The impact of financial sector development on foreign direct investment in emerging markets
Year: 2017
Type: dissertation
Abstract: The study investigates the financial sector development threshold levels that would \ninfluence FDI inflows. The threshold levels identified are 41.27% of stock market \ncapitalisation for stock market turnover, 53.55% of GDP for stock market value traded, \n121.53% of GDP for stock market capitalisation, 114.43% of GDP for domestic credit to \nprivate sector by banks, 144.06% of GDP for domestic credit provided by financial sector, \n0.22% of GDP for outstanding domestic private debt securities and 41.26% of GDP for \noutstanding domestic public debt securities. The results show that higher stock market \nand banking sector development above the threshold level positively and significantly \ninfluence FDI inflows whilst the influence of lower stock market and banking sector \ndevelopment on FDI inflows was weak and less significant. Levels of private bond market \ndevelopment equal to or greater than the threshold level are found to have a positive but \nnon-significant impact on FDI inflows whereas private bond market development levels \nless than the threshold has a weaker positive and non-significant influence on FDI inflows. \nOn the contrary, public bond market development levels equal to or greater than the \nthreshold level negatively influenced FDI inflows whilst levels of public bond market \ndevelopment less than the threshold positively but non-significantly attracted FDI inflows \ninto emerging markets.
Author: Kunofiwa Tsaurai
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2749458933