The causality relationship between financial development and foreign direct investment
Although the role of FDI on economic growth has been studied extensively, there is no systematic study carried out to examine the causal relationship between FDI and the level of financial development. Therefore, this paper investigates this issue by examining the causal relationship between FDI an...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English English |
| Published: |
Faculty of Management and Human Resource Development
2007
|
| Subjects: | |
| Online Access: | http://eprints.utm.my/8135/1/ZZakaria2007-The_Causility_Relationship_Between_Financial.pdf http://eprints.utm.my/8135/3/25-bil-10-dis-2007.html |
| _version_ | 1825910152840085504 |
|---|---|
| author | Zakaria, Zukarnain |
| author_facet | Zakaria, Zukarnain |
| author_sort | Zakaria, Zukarnain |
| collection | ePrints |
| description | Although the role of FDI on economic growth has been studied extensively, there is no systematic study carried out to examine the causal relationship between FDI and the level of
financial development. Therefore, this paper investigates this issue by examining the causal relationship between FDI and financial development in 37 developing countries in a
multivariate framework. The findings from causality tests provide little support for the hypothesis that the inflows of FDI can contribute to the development of the domestic banking sector in developing countries. This study also finds that FDI has no effect on the development of the domestic banking sector. There is also little support for the argument that the development of the domestic banking sector causes FDI. In contrast, the author finds strong support that FDI can affect the development of the domestic stock markets in the developing countries, and vice versa. |
| first_indexed | 2024-03-05T18:12:47Z |
| format | Article |
| id | utm.eprints-8135 |
| institution | Universiti Teknologi Malaysia - ePrints |
| language | English English |
| last_indexed | 2024-03-05T18:12:47Z |
| publishDate | 2007 |
| publisher | Faculty of Management and Human Resource Development |
| record_format | dspace |
| spelling | utm.eprints-81352014-01-09T03:56:56Z http://eprints.utm.my/8135/ The causality relationship between financial development and foreign direct investment Zakaria, Zukarnain HG Finance Although the role of FDI on economic growth has been studied extensively, there is no systematic study carried out to examine the causal relationship between FDI and the level of financial development. Therefore, this paper investigates this issue by examining the causal relationship between FDI and financial development in 37 developing countries in a multivariate framework. The findings from causality tests provide little support for the hypothesis that the inflows of FDI can contribute to the development of the domestic banking sector in developing countries. This study also finds that FDI has no effect on the development of the domestic banking sector. There is also little support for the argument that the development of the domestic banking sector causes FDI. In contrast, the author finds strong support that FDI can affect the development of the domestic stock markets in the developing countries, and vice versa. Faculty of Management and Human Resource Development 2007-12 Article PeerReviewed application/pdf en http://eprints.utm.my/8135/1/ZZakaria2007-The_Causility_Relationship_Between_Financial.pdf text/html en http://eprints.utm.my/8135/3/25-bil-10-dis-2007.html Zakaria, Zukarnain (2007) The causality relationship between financial development and foreign direct investment. Jurnal Kemanusiaan (10). pp. 1-23. ISSN 1675-1930 |
| spellingShingle | HG Finance Zakaria, Zukarnain The causality relationship between financial development and foreign direct investment |
| title | The causality relationship between financial development and foreign direct investment
|
| title_full | The causality relationship between financial development and foreign direct investment
|
| title_fullStr | The causality relationship between financial development and foreign direct investment
|
| title_full_unstemmed | The causality relationship between financial development and foreign direct investment
|
| title_short | The causality relationship between financial development and foreign direct investment
|
| title_sort | causality relationship between financial development and foreign direct investment |
| topic | HG Finance |
| url | http://eprints.utm.my/8135/1/ZZakaria2007-The_Causility_Relationship_Between_Financial.pdf http://eprints.utm.my/8135/3/25-bil-10-dis-2007.html |
| work_keys_str_mv | AT zakariazukarnain thecausalityrelationshipbetweenfinancialdevelopmentandforeigndirectinvestment AT zakariazukarnain causalityrelationshipbetweenfinancialdevelopmentandforeigndirectinvestment |