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Determinant Effects of Country Risk Factors on Foreign Direct Investments

Year 2017, Volume: 17 Issue: 2, 179 - 189, 01.05.2017

Nilüfer Kaya Kanlı Osman Aydoğuş

Abstract

Foreign investors consider the legal, political and economic risks of the countries while they are taking investment decisions. Because, they cannot leave the country immediately if a crisis outbreaks or another unfavorable development affecting the investment conditions of the country occurs. Therefore, foreign investors undertake the potential risks of a country when they invest in that country. For that reason, the risk level of a country and foreign direct investment (FDI) inflow to that country are expected to have a negative relationship In this study, this expectation is analyzed empirically
and it is investigated that whether the country risk factors have a negative effect on FDI inflows or not. Also, it is examined that how the effects of risk factors on FDI inflow vary according to the countries’ level of development. Panel regression analyses were implemented by grouping countries according to their development levels. Results show that country risk factors, represented by credit ratings and risk premium, have a significant positive effect on foreign direct investment for developing countries. For developed countries this effect is insignificant. Therefore, for developing countries, an important component of foreign direct investment policy should be ensuring macroeconomic and political stability

Keywords

Foreign Direct Investment Developing Countries Panel Data Credit Ratings Risk Premium

References

  • Akdoğan, K. ve Chadwick, M.G. (2012) “CDS-Bono Farkı ve Düzeltme Hareketi”, Türkiye Cumhuriyet Merkez Bankası Ekonomi Notları, Sayı: 2012-01 .
  • Bayar, Y. ve Kılıç, C. (2014) “ Effects of Sovereign Credit Ratings on Foreign Direct Investment Inflows: Evidence from Turkey”, Journal of Applied Finance & Banking, Vol. 4, No. 2, 91-109.
  • Bevan, A.A. ve Estrin, S. (2004) “The Determinants of Foreign Direct Investment into European Transistion Economies”, Journal of Comparative Economics.
  • Braunstein, E. (2000) “Engendering Foreign Direct Investment: Family Structure, Labor Markets and International Capital Mobility”, World Development, 28(7), 1157-1172.
  • Busse, M., ve Hefeker, C. (2007) “Political Risk, Institutions and Foreign Direct Investment”, European Journal of Political Economy 23, 397–415.
  • Chakrabarti, A. (2001) “The Determinants of Foreign Direct Investment: Sensitivity Analyses of CrossCountry Regressions”, KYKLOS, Vol. 54, Fasc. 1, 89–114.
  • Chakrabarti, A. (2003) “A Theory of The Spatial Distribution of Foreign Direct Investment”, International Review of Economics and Finance, 12, 149–169.
  • Emir, M., Uysal, M. ve Doğru, B. (2013) “Ülkenin Risklilik Durumu ile Ülkeye Gelen Doğrudan Yabancı Yatırım Arasındaki İlişki: Türkiye Örneği”, Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 27(2), 79-92.
  • Hartman, D.G. (1981) “Domestic Tax Policy and Foreign Investment: Some Evidence” NBER Working Paper Series, Working Paper No. 784
  • Hartman, D.G. (1982) “Tax Policy and Foreign Direct Investment in the United States” NBER Working Paper Series, Working Paper No.967
  • Jun, J, (1990) “US Tax Policy and Direct Investment Abroad”, Taxation in the Global Economy (55-78), University of Chicago Press
  • Kanlı, İ.B. ve Barlas, Y. (2012) “Kredi Notunun “Yatırım Yapılabilir” Seviyeye Yükselmesi: Öncesi ve Sonrasındaki Eğilimler”, İktisat İşletme Finans, Cilt 27, Sayı 319.
  • Slemrod, J. (1990) “Tax Effects on Foreign Direct Investment in the United States: Evidence from a Cross-Country Comparision”,Taxation in the Global Economy (122-79). University of Chicago Press.
  • Tsai, P. (1994) “Determinants of Foreign Direct Investment and Its Impact on Economic Growth”, Journal of Economic Development, 19, 137–163.
  • Walch, N. ve Wörz, J. (2012) “The Impact of Country Risk Ratings and of the Status of EU Integration on FDI Inflows in CESEE Countries”, Focus on European Economic Integration, Q3. Bloomberg Veritabanı
  • Dünya Bankası Küresel Finansal Gelişmişlik Veritabanı
  • Dünya Bankası Kalkınma Göstergeleri

