Do Geopolitical Risks and Political Stability Drive Foreign Direct Investments? New Evidence from Dynamic Panel CS-ARDL Model

Öz

In this research, we aim to highlight the impact of geopolitical risks and political stability on investment flows directed towards 10 high-risky countries in the relevant database of Caldara and Icaivello (2018) for the period from 2000 to 2022 with yearly data. On that note, we employed the Durbin-Hausman panel cointegration test to check long run relationship. Then, we estimate co-integration parameters (coefficients) employing the CS-ARDL method to avoid estimation problems that arise from cross-section dependency and slope homogeneity. The results reveal that geopolitical risks have a negative effect on Foreign Direct Investment (FDI) for both the short and long term. The findings also prompt us to conclude that political stability in the host country has a significant impact on inward FDI in the long run. Cross-section dependency and delta tests indicate that geopolitical risk generates heterogeneous effects on host countries. In the last section, robustness checks with alternative estimators and Granger non-causality validate the main results at a conventional confidence level. To this end, policymakers may consider strengthening international institutions and organizations, giving importance to peaceful initiatives, multilateral agreements (commercial or economic), and diplomatic negotiations, as significant policy tools to increase investment inflows by enhancing stability, transparency, and predictability in governance.

Anahtar Kelimeler

• Foreign Direct Investment
• Geopolitical Risks
• Political Stability
• CS-ARDL Model

Jeopolitik Riskler ve Siyasi İstikrar Yabancı Doğrudan Yatırımları Etkiler mi? Dinamik Panel CS-ARDL Modelinden Yeni Kanıtlar

Öz

Bu çalışmada, Caldara and Icaivello (2018) tarafından oluşturulan jeopolitik risk veri tabanındaki en yüksek puana sahip 10 ülke bazında, politik istikrar ve jeopolitik risklerin doğrudan yabancı yatırımlar üzerindeki etkisi 2000-2022 dönemi yıllık verileri ile analiz edilmiştir. Bu bağlamda, uzun dönemli eş bütünleşme ilişkisi Durbin-Hausman testi ile incelenmiştir. Daha sonra yatay kesit bağımlılığı ve homojenite altında bile sağlıklı sonuçlar veren CS-ARDL metodu ile eş bütünleşme katsayıları tahmin edilmiştir. Analiz sonuçlarına göre hem kısa hem de uzun dönemde jeopolitik risklerin doğrudan yabancı yatırımlar üzerinde negatif etkide bulunduğu görülmüştür. Ayrıca politik istikrar da doğrudan yabancı yatırım girişleri üzerinde önemli bir belirleyicidir. Yatay kesit bağımlılığı ve Delta testi, bu etkinin örneklem ülkeler bazında farklı şiddette olduğunu göstermektedir. Son olarak, diğer alternatif tahminciler ve Granger nedensellik testi sonuçları, bulunan sonuçların dirençli olduğunu güven aralıkları içinde teyit etmiştir. Bu bağlamda, politika yapıcılar, doğrudan yabancı yatırım akışlarını teşvik edebilmek için istikrarı, şeffaflığı ve yönetimde öngörülebilirliği artırmayı, uluslararası kurum ve kuruluşları güçlendirmeyi, barış girişimlerine, çok taraflı anlaşmalara (ticari veya ekonomik) ve diplomatik müzakerelere önem vermeyi birer politika aracı olarak değerlendirebilirler.

Anahtar Kelimeler

• Doğrudan Yabancı Yatırımlar
• Jeopolitik Riskler
• Politik İstikrar
• CS-ARDL Modeli

Kaynakça

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