Impacts of International Capital Flow on Host Countries - Differentiating the Impacts of FDI with Portfolio Investment
Author(s)
Yao HONGXING , Philip Agyei PEPRAH , Geraude Fortune M. KOUNDE ,
Download Full PDF Pages: 26-34 | Views: 1051 | Downloads: 260 | DOI: 10.5281/zenodo.3496617
Abstract
One of the major aspects of movement towards economic globalisation or integration through the world economy is international capital flows. The extraordinary surge in global capital flows in the recent few years and the resulting fluctuations in the ‘globalised markets’ have encouraged scholars’ interest to inspect both hypothetically and empirically the impelling factors and implications of international capital structure. FDI and portfolio investment have long been reflected as sovereign forms of foreign capital flow. This paper has analysed the impacts of FDI on portfolio investments and benefits FDI can have on host countries. This paper has further discussed the major features of FDI and portfolio investment in terms of its profitability and volatility
Keywords
FDI, portfolio investment, host country, host countries, capital flow
References
i. Agosin, M. & Huaita, F., 2010. Capital flows to emerging economies: Minsky in the tropics. Cambridge journal of economics, 35(4), pp. 663-683.
ii. Albulescu, C. T., 2015. Do ForeigDirect and Portfolio Investments Affect Long-Term Economic Growth in Central and Eastern Europe?. Procedia Economics and Finance, Volume 23, pp. 507-512.
iii. Alfaro, L., Chanda, A., Kalemli-Ozcan, S. & Sayek, S., 2010. Does foreign direct investment promote growth? Exploring the role of financial markets on linkages. Journal of Development Economics, 91(2), pp. 242-256.
iv. Ali, M., Cantner, U. & Roy, I., 2016. Knowledge spillovers through FDI and trade: the moderating role of quality-adjusted human capital. Journal of Evolutionary Economics, 26(4), pp. 837-868.
v. Almfraji, M. & Almsafir, M., 2014. Foreign direct investment and economic growth literature review from 1994 to 2012. Procedia-Social and Behavioral Sciences, Volume 129, pp. 206-213.
vi. Amanor, K., 2012. Global resource grabs, agribusiness concentration and the smallholder: two West African case studies. The Journal of Peasant Studies, 39(3-4), pp. 731-749.
vii. Azman-Saini, W., Baharumshah, A. & Law, S. .., 2010. Foreign direct investment, economic freedom and economic growth: International evidence. Economic Modelling, 27(5), pp. 1079-1089.
viii. Bilgili, F., Tülüce, N. & Doğan, İ., 2012. The determinants of FDI in Turkey: A Markov regime-switching approach. Economic Modelling, 29(4), pp. 1161-1169.
ix. Borio, C. & Disyatat, P., 2010. Global imbalances and the financial crisis: Reassessing the role of international finance. Asian Economic Policy Review, 5(2), pp. 198-216.
x. Calderón, C. & Kubota, M., 2019. Ride the Wild Surf: An investigation of the drivers of surges in capital inflows. Journal of International Money and Finance, Volume 92, pp. 112-136.
xi. Choong, C., Baharumshah, A., Yusop, Z. & Habibullah, M., 2010. Private capital flows, stock market and economic growth in developed and developing countries: A comparative analysis. Japan and the World Economy, 22(2), pp. 107-117.
xii. Dunning, J. & Dilyard, J., 1999. Towards a general paradigm of foreign direct and foreign portfolio investment. Transnational corporations, 8(1), pp. 1-52.
xiii. Faeth, I., 2009. Determinants of foreign direct investment–a tale of nine theoretical models. Journal of Economic surveys, 23(1), pp. 165-196.
xiv. Fagan, D., 2010. The US regulatory and institutional framework for FDI. Investing in the United States: Is the US Ready for FDI from China, 2(1), pp. 45-84.
xv. Globerman, S. & Shapiro, D., 2009. Economic and strategic considerations surrounding Chinese FDI in the United States. Asia Pacific Journal of Management, 26(1), pp. 163-183.
xvi. Gourinchas, P. & Jeanne, O., 2013. Capital flows to developing countries: The allocation puzzle. Review of Economic Studies, 80(4), pp. 1484-1515.
