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1 – 3 of 3Md Badrul Alam, Muhammad Tahir and Norulazidah Omar Ali
This paper makes a novel attempt to estimate the potential impact of credit risk on foreign direct investment (FDI hereafter), thereby focusing on a completely unexplored area in…
Abstract
Purpose
This paper makes a novel attempt to estimate the potential impact of credit risk on foreign direct investment (FDI hereafter), thereby focusing on a completely unexplored area in the existing empirical literature.
Design/methodology/approach
To provide a comprehensive understanding of the relationship between credit risk and FDI inflows, the study incorporates all the eight-member economies of the South Asian Association of Regional Cooperation (SAARC hereafter) and analyzes a panel data set, over the period 2011 to 2019, extracted from the World Development Indicators, using the suitable econometric techniques for the efficient estimations of the specified models.
Findings
The results indicate a negative and statistically significant relationship between the credit risk of the banking sectors and FDI inflows. Similarly, market size and inflation rate appear to be the two other main factors behind the increasing FDI inflows in the SAARC member economies. Interestingly, the size of the market became irrelevant in attracting FDI inflows when the Indian economy is excluded from the sample due to its higher economic weight. On the other hand, FDI inflows are not dependent on the level of trade openness, with most of the specifications showing either an insignificant or negative coefficient of the variable.
Practical implications
The obtained results are unique and robust to alternative methodologies, and hence, the SAARC economies could consider them as the critical inputs in formulating the appropriate policies on FDI inflows.
Originality/value
The findings are unique and original. The authors have established a relationship between credit risk and FDI for the first time in the SAARC context.
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Elyas Abdulahi Mohamued, Muhammad Asif Khan, Natanya Meyer, József Popp and Judit Oláh
This study aims to analyse the efficiency effects of institutional distance on Chinese outward foreign direct investment (FDI) in Africa.
Abstract
Purpose
This study aims to analyse the efficiency effects of institutional distance on Chinese outward foreign direct investment (FDI) in Africa.
Design/methodology/approach
The study utilised the true fixed-effect stochastic frontier analysis (SFA) model. Data from 2003 to 2016 (14 years) were acquired from 42 targeted African countries, which are included in the analysis.
Findings
The results reveal that FDI flow efficiency can be maximised with a high institutional distance between China and African countries. Contrariwise, comparable institutional distance, measured by the rule of law, regulatory quality and government effectiveness between the host and home countries, reflected a significant positive impact for Chinese outward foreign direct investment (OFDIs), indicating Chinese MNEs can invest directly in a country with comparable institutional characteristics.
Originality/value
There have been limited exceptional studies that assessed the effect of institutional distance between emerging countries. However, none of these studies investigated the effect of institutional distance between China and Africa at a national level. Using the advantage of the SFA model, this study assesses the efficiency effects of institutional distance between the host and home country.
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Yot Amornkitvikai, Martin O'Brien and Ruttiya Bhula-or
The development of green manufacturing has become essential to achieve sustainable development and modernize the nation’s manufacturing and production capacity without increasing…
Abstract
Purpose
The development of green manufacturing has become essential to achieve sustainable development and modernize the nation’s manufacturing and production capacity without increasing nonrenewable resource consumption and pollution. This study investigates the effect of green industrial practices on technical efficiency for Thai manufacturers.
Design/methodology/approach
The study uses stochastic frontier analysis (SFA) to estimate the stochastic frontier production function (SFPF) and inefficiency effects model, as pioneered by Battese and Coelli (1995).
Findings
This study shows that, on average, Thai manufacturing firms have experienced declining returns-to-scale production and relatively low technical efficiency. However, it is estimated that Thai manufacturing firms with a green commitment obtained the highest technical efficiency, followed by those with green activity, green systems and green culture levels, compared to those without any commitment to green manufacturing practices. Finally, internationalization and skill development can significantly improve technical efficiency.
Practical implications
Green industry policy mixes will be vital for driving structural reforms toward a more environmentally friendly and sustainable economic system. Furthermore, circular economy processes can promote firms' production efficiency and resource use.
Originality/value
To the best of the authors' knowledge, this study is the first to investigate the effect of green industry practices on the technical efficiency of Thai manufacturing enterprises. This study also encompasses analyses of the roles of internationalization, innovation and skill development.
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