Effect of foreign direct investment on domestic investment in BRICS
This study investigated the effect of FDI on domestic investment in BRICS using pooled ordinary least squares (pooled OLS), fixed effects, and fully modified ordinary least squares (FMOLS). Panel data spanning from 1988 to 2020 were used in this study. Mixed results, conflicting findings and diverge...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2022-12-01
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| Series: | Investment Management & Financial Innovations |
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| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/17425/IMFI_2022_04_Tsaur.pdf |
| _version_ | 1826953593320636416 |
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| author | Kunofiwa Tsaurai |
| author_facet | Kunofiwa Tsaurai |
| author_sort | Kunofiwa Tsaurai |
| collection | DOAJ |
| description | This study investigated the effect of FDI on domestic investment in BRICS using pooled ordinary least squares (pooled OLS), fixed effects, and fully modified ordinary least squares (FMOLS). Panel data spanning from 1988 to 2020 were used in this study. Mixed results, conflicting findings and divergent views on the FDI-domestic investment nexus prompted the paper to contribute to the existing literature on the subject. The study produced results that show that domestic investment was significantly enhanced by the inflow of FDI. The positive effect of savings on domestic investment was also noted to be positively significant. Results on personal remittances-domestic investment were mixed, (1) significantly positive under the pooled OLS (models 1, 2 and 3) and FMOLS approaches (model 1) and (2) non-significantly positive under the fixed effects (models 1, 2 and 3) and FMOLS (models 2, 3). The complementarity between savings and FDI had a significant positive influence on domestic investment, whilst the positive impact of a combination of FDI and personal remittances on domestic investment was not significant. BRICS nations are therefore encouraged to implement FDI inflow enhancing measures, strategies and policies to increase individual country’s domestic investment levels.
Acknowledgment Kunofiwa Tsaurai gratefully acknowledges the moral support from the University of South Africa. |
| first_indexed | 2024-04-12T05:37:44Z |
| format | Article |
| id | doaj.art-605e135d98dd4637856130f8b459e96e |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2025-02-17T23:23:23Z |
| publishDate | 2022-12-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-605e135d98dd4637856130f8b459e96e2024-12-02T05:48:16ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582022-12-0119426027310.21511/imfi.19(4).2022.2117425Effect of foreign direct investment on domestic investment in BRICSKunofiwa Tsaurai0https://orcid.org/0000-0001-8041-1181Ph.D., Full Professor, Economic and Management Sciences Faculty, Finance, Risk Management and Banking Department, University of South AfricaThis study investigated the effect of FDI on domestic investment in BRICS using pooled ordinary least squares (pooled OLS), fixed effects, and fully modified ordinary least squares (FMOLS). Panel data spanning from 1988 to 2020 were used in this study. Mixed results, conflicting findings and divergent views on the FDI-domestic investment nexus prompted the paper to contribute to the existing literature on the subject. The study produced results that show that domestic investment was significantly enhanced by the inflow of FDI. The positive effect of savings on domestic investment was also noted to be positively significant. Results on personal remittances-domestic investment were mixed, (1) significantly positive under the pooled OLS (models 1, 2 and 3) and FMOLS approaches (model 1) and (2) non-significantly positive under the fixed effects (models 1, 2 and 3) and FMOLS (models 2, 3). The complementarity between savings and FDI had a significant positive influence on domestic investment, whilst the positive impact of a combination of FDI and personal remittances on domestic investment was not significant. BRICS nations are therefore encouraged to implement FDI inflow enhancing measures, strategies and policies to increase individual country’s domestic investment levels. Acknowledgment Kunofiwa Tsaurai gratefully acknowledges the moral support from the University of South Africa.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/17425/IMFI_2022_04_Tsaur.pdfBRICSforeign investmentpanel dataremittancessavings |
| spellingShingle | Kunofiwa Tsaurai Effect of foreign direct investment on domestic investment in BRICS Investment Management & Financial Innovations BRICS foreign investment panel data remittances savings |
| title | Effect of foreign direct investment on domestic investment in BRICS |
| title_full | Effect of foreign direct investment on domestic investment in BRICS |
| title_fullStr | Effect of foreign direct investment on domestic investment in BRICS |
| title_full_unstemmed | Effect of foreign direct investment on domestic investment in BRICS |
| title_short | Effect of foreign direct investment on domestic investment in BRICS |
| title_sort | effect of foreign direct investment on domestic investment in brics |
| topic | BRICS foreign investment panel data remittances savings |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/17425/IMFI_2022_04_Tsaur.pdf |
| work_keys_str_mv | AT kunofiwatsaurai effectofforeigndirectinvestmentondomesticinvestmentinbrics |