The Effect of Financial Crisis and Macroeconomic Factors on FDI in Developing Countries
Developing countries needs FDI to be at par with the progress of developed countries. The dearth of study on the effects of financial crisis on FDI justifies the objective which is to examine the potential effect of financial crisis inclusive of macroeconomic factors as control variables on FDI in d...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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EconJournals
2017-01-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | http://mail.econjournals.com/index.php/ijefi/article/view/3091 |
| _version_ | 1828029349060673536 |
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| author | Anita Hasli Nurhani Aba Ibrahim Catherine S.F. Ho |
| author_facet | Anita Hasli Nurhani Aba Ibrahim Catherine S.F. Ho |
| author_sort | Anita Hasli |
| collection | DOAJ |
| description | Developing countries needs FDI to be at par with the progress of developed countries. The dearth of study on the effects of financial crisis on FDI justifies the objective which is to examine the potential effect of financial crisis inclusive of macroeconomic factors as control variables on FDI in dataset 23 developing countries for the period 1993-2013. This study includes descriptive analysis, correlation test, stationary test and regression analysis. The random effects generalized least square (GLS) estimator is used in the regression to examine the potential effect of financial crisis and macroeconomic factors on the inflow of FDI. Foremost, the US financial crisis has a positive significance to the inflow of FDI which validates Krugman's theory on fire-sale FDI. However, country specific economic recession, lending rates and natural resources discourage inflow of FDI. Nonetheless, trade openness, domestic currency, money supply and domestic fixed investment encourage FDI in developing countries.
Keywords: Foreign Direct Investment; financial crisis; REM; developing countries
JEL Classifications: C33; F21; G01; P52
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| first_indexed | 2024-04-10T14:08:58Z |
| format | Article |
| id | doaj.art-9f8660b3750c465baf2d14fe663c2420 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T14:08:58Z |
| publishDate | 2017-01-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-9f8660b3750c465baf2d14fe663c24202023-02-15T16:09:51ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382017-01-0171The Effect of Financial Crisis and Macroeconomic Factors on FDI in Developing CountriesAnita Hasli0Nurhani Aba IbrahimCatherine S.F. HoUniversiti Teknologi MARADeveloping countries needs FDI to be at par with the progress of developed countries. The dearth of study on the effects of financial crisis on FDI justifies the objective which is to examine the potential effect of financial crisis inclusive of macroeconomic factors as control variables on FDI in dataset 23 developing countries for the period 1993-2013. This study includes descriptive analysis, correlation test, stationary test and regression analysis. The random effects generalized least square (GLS) estimator is used in the regression to examine the potential effect of financial crisis and macroeconomic factors on the inflow of FDI. Foremost, the US financial crisis has a positive significance to the inflow of FDI which validates Krugman's theory on fire-sale FDI. However, country specific economic recession, lending rates and natural resources discourage inflow of FDI. Nonetheless, trade openness, domestic currency, money supply and domestic fixed investment encourage FDI in developing countries. Keywords: Foreign Direct Investment; financial crisis; REM; developing countries JEL Classifications: C33; F21; G01; P52 http://mail.econjournals.com/index.php/ijefi/article/view/3091 |
| spellingShingle | Anita Hasli Nurhani Aba Ibrahim Catherine S.F. Ho The Effect of Financial Crisis and Macroeconomic Factors on FDI in Developing Countries International Journal of Economics and Financial Issues |
| title | The Effect of Financial Crisis and Macroeconomic Factors on FDI in Developing Countries |
| title_full | The Effect of Financial Crisis and Macroeconomic Factors on FDI in Developing Countries |
| title_fullStr | The Effect of Financial Crisis and Macroeconomic Factors on FDI in Developing Countries |
| title_full_unstemmed | The Effect of Financial Crisis and Macroeconomic Factors on FDI in Developing Countries |
| title_short | The Effect of Financial Crisis and Macroeconomic Factors on FDI in Developing Countries |
| title_sort | effect of financial crisis and macroeconomic factors on fdi in developing countries |
| url | http://mail.econjournals.com/index.php/ijefi/article/view/3091 |
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