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Article
Publication date: 1 February 1978

Thomas W. McRae

Companies resident in the United Kingdom suffer from a very tight set of restrictions on exchange control. The rules regarding trading are quite different from those…

Abstract

Companies resident in the United Kingdom suffer from a very tight set of restrictions on exchange control. The rules regarding trading are quite different from those applied to investment. Various types of investment are treated differently. The following paper describes the more important aspects of the UK exchange control regulations, including the rules for remitting foreign profits and the investment currency market. A brief critique of the current regulations is also provided.

Details

Managerial Finance, vol. 4 no. 2
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 24 November 2020

Safi Ullah and Muhammad Tahir

The purpose of this study is to examine the effect of country- and firm-specific factors on foreign investment in Pakistan.

Abstract

Purpose

The purpose of this study is to examine the effect of country- and firm-specific factors on foreign investment in Pakistan.

Design/methodology/approach

This study uses time-series data for country-level determinants and uses panel data for 100 listed non-financial companies selected based on market capitalisation from 2005 to 2015.

Findings

Findings suggest that the stock market returns and liquidity of the country significantly positively influence the foreign portfolio investment (FPI) in Pakistan. Whereas, economic growth surprisingly is negatively related to foreign portfolio investment. In addition, findings reveal that firm size, financial leverage, dividend yield and global depositary receipts (GDR) have a positive impact on the total foreign investment at firm level. Further, foreign institutional investors prefer to invest in those firms that are large, pay high dividends and issue GDR. Furthermore, findings suggest that foreign direct investors tend to invest in firms that are financially leveraged and have low capital gain yield.

Practical implications

At the country level, this study recommends that stock market performance, economic growth and foreign reserves of the country should be maintained and improved to attract FPI. At the firm level, this study recommends issuance of global depositary receipts and high dividend payouts for those firms that are interested in institutional investment in Pakistan.

Originality/value

To the best of authors' knowledge, this study is the first that examines the effect of firm-level factors along with country-level factors on foreign investment in Pakistan.

Details

South Asian Journal of Business Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2398-628X

Keywords

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Book part
Publication date: 27 September 2011

Gohar G. Stepanyan

Purpose – Examine the role of institutional investors in accelerating the development of capital markets and economies abroad, the determinants of their investment, both…

Abstract

Purpose – Examine the role of institutional investors in accelerating the development of capital markets and economies abroad, the determinants of their investment, both in the domestic and foreign markets, and their importance in promoting good corporate governance practices worldwide and facilitating increased financial integration.

Methodology/approach – Review and synthesize recent academic literature (1970–2011) on the process of international financial integration and the role of foreign institutional investors in the increasingly global financial markets.

Findings – Despite the concern that short-term flow of international capital can be destructive to the emerging and developing market economies, academic evidence on a destabilizing effect of foreign investment activity is limited. Institutional investors’ systematic preference for stocks of large, well-known, globally visible foreign firms can explain the presence of a home bias in international portfolio investment.

Research limitations – Given the breadth of the two literature streams, only representative studies (over 45 published works) are summarized.

Social implications – Regulators of emerging markets should first improve domestic institutions, governance, and macroeconomic fundamentals, and then deregulate domestic financial and capital markets to avoid economic and financial crises in the initial stages of liberalization reforms.

Originality/value of paper – A useful source of information for graduate students, academics, and practitioners on the importance of foreign institutional investors.

Details

Institutional Investors in Global Capital Markets
Type: Book
ISBN: 978-1-78052-243-2

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Book part
Publication date: 8 November 2019

Aleksey V. Danilchenko, Elena V. Bertosh, Pavel P. Artsemyeu and Roman D. Osipov

The chapter analyzes the modern features of the movement of foreign investments and the participation of the Republic of Belarus in this process. Trends in foreign direct…

Abstract

The chapter analyzes the modern features of the movement of foreign investments and the participation of the Republic of Belarus in this process. Trends in foreign direct investment (FDI) flows in the context of different countries and the structure of investment capital in our country have been considered. A greater priority in attracting investments in large projects in the form of equity participation compared to debt instruments and profits refinancing has been justified. The largest projects with foreign investments as well as features of outgoing FDI have been considered. The activities of foreign transnational corporations and the factors hindering the internationalization of business activity of domestic enterprises have been studied in detail. The priority areas of government in activities to promote the attraction of FDI to the Republic of Belarus have been analyzed.

