Three Essays on the Impact of Foreign Direct Investment on Productivity PDF Download
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Author: Jen-Chung Mei
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Languages : en
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Author: Jen-Chung Mei
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Languages : en
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Author: Md Abdullah
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Languages : en
Pages : 0
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This dissertation comprises three essays on macroeconomic impacts of foreign direct investment (FDI). The first essay analyses the impact of FDI on the growth rate of total factor productivity of host countries. The essay focuses on 77 low- and middle-income countries and is based on balanced panel data for the period 1980-2008. The system GMM and common correlated effects (CCE) panel data methods are applied to estimate the models. Estimated coefficients show that FDI does not have any significant impact on the growth rate and the levels of TFP. The second essay investigates the relationship between FDI and domestic investment focusing on low- and middle-income countries, and using panel data for the period 1980-2012. It applies common parameter and heterogeneous parameter, static and dynamic, single equation and simultaneous equation panel data econometric techniques to study the relationship. Empirical findings suggest that FDI crowds our domestic investment. Our estimated coefficients also suggest that countries that have weak institutions, less developed financial systems, less human capital, less developed infrastructure, or economies that are more open, are more exposed to foreign competition and experience stronger crowding out from inward FDI. In the third essay, the influence of capital flows on the real exchange rate of recipient countries is analysed. The influence of three important capital flows, viz. foreign direct investment (FDI), foreign aid, and remittances, are assessed on the real exchange rate, using data for 45 middle- and low-income countries for the period 1980-2013. Both heterogeneous and homogeneous panel data methods are applied to estimate the real exchange rate models. The estimated coefficients of these models imply that foreign direct investment (FDI) and remittances do not influence the real exchange rate. Aid tends to depreciate the real exchange rate. Findings also suggest that financial development does not influence the exchange rate impact of aid in our sample countries. The study further finds that while aid tends to increase real exchange rate volatility, FDI and remittances do not have any robust influence on volatility.
Author: Feng Liang
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Languages : en
Pages : 284
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Author: Krishna Srinivasan
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Languages : en
Pages : 314
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Author: Nitesh Saha
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Category : Economic development
Languages : en
Pages : 280
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Category :
Languages : en
Pages : 101
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Author: Zhou, Xi
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Languages : en
Pages : 0
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Author: Todd Sarnstrom (II)
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Category : Foreign exchange rates
Languages : en
Pages : 84
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This three-essay dissertation makes contributions to the literature on foreign direct investment (FDI) and its relationship with collateral and the exchange rate. FDI refers to an investment made by a firm to establish or acquire a long-lasting interest in another firm operating outside its home country. Often, FDI involves substantial fixed costs that require the investing firm to seek external financing. Collateral has been identified as an important factor in the external financing of FDI. Firms lacking collateral are constrained in their ability obtain external financing. Exchange rates have also been identified as a factor in FDI. Exchange rate movements may create differences in relative wealth between firms headquartered in different countries. The first essay studies how the value of collateral pledged to externally financed FDI varies with how productive firms are. I develop a theoretical model illustrating that more productive firms are able to pledge a smaller amount of collateral relative to less productive firms. Additionally, firms with a productivity level below a set threshold level need to pledge collateral of greater value than the amount borrowed. Firms facing this situation may opt to instead forego the FDI project. I empirically examine the relationship between pledged collateral and productivity using firm-level data on Japanese FDI into the U.S. between 1980 and 2000. My results support an inverse relationship between productivity and pledged collateral implied by the theoretical model. My results are the strongest for 1991-2000, the period that followed the burst of Japan's asset bubble and subsequent collapse of its banking system, which limited the access Japanese firms had to external financing. The second essay studies the impact a financial shock has on the amount of controlling interest (ownership equity) the investing firm has in the foreign affiliate. In particular, I show how land price shocks in Japan shaped the ownership equity of Japanese foreign affiliates by analyzing impulse response functions for Japanese foreign direct investment into 12 OECD countries from 1975 to 2000. A positive shock to land value increased ownership equity in foreign affiliates belonging to the same 2-digit standard industrial classification as their Japanese parent by approximately 4-8 percentage points. The third essay studies the impact exchange rate movements have on foreign direct investment flows. I use a relatively new empirical technique known as global vector autoregression (GVAR) to model the interactions between the real exchange rate and U.S. outward FDI. My results indicate evidence of a statistical relationship between U.S. FDI outflow and exchange rate movements. However, the actual size of the effect on U.S. FDI outflow is very small; amounting to much less than 1% of overall FDI received by host countries in the study for recent years. I conclude that exchange rates did not have an economically meaningful impact on U.S. FDI outflows during this period.
Author: Agim Kukeli
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Category : Investments, Foreign
Languages : en
Pages : 314
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Author: Saima Kamran Pathan
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Languages : en
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