xvii. Humanicki, M., Olszewski, K. & Kelm, R., 2017. Foreign Direct Portfolio Investment in the Contemporary Globalized World: Should They Be Still Treated Separately?. Central European Journal of Economic Modelling and Econometrics, Volume 9, pp. 115-135.
xviii. Hymer, S., 1976. The Internattional Operations of National Firms: A Study of Direct Investment. Cambridge: MIT Press.
xix. Iamsiraroj, S. & Ulubaşoğlu, M., 2015. Foreign direct investment and economic growth: A real relationship or wishful thinking?. Economic Modelling, Volume 51, pp. 200-213.
xx. IMF, 2014. Global Financial Stability Report: Moving from liquidity- to growth-driven markets, Washington: IMF.
xxi. Javorcik, B., Özden, Ç., Spatareanu, M. & Neagu, C., 2011. Migrant networks and foreign direct investment. Journal of Development Economics, 94(2), pp. 231-241.
xxii. Kanu, S., 2015. Foreign capital inflows and economic growth in Sub-Saharan Africa: a study of selected countries. Research Journal of Finance and Accounting, 6(1), pp. 52-64.
xxiii. Kearney, C., 2012. Emerging markets research: Trends, issues and future directions. Emerging Markets Review, 13(2), pp. 159-183.
xxiv. Kose, M., Prasad, E., Rogoff, K. & Wei, S., 2009. Financial globalization: A reappraisal.. IMF Staff papers, 56(1), pp. 8-62.
xxv. Kudrle, R., 1991. Good for the gander? Foreign direct investment in the United States. International Organization, 45(3), pp. 369-424.
xxvi. Lane, P., 2015. Cross-border financial linkages: Identifying and measuring vulnerabilities. CEPR Policy Insight, 77(6), pp. 58-68.
xxvii. Lu, J., Liu, X. & Wright, M., 2014. International experience and FDI location choices of Chinese firms: The moderating effects of home country government support and host country institutions.. Journal of International Business Studies, 45(4), pp. 428-449.
xxviii. Macdougall, G., 1958. The Benefits and Costs of Private Foreign Investment Abroad: A theoretical approach. Economic Record, Volume XXXVI, pp. 13-35.
xxix. Mallett, R., Hagen-Zanker, J., Slater, R. & Duvendack, M., 2012. The benefits and challenges of using systematic reviews in international development research. Journal of development effectiveness, 4(3), pp. 445-455.
xxx. Mendoza, E. & Quadrini, V., 2010. Financial globalization, financial crises and contagion. Journal of monetary economics, 57(1), pp. 24-39.
xxxi. Milesi-Ferretti, G. & Tille, C., 2011. The great retrenchment: international capital flows during the global financial crisis. Economic policy, 26(66), pp. 289-346.
xxxii. Neumann, R., Penl, R. & Tanku, A., 2009. Volatility of capital flows and financial liberalization: Do specific flows respond differently?. International review of economics & finance, 18(3), pp. 488-501.
xxxiii. Neuman, W. L. & Robson, K., 2014. Basics of social research. Toronto: Pearson Canada.
xxxiv. OECD, 2018. Findings of the recent literature on international capital flows: implications and suggestions for further research, UK: Economics Department.
xxxv. Pillai, K. R. & Rao, M. S., 2013. Determinants of inward FDI to India: A factor analysis of panel data. Journal of contemporary management research, 7(1), pp. 1-16.
xxxvi. Popescu, G., 2014. FDI and economic growth in Central and Eastern Europe.. Sustainability, 6(11), pp. 8149-8163.
xxxvii. Spiegel, M., 2009. Monetary and financial integration: Evidence from the EMU. Journal of the Japanese and International Economies, 23(2), pp. 114-130.
xxxviii. Tang, D., 2015. Has the Foreign Direct Investment Boosted Economic Growth in the European Union Countries?. Journal of International and Global Economic Studies, 8(1), pp. 21-50.
xxxix. Trading Economics, 2018. United States Net Treasury International Capital Flows. [Online]
Available at: https://tradingeconomics.com/united-states/capital-flows
[Accessed 05 Mar 2019].
xl. Wilson, J., 2015. Understanding resource nationalism: economic dynamics and political institutions. Contemporary Politics, 21(4), pp. 399-416.
Cite this Article: