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Article
Publication date: 11 April 2024

Kamal Upadhyaya and Bruno Barreto de Góes

This paper aims to study the impact of economic freedom and some key macroeconomic variables on the foreign direct investment (FDI) inflow in Brazil.

Abstract

Purpose

This paper aims to study the impact of economic freedom and some key macroeconomic variables on the foreign direct investment (FDI) inflow in Brazil.

Design/methodology/approach

An econometric model is developed that includes FDI inflow as the dependent variable and macroeconomic variables such as the output, current account balance, the real exchange rate, openness and economic freedom as explanatory variables. Annual time series data from 1995 to 2022 is used. Before carrying out the estimation, the time series properties of the data are diagnosed using unit root tests and cointegration tests. Since the data series were found to be stationary in the first difference form and the variables in the model were cointegrated, an error correction model is developed and estimated.

Findings

The findings demonstrate that the size of the market (gross domestic product), current account balance and the economic freedom index significantly influence FDI inflow to Brazil. Although the signs of openness and the real exchange rate align with theoretical expectations, they do not attain statistical significance.

Originality/value

To the best of the authors’ knowledge, this is the first formal study on the impact of economic freedom on the FDI inflow in Brazil. The finding of this study adds value to the understanding of FDI dynamics in Brazil, highlighting the critical role of economic freedom and market size in attracting foreign investment.

Details

Journal of Financial Economic Policy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-6385

Keywords

Article
Publication date: 11 December 2023

Kamal Upadhyaya, Raja Nag and Demissew Ejara

The purpose of this paper is to study the impact of the 2016 presidential election polls on the stock market.

Abstract

Purpose

The purpose of this paper is to study the impact of the 2016 presidential election polls on the stock market.

Design/methodology/approach

The empirical model includes daily stock returns as the dependent variable and past asset prices, 10-year treasury rates, opinion polls and VIX (market uncertainty) as explanatory variables with a one-year lag. The model was estimated using two sets of daily polling data: from July 1, 2015, to November 8, 2016, and from June 1, 2016, to November 8, 2016. Additional descriptive statistics, such as means and standard deviations, were also calculated.

Findings

The estimated results did not reveal any statistically significant effects of opinion polls in favor of one candidate over another on stock returns. Simple statistical tests, however, show that the market performed better when Trump held a polling advantage over Clinton.

Originality/value

To the best of the authors’ knowledge, this is the only study that has examined the effects of the 2016 presidential election polls on the US stock market. This study adds value to the understanding of the relationship between election polls and the stock market in the USA.

Details

Journal of Financial Economic Policy, vol. 16 no. 2
Type: Research Article
ISSN: 1757-6385

Keywords

Content available
Article
Publication date: 16 May 2023

Franklin G. Mixon

30898

Abstract

Details

Journal of Financial Economic Policy, vol. 15 no. 3
Type: Research Article
ISSN: 1757-6385

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