Ülke Risk Faktörlerinin Doğrudan Yabancı Yatırımlar Üzerindeki Belirleyici Etkisi

Year 2017, Volume: 17 Issue: 2, 179 - 189, 01.05.2017

Nilüfer Kaya Kanlı Osman Aydoğuş

Abstract

Yabancı yatırımcılar, yatırım kararlarını alırken ülkelerin hukuki, politik ve ekonomik risklerini dikkate alırlar. Çünkü bir krizin ya da ülkede yatırım koşullarını etkileyen olumsuzlukların yaşanması durumunda, doğrudan yabancı yatırımcılar ülkeyi hemen terk edemezler. Dolayısıyla, doğrudan yabancı yatırımlar ülkenin risklerini de üstlenirler. Bu nedenle, ülkenin risk seviyesi ile doğrudan yabancı yatırım girişi arasında negatif bir ilişki olması beklenir.Bu çalışmada, söz konusu beklenti ampirik olarak analiz edilmekte, ülke risk faktörlerinin
doğrudan yabancı yatırım girişine etki edip
etmediği incelenmektedir. Ayrıca, bu etkinin ülkelerin gelişmişlik düzeyine göre nasıl farklılaştığı da değerlendirilmektedir. Ülkeler gelişmişlik
düzeylerine göre gruplanarak panel regresyon analizleri yapılmış ve şu sonuçlara ulaşılmıştır. Kredi notu ve risk primi göstergeleri ile temsil edilen ülke
risk düzeyi gelişmekte olan ülkelerde doğrudan yabancı yatırım girişi üzerinde anlamlı ve pozitif bir etkisi yaratırken, gelişmiş ülkelerde bu etki anlamsızdır. Bu nedenle gelişmekte olan ülkeler açısından doğrudan yabancı yatırım çekmeye yönelik politikaların önemli bir bileşeni ülkedeki makroekonomik ve siyasi istikrarın sağlanması olmalıdır.

Keywords

Doğrudan Yabancı Yatırım Gelişmekte Olan Ülkeler Panel Veri Kredi Notu Risk Primi

