Causality between Foreign Direct Investment Outflows and Economic Fragility: A Study on Eight Fragile Economies

Yıl 2023, , 74 - 88, 29.10.2023

Abdulkadir Sezai Emeç , Ahmet Koluman

https://doi.org/10.25204/iktisad.1344155

Öz

The aim of this study is to investigate the causality relationship between FDI outflows and economic fragility indicators in eight fragile economies (Argentina, Brazil, China, Colombia, India, South Africa, Thailand, Turkey). The data set of the study, which covers the period 1995-2021, consists of FDI outflows and economic fragility indicators; consumer price index, central government debt/GDP, total reserves/foreign debt, M2/GDP, current account balance/GDP, domestic private sector loans provided by banks/GDP and total debt/exports. According to the results of the bootstrap panel causality analysis developed by Kónya (2006), the causality relationship between the variables representing economic fragility and FDI outflows is highest in Thailand and lowest in China. The results show that there is no strong consensus on the direction of the causal relationship between economic fragility indicators and FDI outflows. Based on the findings of the study, it is recommended that each country should develop policies in line with its own internal dynamics.

Anahtar Kelimeler

Foreign direct investments, economic fragility, Kónya causality test

Doğrudan Yabancı Yatırım Çıkışları ile Ekonomik Kırılganlık Arasında Nedensellik: Sekiz Kırılgan Ekonomi Üzerine İnceleme

Öz

Bu çalışmanın amacı, kırılgan sekiz ekonominin (Arjantin, Brezilya, Çin, Kolombiya, Hindistan, Güney Afrika, Tayland, Türkiye) doğrudan yabancı yatırım çıkışları ile ekonomik kırılganlık göstergeleri arasındaki nedensellik ilişkisini araştırmaktır. 1995-2021 dönemini kapsayan çalışmanın veri seti, doğrudan yabancı yatırım çıkışları ile ekonomik kırılganlık göstergesi olarak belirlenen; tüketici fiyat endeksi, merkezi hükümet borçları/gayrisafi yurt içi hâsıla, toplam rezerv/dış borç, M2/gayrisafi yurt içi hâsıla, cari işlemler dengesi/ gayrisafi yurt içi hâsıla, bankalar tarafından sağlanan yurtiçi özel sektör kredileri/ gayrisafi yurt içi hâsıla ve toplam borç/ihracat değişkenlerinden oluşmaktadır. Kónya (2006) tarafından geliştirilen bootstrap panel nedensellik analizi sonuçlarına göre; ekonomik kırılganlığı temsil eden değişkenler ile doğrudan yabancı yatırım çıkışları arasında nedensellik ilişkisi en çok Tayland’da, en az Çin’de görülmektedir. Araştırma sonuçları, ekonomik kırılganlık göstergeleri ile doğrudan yabancı yatırım çıkışları arasındaki nedensel ilişkinin yönü konusunda güçlü bir fikir birliği olmadığını göstermektedir. Çalışmanın bulgularına dayanarak her ülkenin kendi iç dinamiklerine uygun politika geliştirmesi önerilmektedir.

Anahtar Kelimeler

Doğrudan yabancı yatırımlar, ekonomik kırılganlık, Kónya nedensellik testi.