Details

Modeling Economic Growth in Contemporary Belarus
Type: Book
ISBN: 978-1-83867-695-7

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Article
Publication date: 17 July 2020

Ashish Gupta, Graeme Newell, Deepak Bajaj and Satya Mandal

Real estate forms an important part of any economy and the investment in real estate, in turn, is impacted by the macroeconomic environment of that country. The purpose of…

Abstract

Purpose

Real estate forms an important part of any economy and the investment in real estate, in turn, is impacted by the macroeconomic environment of that country. The purpose of the present research is to examine macroeconomic determinants of foreign and domestic non-listed real estate fund (NREF) flows and to examine whether they are similar or different for an emerging economy like India.

Design/methodology/approach

The long and short-run cointegration between the time-series variables is estimated using the autoregressive distributed lag (ARDL) bounds test and error correction model (ECM) using quarterly data across the 2005–2017 period. ARDL is a suitable method for short time-series data.

Findings

The empirical results indicate that domestic NREF flows are positively and significantly impacted by real GDP and performance of listed real estate stocks (i.e. BSE realty index). Whereas, foreign NREF flows are positively and significantly impacted by the exchange rate, performance of listed real estate stocks and domestic NREF flows.

Practical implications

The empirical results have significant implications for academicians, policy makers and real estate market practitioners. In the context of these results, some interesting insights are gained that would help in the implementation of the policies aimed toward increasing the fund flows in the real estate sector, which in turn would have a significant trickle-down effect on the Indian economy.

Originality/value

The existing literature looks at macroeconomic and other drivers of foreign investment in international real estate investments. However, there are very few studies on the determinants of domestic real estate investment flows and on determinants of NREFs' investment flows; particularly in emerging markets. The present study, in contrast, evaluates simultaneously the macroeconomic determinants of the domestic and foreign NREFs' investment flows in India. The ARDL and ECM method used has been applied for the first time to the study of NREFs.

Details

Journal of Property Investment & Finance, vol. 38 no. 6
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 7 October 2019

Otuo Serebour Agyemang, Christopher Gbettey, John Gartchie Gatsi and Innocent Senyo Kwasi Acquah

The purpose of this study is to examine the link between country-level corporate governance and foreign direct investment in African economies for the period 2009-2015.

Abstract

Purpose

The purpose of this study is to examine the link between country-level corporate governance and foreign direct investment in African economies for the period 2009-2015.

Design/methodology/approach

The authors use annual panel data of 40 African economies over the period of the study and use the system generalized method of moments (GMM) to establish the relationship between country-level corporate governance and foreign direct investment.

Findings

The authors find that African economies characterized by firms with high ethical values tend to attract a great deal of foreign direct investment. In addition, they highlight that when an economy is associated with effective corporate boards, it tends to attract much foreign direct investment. Further, this study reveals that the level of minority shareholders’ interests’ protection in an economy has a significant positive relationship with foreign direct investment. Finally, they document a negative relationship between effectiveness of regulation of securities and exchanges and foreign direct investment.

Practical implications

It is advised that sound and implementable corporate governance structures devoid of political interferences should be put in place in African economies, if the aim of using foreign direct investment to mitigate poverty by 2015 as part of the Millennium Development Goals is to be attained.

Originality/value

Empiricists have devoted considerable effort to estimate the factors that influence the level of foreign direct investment into African economies without taking into consideration the corporate governance structures in these economies. However, this paper seeks to examine the relationship between country-level corporate governance structures and foreign direct investment in African economies.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 5
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 1 February 1997

Walter W. Jermakowicz and Carl J. Bellas

This paper examines in some detail the magnitude, structure and patterns of foreign direct investment in Central and Eastern Europe between 1988 and 1993. The authors…

Abstract

This paper examines in some detail the magnitude, structure and patterns of foreign direct investment in Central and Eastern Europe between 1988 and 1993. The authors identify and describe three major forms of investment structuring and three operative investment strategies. Data show the actual flows of capital from their source countries to their countries of investment. These data are used to explain the differences in patterns of investment across the CEE. The number and types of foreign direct investments within individual countries are presented and discussed. The paper concludes by assessing the success to date of FDI.

