The dance of politics and international finance: exploring determinants of foreign direct investment Online publication date: Fri, 24-Sep-2021
by Faheem Gul Gilal; Amjad Ali Memon; Asad Ali Memon; Naeem Gul Gilal
International Journal of Technology, Policy and Management (IJTPM), Vol. 21, No. 3, 2021
Abstract: The main purpose of this study is to empirically investigate the structural relationship between macroeconomic indicators (e.g., political stability, economic uncertainty, and financial inclusion) on foreign direct investment (FDI), and to explore which macroeconomic indicator is more capable of increasing FDI. To this end, the panel data of the aforementioned variables were obtained from two most rapidly developing countries (e.g., China and Russia) and from one highly developed country (e.g., UK) for the period from 2004 to 2018. Data diagnostic and auto-regressive distributed lag (ARDL) model was used as a method to test hypothesised relationships among variables. Our results establish that the more politically and economically stable countries receive greater FDI than the less stable countries. Findings further suggest that economic uncertainty and financial inclusion negatively affect FDI. Finally, we discuss the implication for policy in a great detail.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Technology, Policy and Management (IJTPM):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com