Article: The COVID-19 pandemic effects on FDI in select emerging economies Journal: Journal of Business and Management (JBM) 2025 Vol.30 No.2 pp.1 - 24 Abstract: This paper explores the relationship between stock markets and foreign direct investment (FDI) inflows in four major emerging markets: Brazil, Russia, India, and South Africa. Using quarterly data from 1997Q1 to 2020Q3, including the COVID-19 period, we analyse the influence of stock market levels and returns on FDI using various statistical models. Our findings show that stock market performance is a key determinant of FDI decisions, with changes in FDI inflows occurring gradually in response to stock market shifts. The first quarter of 2020, marked by COVID-19 and a sharp market decline, significantly disrupted FDI patterns. Additionally, macroeconomic factors such as GDP growth, exchange rates, and interest rates also impact FDI. By incorporating financial variables often omitted in existing research, this study adds to the ongoing debate on FDI determinants, particularly under global uncertainty. This is the first panel data study focusing on the stock market-FDI nexus in these four emerging economies. Inderscience Publishers - linking academia, business and industry through research

Title: The COVID-19 pandemic effects on FDI in select emerging economies

Authors: Rama K. Malladi; Burhan F. Yavas

Addresses: Department of Accounting, Finance, and Economics (SBS, II 4320), California State University-Dominguez Hills, Carson, CA 90747, USA ' Department of Accounting, Finance, and Economics (SBS, II 4320), California State University-Dominguez Hills, Carson, CA 90747, USA

Abstract: This paper explores the relationship between stock markets and foreign direct investment (FDI) inflows in four major emerging markets: Brazil, Russia, India, and South Africa. Using quarterly data from 1997Q1 to 2020Q3, including the COVID-19 period, we analyse the influence of stock market levels and returns on FDI using various statistical models. Our findings show that stock market performance is a key determinant of FDI decisions, with changes in FDI inflows occurring gradually in response to stock market shifts. The first quarter of 2020, marked by COVID-19 and a sharp market decline, significantly disrupted FDI patterns. Additionally, macroeconomic factors such as GDP growth, exchange rates, and interest rates also impact FDI. By incorporating financial variables often omitted in existing research, this study adds to the ongoing debate on FDI determinants, particularly under global uncertainty. This is the first panel data study focusing on the stock market-FDI nexus in these four emerging economies.

Keywords: stock returns; foreign direct investment; FDI decisions; supply chains; M&A; emerging markets; BRICS.

DOI: 10.1504/JBM.2025.151584

Journal of Business and Management, 2025 Vol.30 No.2, pp.1 - 24

Received: 08 Nov 2024
Accepted: 03 Jun 2025
Published online: 09 Feb 2026 *

Title: The COVID-19 pandemic effects on FDI in select emerging economies

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