Abdel Aal Mahmoud, Ashraf (2010): FDI and Local Financial Market Development:A Granger Causality Test Using Panel Data.
Download (706kB) | Preview
This paper reports the findings of Granger causality tests on the relationship between foreign direct investment (henceforth, FDI) and local financial market development across 62 countries from 1996 to 2007. In this paper we explore whether local financial market development is important in catalyzing the flow of foreign direct investment. findings results are robust to different measures of financial market development. Furthermore, the results indicate that most of the causal links are found in Non OECD, Low income and Lower middle Income countries.
|Item Type:||MPRA Paper|
|Original Title:||FDI and Local Financial Market Development:A Granger Causality Test Using Panel Data|
|English Title:||FDI and Local Financial Market Development:A Granger Causality Test Using Panel Data|
|Keywords:||FDI; Financial market, Capital markets; Credit markets;|
|Subjects:||P - Economic Systems > P4 - Other Economic Systems > P45 - International Trade, Finance, Investment, and Aid
G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements
G - Financial Economics > G1 - General Financial Markets > G10 - General
|Depositing User:||Abdelaal mahmoud|
|Date Deposited:||30. Aug 2010 00:40|
|Last Modified:||22. Feb 2015 11:29|
Ashraf Abdelaal Mahmoud (2010) “FDI, local Financial Markets, employment and poverty alleviation” the Seventh Annual JIBS/AIB Paper Development Workshop (PDW) in Rio de Janeiro, Brazil on Saturday, June 26, 2010
Alfaro, L. and A. Charlton (2007:20), ‘Growth and the Quality of Foreign Direct Investment: Is All FDI Equal?’, Harvard Business School Working Paper 07-072.
Alfaro L, Chanda A, Kalemli-Ozcan S, Sayek S (2004:372) FDI and economic growth: the role of local financial markets. Journal of international Economics 64:89–112
Bagehot, W.  1962 Lombard Street: a Description of the Money Market (with a New Introduction by Frank C. Genovese), Homewood, Ill. Richard Irwin.
Beck, T., Levine, R., and N. Loyaza (2000:1281) Finance and the Sources of Growth. Journal of Financial Economics 58, 261–300.
Carkovic, M., Levine, R., (2003:387). Does Foreign Direct Investment Accelerate Economic Growth? University of Minnesota, Working Paper.
Chuhan, Punam & Perez-Quiros, Gabriel & Popper, Helen, (1996:81). "International capital flows : do short-term investment and direct investment differ?," Policy Research Working Paper Series 1669, The World Bank
Chee-Keong Choong & Zulkornain Yusop & Siew-Choo Soo, (2005:5). "Foreign Direct Investment And Economic Growth In Malaysia: The Role Of Domestic Financial Sector," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 50(02), pages 245-268
De Mello, M. (1996:25) “Foreign Direct Investment, International Knowledge Transfers and Endogenous Growth: Time Series Evidence” Mimeo. Department of Economics, University of Kent, Kent.
De Mello L. R. (1999:393). Foreign direct investment-led growth: evidence from time series and panel data., Oxford Economic Papers, No. 51, pp. 133-151.
Dollar, David, and Aart Kraay (2001:2102). ‘Growth is Good for the Poor’. Washington DC: World Bank, Development Research Group
Durham, J. B. (2004:122) Absorptive Capacity and the Effects of Foreign Direct Investment and Equity Foreign Portfolio Investment on Economic Growth. European Economic Review. 48, 285–306.
Erdil, E. and Yetkiner, I.H. (2008:1), “The Granger-causality between health care expenditure and output: a panel data approach”, Applied Economics, first published on 23 June 2008.
Fisher, R.A., (1932: ). Statistical Methods for Research Workers, 4th Edition. Oliver & Boyd, Edinburgh.
Greenwood J, Jovanovic B (1990:1346) Financial development, growth, and the distribution of income. Journal of Political Economy 98:1076–1107
Hermes, Niels and Lensink, Robert(2003:129) 'Foreign direct investment, financial development and economic growth', Journal of Development Studies,40:1,142 — 163
Hurlin C, Venet B. (2001:77). Granger causality tests in panel data models with fixed coefficients. Working Paper. EURIsCO, Universit´e Paris IX Dauphin.
James Ang,( 2009:6). "Financial development and the FDI-growth nexus: the Malaysian experience," Applied Economics, Taylor and Francis Journals, vol. 41(13), pages 1595-1601
King RG, Levine R (1993b:1153) Finance, entrepreneurship, and growth: theory and evidence. Journal of Monetary Economics. 32:513–542
Kyung So Im, M. Hashem Pesaran, Yongcheol Shin, Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics, 2003, 115, 53-74. Earlier version available as unpublished Working Paper, Dept. of Applied Economics, University of Cambridge, Dec 1997, (http://www.econ.cam.ac.uk/faculty/pesaran/lm.pdf)
Miyamoto, K. (2003:48). Human capital formation and foreign direct investment in developing countries. Technical Paper No. 211, OECD, Paris.
Omran M. & Bolbol A. (2003:10) . Foreign Direct Investment, Financial Development, and Economic Growth: Evidence from the Arab Countries Review of Middle East Economics and Finance, Vol. 1, No. 3, pp. 231-249
Rebecca M. Neumann, a, , Ron Penla and Altin Tankua (2009:7) . Volatility 27of capital flows and financial liberalization: Do specific flows respond differently? International Review of Economics & Finance Volume 18, Issue 3, June 2009, Pages 488-501
Robert Hoffmann & Chew-Ging Lee & Bala Ramasamy & Matthew Yeung, (2005:19). "FDI and pollution: a granger causality test using panel data," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(3), pages 311-317.
Zhang, K.H. (2001:129), Does foreign direct investment promote economic growth? Evidence from East Asia and Latin America ,journal Contemporary Economic Policy, 19(2), 175-185
Zhang, K., and Markusen, J. (1999:163). Vertical multinationals and host-country characteristics. Journal of Development Economics,59, 233-25