چکیده:
This paper investigates the key factors affecting the foreign direct investment
(FDI) inflow to developing countries during the period (1995-2010) with
emphasis on the financial development. Financial development, as an
important factor in FDI absorption and a prerequisite for utilizing the
benefits of FDI, not only increases the FDI inflow in developing countries, but
also improves the absorption capacity and ability of these countries to utilize
the benefits of FDI. Since the financial system consists of several components
and provides a variety of services, various indicators which represent the
development of different aspects and components of financial system, have
been applied in order to assess the impact of financial development on the
FDI. Results indicated that development of various components of financial
system (stock market and banking sector) as well as different aspects of
financial development (size and activity level of financial system) all have
positive and significant impact on the FDI inflow in developing countries
during the studied period.
خلاصه ماشینی:
Results indicated that development of various components of financial system (stock market and banking sector) as well as different aspects of financial development (size and activity level of financial system) all have positive and significant impact on the FDI inflow in developing countries during the studied period.
This study investigates the impact of financial development on the FDI inflow to developing countries through different indicators of financial development which represent the development in various components of financial system (banking sector and stock market) and different aspects of financial development (size and activity of financial system.
By developing a theoretical framework about the mechanisms of FDI impact on the economic growth through creating the backward linkages, Alfaro et al (2006) indicates that if financial markets gets developed enough, the host countries will benefit from the backward linkages between the foreign and domestic firms, which lead to the positive spillovers for the whole economy.
Ang (2008) studied the determinants of FDI in Malaysia during 1960-2005 and indicated that the financial development (the ratio of allocated private sector credit to the GDP) has a significant positive impact on the FDI inflow in Malaysia.
In general, the results of Table (5) indicate the significant and positive impact of financial system (banking sector and stock market) development (size and activity) on the FDI inflow.
Results of this study can be summarized as follows: 22 First, development of financial system components (banking sector and stock market) and also different dimensions of financial development (total size of financial system and its activity) have significant and positive impact on the FDI inflow in developing countries.