Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries
This paper examines the relationship between outward foreign direct investment and domestic investment, which is regarded with increased interest as a driver of growth in domestic markets for Gulf Cooperation Council (GCC) economies. Mean group (MG), pooled mean group (PMG) and dynamic fixed effect...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Asian Economic and Social Society
2021
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| Online Access: | http://eprints.utm.my/95061/1/MaizaitulaidawatiMdHusin2021_RelationshipBetweenOutwardForeignDirectInvestment.pdf |
| _version_ | 1796865945575096320 |
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| author | Durani, Farah Ameer, Waqar Meo, Muhammad Saeed Md. Husin, Maizaitulaidawati |
| author_facet | Durani, Farah Ameer, Waqar Meo, Muhammad Saeed Md. Husin, Maizaitulaidawati |
| author_sort | Durani, Farah |
| collection | ePrints |
| description | This paper examines the relationship between outward foreign direct investment and domestic investment, which is regarded with increased interest as a driver of growth in domestic markets for Gulf Cooperation Council (GCC) economies. Mean group (MG), pooled mean group (PMG) and dynamic fixed effect (DFE) approaches have been applied to measure short-run and long-run effects of domestic investment (DI) on outward foreign direct investment (OFDI) by relaxing the assumption of cross-sectional dependence (CD). This research shows that ignoring cross-sectional dependency among the countries which are parallel in economic structure may result in biased economic estimations. The findings of the dynamic fixed effect estimators show that domestic investment has negative and significant effects on FDI outflows in the long run in GCC countries. Furthermore, some of macroeconomic variables (trade and inflation) have insignificant effects on OFDI, whereas human capital has positive and significant effects on FDI outflows in the long run. The findings of this research remain important for policy makers to determine the practical efficacy of market reforms steered towards boosting domestic investment and growth. Furthermore, the policies related to the development of human capital can also take guidance from this study. |
| first_indexed | 2024-03-05T21:04:48Z |
| format | Article |
| id | utm.eprints-95061 |
| institution | Universiti Teknologi Malaysia - ePrints |
| language | English |
| last_indexed | 2024-03-05T21:04:48Z |
| publishDate | 2021 |
| publisher | Asian Economic and Social Society |
| record_format | dspace |
| spelling | utm.eprints-950612022-04-29T22:32:32Z http://eprints.utm.my/95061/ Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries Durani, Farah Ameer, Waqar Meo, Muhammad Saeed Md. Husin, Maizaitulaidawati HB Economic Theory This paper examines the relationship between outward foreign direct investment and domestic investment, which is regarded with increased interest as a driver of growth in domestic markets for Gulf Cooperation Council (GCC) economies. Mean group (MG), pooled mean group (PMG) and dynamic fixed effect (DFE) approaches have been applied to measure short-run and long-run effects of domestic investment (DI) on outward foreign direct investment (OFDI) by relaxing the assumption of cross-sectional dependence (CD). This research shows that ignoring cross-sectional dependency among the countries which are parallel in economic structure may result in biased economic estimations. The findings of the dynamic fixed effect estimators show that domestic investment has negative and significant effects on FDI outflows in the long run in GCC countries. Furthermore, some of macroeconomic variables (trade and inflation) have insignificant effects on OFDI, whereas human capital has positive and significant effects on FDI outflows in the long run. The findings of this research remain important for policy makers to determine the practical efficacy of market reforms steered towards boosting domestic investment and growth. Furthermore, the policies related to the development of human capital can also take guidance from this study. Asian Economic and Social Society 2021 Article PeerReviewed application/pdf en http://eprints.utm.my/95061/1/MaizaitulaidawatiMdHusin2021_RelationshipBetweenOutwardForeignDirectInvestment.pdf Durani, Farah and Ameer, Waqar and Meo, Muhammad Saeed and Md. Husin, Maizaitulaidawati (2021) Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries. Asian Economic and Financial Review, 11 (4). pp. 278-291. ISSN 2305-2147 http://dx.doi.org/10.18488/JOURNAL.AEFR.2021.114.278.291 |
| spellingShingle | HB Economic Theory Durani, Farah Ameer, Waqar Meo, Muhammad Saeed Md. Husin, Maizaitulaidawati Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries |
| title | Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries |
| title_full | Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries |
| title_fullStr | Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries |
| title_full_unstemmed | Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries |
| title_short | Relationship between outward foreign direct investment and domestic investment: Evidence from GCC countries |
| title_sort | relationship between outward foreign direct investment and domestic investment evidence from gcc countries |
| topic | HB Economic Theory |
| url | http://eprints.utm.my/95061/1/MaizaitulaidawatiMdHusin2021_RelationshipBetweenOutwardForeignDirectInvestment.pdf |
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