Interaction of market size, inflation and trade openness on foreign direct investment inflows in India, China and Japan: panel dynamic analysis

Md. Hasanur Rahman, Munem Ahmad Chowdhury and Mst Sharmin Akter

International Journal of Indian Culture and Business Management, 2023, vol. 29, issue 1, 45-64

Abstract: In the world of competitiveness, FDI is considered as a macroeconomic component, and that developing countries are introducing it as a substitute for their larger investment gaps in policies. Fast-growing countries like China, India, and Japan are also no exception to this. Findings from the study confirm the existence of a long-term relationship among the variables. The long-run dynamic equation shows a greater degree of openness and an expansion of market size attracts more FDI in the long run, whilst raising the inflation rate discourages foreigners from investing. In the short run, none of the variables have any sort of significant relationship with the Granger causality test, giving an interesting insight that unidirectional causalities exist with the remaining variables, which run from FDI to trade openness. In a nutshell, FDI helps to sustain the economies of these countries through its multiplier impact on other macroeconomic factors.

Keywords: foreign direct investment; FDI; inflation; market size; trade openness; India; China; Japan. (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=130963 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijicbm:v:29:y:2023:i:1:p:45-64

Access Statistics for this article

More articles in International Journal of Indian Culture and Business Management from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().