EconPapers    
Economics at your fingertips  
 

The components and determinants of FDI within firms: A case study of Zambia

Grivas Chiyaba ()
Additional contact information
Grivas Chiyaba: Department of Economics, University of Reading

No em-dp2021-09, Economics Discussion Papers from Department of Economics, University of Reading

Abstract: This study investigates the response of the components of FDI flows to macroeconomic variables within firms. The analysis uses a new firm-level database constructed from anonymised confidential data held by the Zambian Central Bank, covering the period 2008 – 2017. Applying the fixed effects estimation method, the study confirms a positive association between FDI inflows and commodity prices. The study also confirms a positive correlation between reinvested earnings and exchange rate depreciation. Furthermore, the study accepts, but with a qualification, the preference for intra-company debt financing when there is policy uncertainty in a host country. However, the proposition of a positive relationship between equity financing and currency appreciation in the host country is rejected. The study proposes instead a new hypothesis, a negative relationship between equity financing and the exchange rate appreciation.

Keywords: Foreign direct investment; retained earnings; equity; intra-company debt; firm (search for similar items in EconPapers)
JEL-codes: E3 F23 F24 F31 H32 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2021-05-07
New Economics Papers: this item is included in nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.reading.ac.uk/web/files/economics/emdp202109.pdf

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:rdg:emxxdp:em-dp2021-09

Access Statistics for this paper

More papers in Economics Discussion Papers from Department of Economics, University of Reading Contact information at EDIRC.
Bibliographic data for series maintained by Alexander Mihailov ().

 
Page updated 2022-09-28
Handle: RePEc:rdg:emxxdp:em-dp2021-09