkages among domestic investment, FDI, trade, interest rate and economic growth in ASEAN-5 countries. International Journal of Economics Financial Issues, 6(1), 214-220.
- Ullah, I., & Khan, M. A. (2017). Institutional quality and foreign direct investment inflows: Evidence from Asian countries. Journal of Economic Studies, 44(6), 1030-1050. https://doi.org/10.1108/JES-10-2016-0215
- Usman, M., Kamran, H. W., & Khalid, H. (2012). Impact of exports on economic growth - A case of Luxemburg. Information Management Business Review, 4(1), 1-7.
- World Bank Group. (2013). Global financial development report 2014: Financial inclusion (Vol. 2): World Bank Publications.
- Xu, X., & Sheng, Y. (2012). Are FDI spillovers regional? Firm-level evidence from China. Journal of Asian Economics, 23(3), 244-258. https://doi.org/10.1016/j.asieco.2010.11.009