Drivers of Foreign Direct Investment Inflows to Emerging Asian Economies-Reference-Cited by-同舟云学术

Drivers of Foreign Direct Investment Inflows to Emerging Asian Economies

Published:2023-11-14 Issue: Volume: Page:
ISSN:0972-6527
Container-title:Journal of Emerging Market Finance
language:en
Short-container-title:Journal of Emerging Market Finance

Author:

Dua Pami¹,Verma Neha²^ORCID

Affiliation:

1. Department of Economics, Delhi School of Economics, University of Delhi, New Delhi, India

2. Department of Economics, Kirori Mal College, University of Delhi, New Delhi, India

Abstract

This article examines the role of domestic and global factors in driving foreign direct investment (FDI) inflows to Asian emerging economies. Conventional panel estimations do not adequately account for the interdependence among countries caused by common global shocks and spatial effects. This article, employing a novel technique, augments the panel cointegration estimations with a proxy for unobserved common factors extracted from the augmented mean group regression. Our estimations control for nonstationarity, endogeneity, cross-sectional dependence, and heterogeneity. Based on the data of six Asian emerging economies from 2000Q1 to 2019Q4, we find a significant impact of both push (global) and pull (domestic) factors in attracting FDI. Our policy implication suggests the sequential opening of the capital account with capital controls and macroprudential regulations in place. JEL Codes: F21, F30, F41

Publisher

SAGE Publications

Subject

Economics and Econometrics,Finance

Link

http://journals.sagepub.com/doi/pdf/10.1177/09726527231196722

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