Kaynakça

• Afonso, A. ve Rault, C. (2009). Bootstrap panel granger causality between government budget and external deficits for the EU. CESIFO Working Paper No. 2581. http://hdl.handle.net/10400.5/25655
• Al-Sadig, A. (2013). The effects of foreign direct investment on private domestic investment: evidence from developing countries. Empirical Economics, 44(3), 1267-1275. https://link.springer.com/article/10.1007/s00181-012-0569-1
• Amal, M., Raboch, H. ve Tomio, B. T. (2009). Strategies and determinants of foreign direct investment (FDI) from developing countries: Case study of Latin America. Latin American Business Review, 10(2-3), 73-94. https://doi.org/10.1080/10978520903212532
• Baltagi, B. (2005). Econometric analysis of panel data. (Third Edition). John Wiley ve Sons.
• Bennett, P. D. ve Green, R. T. (1972). Political instability as a determinant of direct foreign investment in marketing. Journal of Marketing Research, 9(2), 182-186. https://doi.org/10.1177/002224377200900210
• Breusch, T. ve Pagan, A. (1980). The LM test and its application to model specification in econometrics. Review of Economic Studies 47, 239–254. https://doi.org/10.2307/2297111
• Buckley, P.J., Clegg, L.J., Cross, A.R., Liu, X., Voss, H. ve Zheng, P. (2007). The determinants of Chinese outward foreign direct investment. Journal of International Business Studies, 38(4), 499-518. http://dx.doi.org/10.1057/palgrave.jibs.8400277
• Calvo, G. A., Leiderman, L. ve Reinhart, C. M. (1996). Inflows of capital to developing countries in the 1990s. Journal of economic perspectives, 10(2), 123-139. https://www.aeaweb.org/articles?id=10.1257/jep.10.2.123
• Chen, J. E. ve Zulkifli, S. A. M. (2012). Malaysian outward FDI and economic growth. Procedia-Social and Behavioral Sciences, 65, 717-722. https://doi.org/10.1016/j.sbspro.2012.11.189
• Chen, J. E., Chin, L., Law, S. H. ve Azman-Saini, W. N. W. (2016). Outward FDI and institutional factors: Malaysian experience. Journal of Emerging Economies and Islamic Research, 4(3), 37-48. https://doi.org/10.24191/jeeir.v4i3.9095
• Chudik A. ve Pesaran M. H. (2015). Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors. Journal of Econometrics 188(2), 393-420. https://doi.org/10.1016/j.jeconom.2015.03.007
• De Mello, L. (1997). FDI in developing countries and growth: A selective survey. Journal of Development Studies, 34(1), 1-34. https://doi.org/10.1080/00220389708422501
• De Paula, L. F. R. ve Alves Jr, A. J. (2000). External financial fragility and the 1998-1999 Brazilian currency crisis. Journal of Post Keynesian Economics, 22(4), 589-617. https://doi.org/10.1080/01603477.2000.11490261
• Dolzer, R. (2004). The impact of international investment treaties on domestic administrative law. NYUJ Int'l. L. ve Pol., 37, 953. https://iilj.org/wp-content/uploads/2016/08/Dolzer-The-Impact-of-International-Investment-Treaties-on-Domestic-Administrative-Law-2005.pdf
• Elbadawi, I., Soto, R. ve Martinez, I. (2019). Exports, exchange regimes, and fragility. Pontificia Universidad Católica de Chile. https://www.economia.uc.cl/docs/doctra/dt-526.pdf
• FED (2014). Monetary Policy Report: February 2014 http://www.federalreserve.gov/monetarypolicy/files/20140211_mprfullreport.pdf
• Gondim, I. J. C., Morandier, N., Dias, I. R. R., Couto, C. A. P. ve Charotta, T. C. A. (2017). Analysis of domestic factors affecting outward foreign direct investment in Brazil. Latin American Business Review, 18(1), 1-18. https://doi.org/10.1080/10978526.2016.1251821
• Granger, C. W. J. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37, 424-438. https://doi.org/10.2307/1912791
• Hellenier, E. (2009). Contemporary reform of global financial governance: Implications of and lessons from the past. CIGI Chair in International Governance, Balsillie School of International Affairs, University of Waterloo, Canada, G-24 Discussion Paper, No.55. http://www.unctad.org/en/docs/gdsmdpg2420092_en.pdf
• Heriqbaldi, U. ve Mufiidah, N. D. (2023). The determinants of China’s outward foreign direct investment in ASEAN: A panel ARDL approach. Journal of Accounting and Investment, 24(3), 697-714. https://journal.umy.ac.id/index.php/ai/article/view/18256
• Humanicki, M., Kelm, R. ve Olszewski, K. (2013). Foreign direct investment and foreign portfolio investment in the contemporary globalized world: should they be still treated separately?. National Bank of Poland Working Paper, 167. https://dx.doi.org/10.2139/ssrn.2369231
