IDEAS home Printed from https://ideas.repec.org/a/hur/ijarbs/v5y2015i10p240-248.html
   My bibliography  Save this article

The Role of Financial Markets Development in the Foreign Direct Investment Effect on Economic Growth (The case of D8 with Emphasizing on Iran)

Author

Listed:
  • Marzieh Esfandyari

Abstract

Financial development has an important role in absorbing foreign direct investment (FDI) in order to achieve economic growth, according to the emerging literature on FDI. This paper provides support for this hypothesis in the context of D8 countries. The results show that positive impact of FDI on the growth depends on absorptive capacities. The financial development is one of the most important among the capacities. Empirical analysis, using crosscountry data between 2004 and 2013 shows that FDI could not have an independent effect on the growth of D8 countries. Independent effect of FDI on growth could be obtained when FDI is interacted with a threshold level of financial development equal to 3.39. Therefore, focus on the internal changes in the financial markets is necessary in the countries studied before the process of attracting foreign direct investment. More importantly, based on the findings domestic investment can play an ambiguous role in contributing to economic growth.

Suggested Citation

  • Marzieh Esfandyari, 2015. "The Role of Financial Markets Development in the Foreign Direct Investment Effect on Economic Growth (The case of D8 with Emphasizing on Iran)," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(10), pages 240-248, October.
    • Handle: RePEc:hur:ijarbs:v:5:y:2015:i:10:p:240-248
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/The_Role_of_Financial_Markets_Development_in_the_Foreign_Direct_Investment_Effect_on_Economic_Growth_(The_case_of_D8_with_Emphasizing_on_Iran).pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/The_Role_of_Financial_Markets_Development_in_the_Foreign_Direct_Investment_Effect_on_Economic_Growth_(The_case_of_D8_with_Emphasizing_on_Iran).pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shoukat Iqbal Khattak & Waseem Ahmad Khan, 2024. "Chinese Overseas Foreign Direct Investment–International Foreign Portfolio Investment–Financial Sector Development Nexus in the Belt and Road Initiative Economies: A Regional Analysis Based on Third-G," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 3014-3038, March.

    More about this item

    Keywords

    Foreign Direct Investment (FDI); Financial Development; D8 countries;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hur:ijarbs:v:5:y:2015:i:10:p:240-248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/IJARBSS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.