Theoretical and Applied Economics
No. 2 / 2019 (619), Summer
The effects of political and financial risks on foreign direct investments to the MENAT countries
Çanakkale Onsekiz Mart University, Turkey
Abstract. Political risk and financial risk have important effects on many macroeconomic variables in the economy. Among those macroeconomic variables, foreign direct investment is the crucial one. Foreign investors refrain from investing in the countries with high political and financial instability. However, through knowledge and capital accumulation, foreign direct investment (FDI) is expected to lead to higher growth rate in the host country by promoting the incorporation of new production factors and foreign technologies into the production function of the host country. Therefore, in this study the political and financial determinants of FDI inflows to the Middle East and North Africa and Turkey (MENAT countries) are evaluated using annual dataset from the period 1984 to 2014. Using panel data estimations methods, the results reveal that variables of investment profile, religious tensions, and current account balance are the potential determinants of FDI inflows. The analysis also indicates that a positive investment profile, profits repatriation and payment delays, lower religious tensions and lower risk points of current account are associated with higher volumes of FDI flows into the MENAT countries.
Contents
The education and training. Priorities of the European Union
Posted offers in exogenous networks: A theoretical application and experimental results
The role of Japan in the development of emerging markets in Asia. Key lessons learned for China
Empirical examination of the stability of expectations – Augmented Phillips Curve for developing and developed countries
The causality between economic growth and stock market in developing and developed countries: Toda-Yamamoto approach
Government failure vs. Market failure. The implications of incomplete information
Foreign direct investment and total factor productivity in South Asia
The effects of political and financial risks on foreign direct investments to the MENAT countries
Exploring the nexus between macroeconomic variables and stock market returns in Germany: An ARDL Co-integration approach
Income inequalities and economic convergence in CEE countries
Exchange rate regimes and its impact on growth: An empirical analysis of BRICS countries
Dynamics of business cycle and long-term economic growth of Pakistan
Per capita gross domestic product and welfare of Gabonese households: A VAR model with exogenous hypothesis
Co-integration with regime shift between government expenditure and poverty reduction in Algeria
Trade in a two sector endogenous growth model with two accumulating factors
What discriminates the welfare outcomes of children in India. A multiple discriminant analysis in selected states