Macroeconomic Determinants of FDI Inflows in Cambodia, Laos, Myanmar and Vietnam: Panel Data Analysis
Keywords:
Foreign Direct Investment, Fully-Modified Ordinary Least Square, Panel Granger Causality, Openness, Exchange RateAbstract
The main objective of this study is to examine the macroeconomics determinants of FDI inflows in Cambodia, Laos, Myanmar, and Vietnam. There are many factors obstruct the ability in attracting investments into developing countries. The selected macroeconomics determinants are market size, inflation rate, openness, real effective exchange rate and labor force. This study covered from 2000 to 2016 using annually data. The methods adopted are panel unit root tests, panel cointegration tests, Fully-Modified Ordinary Least Square (FMOLS) and panel Granger causality. The study findings indicate that all the exogenous variables are cointegrated and significant in influencing FDI inflow However, in the short run, there is only unidirectional causal relationship.
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