• Im, K. S., Pesaran, M. H. ve Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of econometrics, 115(1), 53-74. https://doi.org/10.1016/S0304-4076(03)00092-7
• Intriligator, M. D. (2004). Globalization of the world economy: Potential benefits and costs and a net assessment. J Policy Model, 26, 485–498. https://doi.org/10.1016/j.jpolmod.2004.04.004
• İnal, V., Addi, H. M., Çakmak, E. E., Torusdağ, M. ve Çalışkan, M. (2022). The nexus between renewable energy, CO2 emissions, and economic growth: Empirical evidence from African oil-producing countries. Energy Reports, 8, 1634-1643. https://doi.org/10.1016/j.egyr.2021.12.051
• Kai, Y. J., Kueh, J., Wei, Y. S., Yau, J. ve Liwan, A. (2019). Determinants of foreign direct ınvestment outflow of Malaysia: Vector error correction model. International Journal of Academic Research in Business and Social Sciences, 9(11), 144-158. http://dx.doi.org/10.6007/IJARBSS/v9-i11/6538
• Kaplan, F. ve Aktas, A. R. (2015). A causality analysis of tourism revenues and economic growth on selected Mediterranean countries, Actual Problems of Economics, 3(165), 33-42. https://dx.doi.org/10.2139/ssrn.2586834
• Kar, M., Nazlıoğlu, Ş. ve Ağır, H. (2011). Financial development and economic growth nexus in the MENA countries: Bootstrap panel granger causality analysis. Economic modelling, 28(1-2), 685-693. https://doi.org/10.1016/j.econmod.2010.05.015
• Kardaşlar, A. (2022). Gelişmekte olan ülkeler için doğrudan yabancı sermaye yatırımlarının belirleyicileri. Ömer Halisdemir Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 15(4), 1023-1040. https://doi.org/10.25287/ohuiibf.1152283
• Kónya, L. (2006). Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Economic Modelling, 23, 978–992. https://doi.org/10.1016/j.econmod.2006.04.008
• Kutbay, H. (2020). Vergi teşviki uygulamasının yatırım çıkışları üzerindeki etkisi: Gelişmekte olan ülkeler için panel veri analiz. Finans Ekonomi ve Sosyal Araştırmalar Dergisi, 5(2), 245-253. https://doi.org/10.29106/fesa.715177
• Lee, C., Lee, C. G. ve Yeo, M. (2016). Determinants of Singapore's outward FDI. Journal of Southeast Asian Economies, ISEAS Economics Working, Paper No. 2016-2. https://www.jstor.org/stable/44132426
• Liu, H. H. ve Dejphanomporn, P. (2022). Main determinants influencing inward and outward foreign direct investments in Thailand: comparisons and vital implications. Advances in Management and Applied Economics, 12(1), 1-25. https://doi.org/10.47260/amae/1211
• Masron, T. A. (2017). Relative institutional quality and FDI inflows in ASEAN countries. Journal of Economic Studies, 44(1), 115-137. https://doi.org/10.1108/JES-04-2015-0067
• Nayyar, R. ve Mukherjee, J. (2020). Home country impact on outward FDI from India. Journal of Policy Modeling, 42(2), 385-400. https://doi.org/10.1016/j.jpolmod.2019.06.006
• Ocampo, J. A. (2008). A broad view of macroeconomic stability. The Washington consensus reconsidered, 63-94. http://www.un.org/esa/desa/papers/2005/wp1_2005.pdf
• OECD (2016). States of Fragility 2016: Understanding violence, OECD Publishing. https://doi.org/10.1787/9789264267213-en
• Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels. IZA Discussion Paper 1240, Institute for the Study of Labor. http://dx.doi.org/10.2139/ssrn.572504
• Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312. https://doi.org/10.1002/jae.951
• Pesaran, M. H. ve Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142, 50–93. https://doi.org/10.1016/j.jeconom.2007.05.010
• Pesaran, M. H., Ullah, A. ve Yamagata, T. (2008). A bias‐adjusted LM test of error cross‐section independence. The econometrics journal, 11(1), 105-127. https://doi.org/10.1111/j.1368-423X.2007.00227.x
• Seth, A. ve Ragab, A. (2012). Macroeconomic vulnerability in developing countries: Approachs and issues. International Policy Centre for Inclusive Growth Working Paper, 94: 1-20. https://www.econstor.eu/bitstream/10419/71809/1/72073648X.pdf
• Seyidoğlu, H. (2015). Uluslararası iktisat: Teori, politika ve uygulama, Geliştirilmiş 20. Baskı, Güzem Can Yayınları. Swamy, P. A. V. B. (1970). Efficient inference in a random coefficient regression model. Econometrica, 38, 311–323. https://www.jstor.org/stable/1913012
• Zhang, X. ve Daly, K. (2011). The determinants of China's outward foreign direct investment. Emerging markets review, 12(4), 389-398. https://doi.org/10.1016/j.ememar.2011.06.001