References

  • Akdoğan, K. ve Chadwick, M.G. (2012) “CDS-Bono Farkı ve Düzeltme Hareketi”, Türkiye Cumhuriyet Merkez Bankası Ekonomi Notları, Sayı: 2012-01 .
  • Bayar, Y. ve Kılıç, C. (2014) “ Effects of Sovereign Credit Ratings on Foreign Direct Investment Inflows: Evidence from Turkey”, Journal of Applied Finance & Banking, Vol. 4, No. 2, 91-109.
  • Bevan, A.A. ve Estrin, S. (2004) “The Determinants of Foreign Direct Investment into European Transistion Economies”, Journal of Comparative Economics.
  • Braunstein, E. (2000) “Engendering Foreign Direct Investment: Family Structure, Labor Markets and International Capital Mobility”, World Development, 28(7), 1157-1172.
  • Busse, M., ve Hefeker, C. (2007) “Political Risk, Institutions and Foreign Direct Investment”, European Journal of Political Economy 23, 397–415.
  • Chakrabarti, A. (2001) “The Determinants of Foreign Direct Investment: Sensitivity Analyses of CrossCountry Regressions”, KYKLOS, Vol. 54, Fasc. 1, 89–114.
  • Chakrabarti, A. (2003) “A Theory of The Spatial Distribution of Foreign Direct Investment”, International Review of Economics and Finance, 12, 149–169.
  • Emir, M., Uysal, M. ve Doğru, B. (2013) “Ülkenin Risklilik Durumu ile Ülkeye Gelen Doğrudan Yabancı Yatırım Arasındaki İlişki: Türkiye Örneği”, Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 27(2), 79-92.
  • Hartman, D.G. (1981) “Domestic Tax Policy and Foreign Investment: Some Evidence” NBER Working Paper Series, Working Paper No. 784
  • Hartman, D.G. (1982) “Tax Policy and Foreign Direct Investment in the United States” NBER Working Paper Series, Working Paper No.967
  • Jun, J, (1990) “US Tax Policy and Direct Investment Abroad”, Taxation in the Global Economy (55-78), University of Chicago Press
  • Kanlı, İ.B. ve Barlas, Y. (2012) “Kredi Notunun “Yatırım Yapılabilir” Seviyeye Yükselmesi: Öncesi ve Sonrasındaki Eğilimler”, İktisat İşletme Finans, Cilt 27, Sayı 319.
  • Slemrod, J. (1990) “Tax Effects on Foreign Direct Investment in the United States: Evidence from a Cross-Country Comparision”,Taxation in the Global Economy (122-79). University of Chicago Press.
  • Tsai, P. (1994) “Determinants of Foreign Direct Investment and Its Impact on Economic Growth”, Journal of Economic Development, 19, 137–163.
  • Walch, N. ve Wörz, J. (2012) “The Impact of Country Risk Ratings and of the Status of EU Integration on FDI Inflows in CESEE Countries”, Focus on European Economic Integration, Q3. Bloomberg Veritabanı
  • Dünya Bankası Küresel Finansal Gelişmişlik Veritabanı
  • Dünya Bankası Kalkınma Göstergeleri
There are 17 citations in total.

Details

Other ID JA59RM57EF
Journal Section Research Article
Authors

Nilüfer Kaya Kanlı This is me

Osman Aydoğuş This is me

Publication Date May 1, 2017
Published in Issue Year 2017 Volume: 17 Issue: 2

Cite

APA Kanlı, N. K., & Aydoğuş, O. (2017). Determinant Effects of Country Risk Factors on Foreign Direct Investments. Ege Academic Review, 17(2), 179-189.
AMA Kanlı NK, Aydoğuş O. Determinant Effects of Country Risk Factors on Foreign Direct Investments. ear. May 2017;17(2):179-189.
Chicago Kanlı, Nilüfer Kaya, and Osman Aydoğuş. “Determinant Effects of Country Risk Factors on Foreign Direct Investments”. Ege Academic Review 17, no. 2 (May 2017): 179-89.
EndNote Kanlı NK, Aydoğuş O (May 1, 2017) Determinant Effects of Country Risk Factors on Foreign Direct Investments. Ege Academic Review 17 2 179–189.
IEEE N. K. Kanlı and O. Aydoğuş, “Determinant Effects of Country Risk Factors on Foreign Direct Investments”, ear, vol. 17, no. 2, pp. 179–189, 2017.
ISNAD Kanlı, Nilüfer Kaya - Aydoğuş, Osman. “Determinant Effects of Country Risk Factors on Foreign Direct Investments”. Ege Academic Review 17/2 (May 2017), 179-189.
JAMA Kanlı NK, Aydoğuş O. Determinant Effects of Country Risk Factors on Foreign Direct Investments. ear. 2017;17:179–189.
MLA Kanlı, Nilüfer Kaya and Osman Aydoğuş. “Determinant Effects of Country Risk Factors on Foreign Direct Investments”. Ege Academic Review, vol. 17, no. 2, 2017, pp. 179-8.
Vancouver Kanlı NK, Aydoğuş O. Determinant Effects of Country Risk Factors on Foreign Direct Investments. ear. 2017;17(2):179-8.
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