MACROPOLITICAL STABILITY AND ABSENCE OF VIOLENCE/TERRORISM AND FOREIGN DIRECT INVESTMENTS: PANEL ANALYSIS
MACROPOLITICAL STABILITY AND ABSENCE OF VIOLENCE/TERRORISM AND FOREIGN DIRECT INVESTMENTS: PANEL ANALYSIS

Author : Onur Başar ÖZBOZKURT -- Elma SATROVİC
Number of pages : 182-191

Abstract

The study investigates the significance of political stability and absence of violence/terrorism on foreign direct investment (FDI) in three panels. The first (overall) panel comprises 110 economies (both developed and developing); the second involves 35 developed economies, whereas the third panel includes 75 developing economies the years between 2002-2015. A Granger causality test, cointegration test and panel ARDL model are employed. The findings of ARDL model show that there is a long-run relationship between political stability and absence of violence/terrorism and FDI for the overall sample as well as for developed countries. In addition, Granger causality test indicates the bidirectional relationship between the economic terms of interest for the overall sample as well as for the sample of developed countries. Nevertheless, developing countries give mixed results. A long-run relationship between FDI and political stability and absence of violence/terrorism is reported whereas there is no evidence on the short-run relationship.

Keywords

Macropolitical stability, absence of violence/terrorism, foreign direct investment, panel ARDL, caus

Read: 1,497

Download: 773