Details

International Journal of Commerce and Management, vol. 7 no. 2
Type: Research Article
ISSN: 1056-9219

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Article
Publication date: 1 May 1992

Alvin G. Wint

Reports on a study that examines, by interviews and archivalresearch, the promotional structures which 11 governments in tencountries have put in place to market their…

Abstract

Reports on a study that examines, by interviews and archival research, the promotional structures which 11 governments in ten countries have put in place to market their economies to foreign investors. Focuses specifically on the various forms through which these governments have conducted their overseas marketing operations. Finds that governments that have been most effective in influencing foreign investors have created overseas offices that “stand alone”, and are unconnected with the governments′ other foreign operations. Also identifies the conditions necessary for a successful overseas investment promotion operation.

Details

International Journal of Public Sector Management, vol. 5 no. 5
Type: Research Article
ISSN: 0951-3558

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Article
Publication date: 29 November 2018

Liu Wang and Shaomin Li

Amid the rising concerns about the unbalanced globalization, there has been a renewed interest in examining the pattern of international trade and investment, especially…

Abstract

Purpose

Amid the rising concerns about the unbalanced globalization, there has been a renewed interest in examining the pattern of international trade and investment, especially between emerging and mature economies. In this study, the purpose of this paper is to examine the role of different institutional and market-related determinants in shaping the pattern and mode of foreign investments in emerging and developed markets.

Design/methodology/approach

The empirical investigation is based on a balanced panel sample of 45 countries (28 developed countries and 17 emerging economies) over an 11-year period from 2002 to 2012. A series of multivariable regressions are conducted to evaluate both the trend and the mode of foreign investment with rigorous robustness checks.

Findings

Overall, the authors find that market openness and capital market development are the main determinants of a country’s ability to attract foreign investment in developed countries, while the governance environment is the key consideration in emerging markets. Regarding the mode of foreign investment, the authors find that, in developed markets, foreign investors tend to choose direct investment in the countries with more open markets. In emerging markets, however, the choice between direct and indirect (portfolio) investments is mainly driven by arbitrage activities, where investors opt for portfolio investment when the stock market is undervalued.

Practical implications

First, the findings may aid foreign investors in their strategic choice between emerging vs mature markets based on the governance environment, market openness, capital market development and arbitrage opportunities. Second, the findings may be used to aid governments in prioritizing institutional improvement in market openness, stock market development and policies aimed at balancing different investment channels.

Social implications

The study may enhance the social understanding on the current debate on the winners and losers of globalization. A main complaint from mature economies is that the emerging economies took their jobs away and, therefore, they should adopt protectionism (which implies closing their own markets) in order to preserve jobs. The study shows that such a reaction may not be in the best interests of the mature economies since they will be able to attract more foreign investment (which implies creating or at least keeping more jobs) if they make their markets more open.

Originality/value

Existing studies on foreign investment have primarily focused on direct investment. The study examines both the direct and indirect investments and the way in which they affect the foreign investment markets in emerging and mature economies. From the institutional perspective, the authors show how the governance environment and market factors affect foreign investors’ strategic choice between direct and indirect investment, contingent upon the stage of a country’s economic and institutional development.

Details

International Journal of Emerging Markets, vol. 13 no. 5
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 26 August 2014

Justice Gameli Djokoto, Francis Yao Srofenyoh and Kobla Gidiglo

– The purpose of this paper is to investigate the effects of foreign direct investment (FDI) into agriculture on domestic investment in agriculture.

Abstract

Purpose

The purpose of this paper is to investigate the effects of foreign direct investment (FDI) into agriculture on domestic investment in agriculture.

Design/methodology/approach

Time series data from 1976 to 2007 was fitted to a derived model.

Findings

Foreign direct investment into agriculture crowd-in domestic investment into agriculture.

Research limitations/implications

A targeted approach that will attract foreign direct investment into agriculture is required as to complement existing efforts at boosting domestic agricultural investment.

Originality/value

Numerous papers investigated the relationship between foreign direct investment and domestic investment at the aggregate national and regional levels. However, the evidence for this relationship has been conflicting. That for agriculture is rare. For Ghana, a developing agrarian economy that has promoted foreign direct investment for some decades now, it is imperative to establish the relationship between foreign direct investments and domestic investment. Also, the estimation was based on a theoretically derived model.

Details

Agricultural Finance Review, vol. 74 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

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