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Determinants of Foreign Portfolio Investment and Its Effects on China

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  • Muhammad Afaq Haider
  • Muhammad Asif Khan
  • Elyas Abdulahi

Abstract

Foreign portfolio investment consists of securities and other capital inflows of assets possibly held by other foreign countries. Foreign Portfolio Investment (FPI) provides the investor with indirect ownership of financial assets. This study intends to investigate the economic factors which attract the investors to invest in the host country. We observed what the impact of FPI determinants on the Chinese economy. To elaborate our results we used multiple regression models by using E-views. This study investigates the effects of FPI and its determinants of the economic structure of China. The data of FPI, GDP, FDI, EXD and P has been taken from the World Bank. GDP and External Debt are the strong determinants of the FPI, the Exchange Rate, Population shows that these variables have a significant impact on the FPI. The investors speculate the high returns, more secure investors¡¯ rights and feel safer to invest in the country.

Suggested Citation

  • Muhammad Afaq Haider & Muhammad Asif Khan & Elyas Abdulahi, 2016. "Determinants of Foreign Portfolio Investment and Its Effects on China," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(12), pages 143-150, December.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:12:p:143-150
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    References listed on IDEAS

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    Cited by:

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    2. Courage Mlambo, 2022. "The impact of international portfolio investment on economic growth: the case of selected African states," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(10), pages 151-159, December.
    3. Samson Edo & Eseosa Joy Sowemimo, 2022. "Correlative and asymmetric effects of information technology on capital flows," Netnomics, Springer, vol. 22(2), pages 231-257, October.
    4. Jimoh Sina Ogede & Musa Olanrewaju Oduola & Olumuyiwa Ganiyu Yinusa & Lukman Raimi, 2023. "Modelling The Influence Of Financial Inclusion On The Remittancegrowth Nexus In Nigeria," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 68(237), pages 137-163, April – J.
    5. Tricia Mangal & Day-Yang Liu, 2020. "The impact of economic freedom on foreign portfolio investments: The case of the Caricom single market and economy," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(2), pages 213-222, March.
    6. Li, Zhenghui & Mo, Bin & Nie, He, 2023. "Time and frequency dynamic connectedness between cryptocurrencies and financial assets in China," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 46-57.

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    More about this item

    Keywords

    foreign portfolio investment; economic structure; economic growth; Chinese economy;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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