Foreign Direct Investment

In this paper, we address the question that does FDI alone affect economic growth or interaction of FDI and human capital is required to boost economic growth. We develop the model with an expanding variety of products. We estimate the model using some advanced tests utilizing data on FDI flows from developed countries. We find stronger complementary effects between FDI and human capital on the productivity growth rate instead of having them as separate variables. This result is consistent with the idea that the flow of advanced technology brought along by FDI can increase the growth rate of the host economy only by interacting with that country's absorptive capability. JEL Classification: F21: O49

This paper investigates the key factors affecting the foreign direct investment (FDI) inflow to deve­­loping countries during the period (1995-2010) with emphasis on the financial development. Financial development, as an important factor in FDI absorption and a prerequisite for utilizing the benefits of FDI, not only increases the FDI inflow in developing countries, but also improve the absorption capacity and ability of these countries to utilize the benefits of FDI. Since the financial system consists of several components and provides a variety of services, various indicators, which represent the development of different aspects and components of financial system, have been applied in order to assess the impact of financial development on the FDI. Results indicate that development of various components of financial system (stock market and banking sector) as well as different aspects of financial development (size and activity level of financial system) all have positive and significant impact on the FDI inflow in developing countries during the studied period.

This paper investigates the key factors affecting the foreign direct investment (FDI) inflow to deve­­loping countries during the period (1995-2010) with emphasis on the financial development. Financial development, as an important factor in FDI absorption and a prerequisite for utilizing the benefits of FDI, not only increases the FDI inflow in developing countries, but also improve the absorption capacity and ability of these countries to utilize the benefits of FDI. Since the financial system consists of several components and provides a variety of services, various indicators, which represent the development of different aspects and components of financial system, have been applied in order to assess the impact of financial development on the FDI. Results indicate that development of various components of financial system (stock market and banking sector) as well as different aspects of financial development (size and activity level of financial system) all have positive and significant impact on the FDI inflow in developing countries during the studied period.

Nowadays, Foreign Capital Inflows (FCIs) are considered as a catalyst for economic development and an important source of transferring technology and foreign exchange earnings from developed to developing countries. The purpose of this paper is to estimate the impact of FCIs (which include foreign direct investment, personal remittances and official development investment) on economic growth in Iran. An Autoregressive Distributed Lag (ARDL) approach is used over the period 1992-2016. The results indicate that all the three of foreign capital inflows have positive and significant impacts on economic growth in the short-run and long-run. However, Foregin Direct Investment (FDI) and Public Relations (PR) have more effects than Official Development Assistant (ODA) on economic growth of Iran. The study suggests the design and implementation of appropriate fiscal, monetary and trade policies to complement the flow of foreign capital inflows to realize of its full impact on growth.

According to the economic literature, foreign direct investment (FDI) has the main role in the growth of countries. Therefore, the main goal of present study is to examine the direct and indirect (spatial) effect of FDI on growth of GDP in different regions of Iran using the spatial econometric model. For this purpose, the data of 30 provinces of Iran during 2010-2018 has been used. The spatial weight matrix (W), is considered based on the contiguity of the regions. The results of model showed that FDI had a positive direct and spillover effects on growth of regions. Also, government spending in the regions, increase of financial credits and human capital had a direct positive effect on economic growth of the region's economy. The spillover effects of two variables, FDI and financial development, was significant. Meanwhile, the spatial (indirect) effect of FDI was positive, but the indirect (spillover) effect of financial development was negative.

The urgent need to provide capital from developing countries and improve the level of technology has made it necessary to attract foreign investment. FDI can respond to this need as an inflow of capital, technology, and technical know-how. The present study investigated the role of FDI attraction determinants through a technology transfer approach comprehensively and coherently. This research was conducted using a quantitative paradigm and a cross-sectional survey among experts. The statistical population consisted of Iranian experts, practitioners, and executives in investment and economics. The convenience sampling method was used to study 310 members of the statistical population. A researcher-made questionnaire was also used for data collection. The validity was determined using experts' views, and its reliability was determined using Cronbach's alpha within a pre-test (n=20). Data were analyzed through the partial least square structural equation modeling (PLS-SEM) method in Smartpls 3 software. The hierarchical component analysis (using two orders of constructs) was used to reduce the complexity of the structural model. The results showed that "international relations and agreements" as a primary variable correlated with FDI attraction, and "bureaucracy and domestic laws" significantly affected FDI attraction. In addition , the results indicate that "sanctions, "economic stability and security," and "workforce" are among the economic components that play a less significant role in FDI attraction.

Foreign direct investment (FDI) as a growth accelerating component has received a great attention in developed countries even in developing and less developed countries during recent years. It has a matter of greater concern for the economists how FDI affects economic growth of the host country economy. In closed economy there is no access to the foreign instruments and savings, this type of economy solely based on the domestic savings and investment sources. But in open economy, the investment comes from both sources either from domestic savings or foreign capital inflows like FDI. FDI enables the host country to achieve the investment level beyond its capacity to improve GDP and economic growth.  FDI encourages the process of economic growth by filling up the saving-investment gap; transferring advanced technology, new entrepreneurship. This study investigates the impact of Foreign Direct Investment on economic growth in 30 Islamic countries. The econometric model is estimated by using Pooled Mean Group (PMG) for dynamic heterogeneous panels over the period 1992-2018.  The results of the study show that FDI inflows have positive and significant effects on economic growth. Of course, the impacts of interaction terms between FDI and human capital; FDI, and trade openness on economic growth are more than each of them separately in the long and short run.  The study suggests that the Islamic governments should design and implement appropriate fiscal, monetary and trade policies to make and improve an enabling environment to attract foreign Capital inflows as a supplementary source of domestic investment.

This study investigates the relationship between Foreign Direct Investment (FDI), political stability, and coal efficiency in Vietnam using time series analysis from 1985 to 2021. Results indicate that political stability positively influences coal efficiency, encouraging investments in cleaner technologies. However, inward FDI exhibits negative impacts on coal efficiency, indicating limited contributions to greener projects. Moreover, a 1% increase in sustainable power generation significantly improves coal efficiency. To enhance coal efficiency, practical policies are needed, including fostering a stable political environment, incentivizing FDI in energy-efficient technologies, collaborating for technology transfer, investing in research and development, and promoting sustainable power generation. These strategies can aid Vietnam in reducing coal reliance and transitioning towards a more sustainable energy landscape.