FDI

This paper aims to identify key challenges facing Iran and South Korea in their bilateral trade and investment relations. In particular, it is concerned with the policy implications which can be useful for policy makers and business people of both countries. For this purpose, we review and analyze the recent developments of the Iranian economy and bilateral trade and investment relations between Iran and Korea as well. Then, we discuss how the impact of the recent economic sanction imposed on Iran has affected the economy and the economic relations between Iran and Korea. Finally, this paper identifies the pattern of revealed comparative advantage (RCA) at the 2 digit sector level of the Harmonized System of classification. The analysis shows no similarities in the structure of comparative advantage for Iran and Korea. After identifying some key challenges, we discuss how both sides can overcome the obstacles to boost the mutually beneficial trade and investment.      JEL Classification: F11, F14    

The paper focuses on regional trade agreements and economic co-operation and develops a new appropriate approach to study their impact on growth and trade. The approach is based on an endogenous trade-growth theory and novelly specified in an economic integration (expenditure) framework which is the conceptual foundation of regional trade agreements. Importantly, it also appropriately takes into account major add- and sub-factors as recommended by Johansen, the computable general equilibrium pioneer, in practical economic planning and policy modelling. Applications of the approach to China, a key member of the Regional Comprehensive Economic Partnership agreement group, are also reported to provide useful insights for suitable evidence-based impact analysis. The analysis has relevance to such trading blocs as BRICS and the 21-member Indian Ocean Rim Association where Iran is a key member. Policy implications from the findings are then briefly discussed.

The literature on Foreign Direct Investment (FDI) has advanced several explanations of the links between financial market developments and FDI inflows across developing as well as developed countries. Empirical literature show that financial market development reduces informational frictions and improves resource allocation more efficiently. Also, financial systems are important for both productivity and development, where a better developed financial systems can receive more benefit from FDI and its inflows depend on condition of host country and their characteristics. The paper tries to examine and compare the relationship between foreign direct investment and local financial market development across oil exporting and importing emerging market economies by using VAR panel model during 1970-2014. The results show that there is a relationship between financial market development and FDI and financial development indicators are causality for FDI, particularly banking system indicators. Moreover, banking system is more important and efficient in oil importing countries than oil exporting countries to attract FDI from abroad. JEL Classification: F21, P45, O16, G1.

Foreign Direct Investment (FDI) is frequently regarded as a key driver of global economic integration because it brings job opportunities, capital investment, and business experience. The current study examines the impact of foreign direct investment on Afghanistan's economic growth using time-series data from 2007 to 2019, which are collected from the World Bank and the International Monetary Fund's annual macroeconomic data sources for the country. Foreign direct investment (FDI), trade (Trd), inflation (InfR), and real interest rate (Int) are independent variables for regressing on this country's gross domestic product (GDP), while "GDP" is as a dependent variable. The method of ordinary least squares (OLS) was utilized to investigate the impact of these variables on Afghanistan's economic growth. For unit root test, the Augmented Dickey-Fuller (ADF) one was utilized, while co-integration, Granger causality, and the Vector Error Correction Model (VECM) were all used to capture two-way linkages between variables and were shown to hold in the long run. Our findings indicate that foreign direct investment and trade have a negative and significant impact on Afghanistan's economic performance in the short run but that all variables except inflation have a positive and significant impact on economic growth in the long run. According to the study, a rigorous policy mix is required to absorb "FDI" while supporting infant industries and reducing Afghanistan's balance of payments deficit for growth and future development.