Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang

This study assesses the extent to which Foreign Direct Investment (FDI) in Asia crowds in or crowds out Domestic Investment (DI) in different time period consist of before, during and after Asia and Global financial crises. The data collected are over the period of 1993-2016 and separated into six s...

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Main Author:	Budang, Nurul Azwanie
Format:	Thesis
Language:	English
Published:	2020
Subjects:	Investment capital formation speculation Investment, capital formation, speculation
Online Access:	https://ir.uitm.edu.my/id/eprint/32404/1/32404.pdf
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id	my-uitm-ir.32404
record_format	uketd_dc
spelling	my-uitm-ir.324042020-08-26T06:01:38Z Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang 2020 Budang, Nurul Azwanie Investment, capital formation, speculation Foreign investments. Country risk This study assesses the extent to which Foreign Direct Investment (FDI) in Asia crowds in or crowds out Domestic Investment (DI) in different time period consist of before, during and after Asia and Global financial crises. The data collected are over the period of 1993-2016 and separated into six sub-periods; 1993-1995 (Before Asia Financial Crisis), 1996-1998 (During Asia Financial Crisis), 1999-2001 (After Asia Financial Crisis), 2004-2006 (Before Global Financial Crisis), 2007-2009 (During Global Financial Crisis) and 2010-2016 (After Global Financial Crisis). The model is run for 38 of Asian countries. In this study, researcher estimated the data using Panel Ordinary Least Square (POLS), Fixed Effects (FE), Random Effects (RE), Instrumental Variables (IV) and Fixed Effects with the Discroll and Kraay standard error estimator. Besides that, panel co-integration (Kao residual co-integration and Westerlund) tests and crowding effects formula have been applied to investigate long term relationship. The general empirical finding found that FDI has significantly negative and crowd out effect on DI during and after Asia financial crisis and before and during Global financial crisis. It is supported by the result of panel co-integration tests and long-term formula of crowding effect where the result revealed significantly negative and crowd out effect of FDI on DI in long term period for both of Asia and global financial crisis. For the case of insignificant results before Asia financial crisis and after Global financial crisis, the countries may focus on improvement of DI instead of attracting more FDI. However, FDIs activities keep on moving and aim to help in improvement of DI though it is not significant in host Asia. Thus, this study concluded that implementation of FDI during the crisis may contribute to the improvement of economic growth but discourage the local investor to invest in a country as it was crowded out local investment. 2020 Thesis https://ir.uitm.edu.my/id/eprint/32404/ https://ir.uitm.edu.my/id/eprint/32404/1/32404.pdf text en public masters Universiti Teknologi MARA Faculty of Business Management Abd Hakim, Taufik
institution	Universiti Teknologi MARA
collection	UiTM Institutional Repository
language	English
advisor	Abd Hakim, Taufik
topic	Investment capital formation speculation Investment, capital formation, speculation
spellingShingle	Investment capital formation speculation Investment, capital formation, speculation Budang, Nurul Azwanie Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang
description	This study assesses the extent to which Foreign Direct Investment (FDI) in Asia crowds in or crowds out Domestic Investment (DI) in different time period consist of before, during and after Asia and Global financial crises. The data collected are over the period of 1993-2016 and separated into six sub-periods; 1993-1995 (Before Asia Financial Crisis), 1996-1998 (During Asia Financial Crisis), 1999-2001 (After Asia Financial Crisis), 2004-2006 (Before Global Financial Crisis), 2007-2009 (During Global Financial Crisis) and 2010-2016 (After Global Financial Crisis). The model is run for 38 of Asian countries. In this study, researcher estimated the data using Panel Ordinary Least Square (POLS), Fixed Effects (FE), Random Effects (RE), Instrumental Variables (IV) and Fixed Effects with the Discroll and Kraay standard error estimator. Besides that, panel co-integration (Kao residual co-integration and Westerlund) tests and crowding effects formula have been applied to investigate long term relationship. The general empirical finding found that FDI has significantly negative and crowd out effect on DI during and after Asia financial crisis and before and during Global financial crisis. It is supported by the result of panel co-integration tests and long-term formula of crowding effect where the result revealed significantly negative and crowd out effect of FDI on DI in long term period for both of Asia and global financial crisis. For the case of insignificant results before Asia financial crisis and after Global financial crisis, the countries may focus on improvement of DI instead of attracting more FDI. However, FDIs activities keep on moving and aim to help in improvement of DI though it is not significant in host Asia. Thus, this study concluded that implementation of FDI during the crisis may contribute to the improvement of economic growth but discourage the local investor to invest in a country as it was crowded out local investment.
format	Thesis
qualification_level	Master's degree
author	Budang, Nurul Azwanie
author_facet	Budang, Nurul Azwanie
author_sort	Budang, Nurul Azwanie
title	Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang
title_short	Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang
title_full	Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang
title_fullStr	Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang
title_full_unstemmed	Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang
title_sort	modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 asian countries / nurul azwanie budang
granting_institution	Universiti Teknologi MARA
granting_department	Faculty of Business Management
publishDate	2020
url	https://ir.uitm.edu.my/id/eprint/32404/1/32404.pdf
_version_	1783734160339238912

Modelling the crowding effect of foreign direct investment on domestic investment: evidence from 38 Asian countries / Nurul Azwanie Budang

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