The Influence of Financial Inclusion and Macroeconomic on Foreign Direct Investment (FDI) Flows in The Organization of Islamic Cooperation (OIC) Countries
DOI:
https://doi.org/10.12928/optimum.v11i1.4017Abstract
Foreign capital flows are important factors in the development of sustainable economies, especially in developing countries such as the OIC countries. Lately, the rapid development of the financial sector and macroeconomic stability became a serious concern by foreign investors, where financial inclusion and macroeconomics played an important role in attracting direct foreign capital flows (FDI). The study aims to investigate the role of financial inclusion and macroeconomic variables on the foreign direct flow of capital (FDI) by using data panels in 8 OKI member States during the 2012-2018 time span. The research uses the Fix Effect Model (FEM) Panel data Analysis tool, which is believed to be able to explain the correlation between independent variables and more accurate dependents. As for the results of the study showed that in partial only variable avaibility (the number of branches of the bank/100,000 adults) is a significant positive draws FDI in the OKI country. While on macroeconomic variables the exchange rates have significant negative effect on FDI, while interest rates and economic growth have significant positive relationships in attracting FDI.
References
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Akay, H., Karaköy Ç., (2008). The role of international accounting standards in foreign direct investment and foreign direct investment in Kyrgyzstan. International Capital Movements and Emerging Markets International Symposium. Bandırma: Balıkesir University, Bandırma İİBF, 68-78.
Alba, J. C. (2009). Ascariasis lumbricoides and Ascaris suum: A Comparison of Electrophoretic Banding Patterns of Protein Extracts from the Reproductive Organs and Body Wall. Vaterinarski Arhiv 79(3). p. 281-291.
Al Nasser, O.M. and Soydemir, G. (2010) Domestic and International Determinants of Foreign Direct Investment in Latin America. FMA Annual Meeting, New York.
Alguacil, M., Cuadros, A., & Orts, V. (2011). Inward FDI and Growth: The Role of Macroeconomic and Institutional Environment. Journal of Policy Modeling, 33, 481-496.
Andinuur, J. (2013). Inflation, Foreign Direct Investment and Economic Growth in Ghana. Master Thesis. University of Ghana, available at: http://ugspace.ug.edu.gh.
Baltagi B.H., Demetriades P.O., Law S.H. (2009). Financial development and openness: Evidence from panel data. J Dev Econ 89: 285–296.
Bodie, Kane. & Marcus, A. J. (2006). Investasi. Edisi ke enam. Terjemahan. Jakarta: Salemba Empat.
Benassy-Quere, A.,Fontagne,L. dan Lahreche-Revil, A. 2001. Exchange-Rate Strategies in the Competition for Attracting Foreign Direct Investment. Journal of the Japanese and International Economies, 15,178-198.
Demirguc-Kunt A, Beck T, Honohan P. (2008). Finance for All Policies and Pitfalls in Expandin Access, Washington, DC (US): World Bank.
Demirhan, E., & Mahmut, M. (2008). Determinants Of Foreign Direct Invesment Flows Analysis. Prague Economic papers, 356-369.
Diamond, D. W., Dybvig, P. H. (1983) Bank runs, deposit insurance, and liquidity. J Polit Econ 91: 401–419.
Ekananda Mahyus. 2014. Ekonomi Internasional. Jakarta: Erlangga.
Fabozzi, Frank J. and Peterson, Pamela P. 2003. Financial Management and Analysis. New Jersey: Scond Adition, John Wiley & Sons, Inc. Hoboken.
Fedderke, J. W., &Romm, A. T. (2006).Growth impact and determinants of foreign direct investment into South Africa, 1956-2003.Economic Modelling, 23(5), 738-760.
Gerard, A., Tulong, S., & Topowijono. (2015). Analisis Pengaruh Makro Ekonomi Terhadap Keputusan Investasi Asing Di Indonesia. Jurnal Administrasi Bisnis (JAB) Vol. 22 No. 2 1-8 .
Globerman & Shapiro, (2003). Governance Infrastrukture and US foreign direct investment. Journal of International Business Studies is currently. Vol.34, issue 1, 19-39.
Gupta, Aurag, et al. (2014). Financial Inclusion and Human Development: A State-Wise Analysis From India. International Journal of Economics, Comerce and Management.
Inoue, T., & Hamori, S. (2016). Financial access and economic growth: Evidence from Sub-Saharan Africa. Emerging Markets Finance and Trade, 52(3).
Juanda, Bambang dan Junaidi. 2012. Ekonometrika Deret Waktu Teori dan Aplikasi. Bogor: IPB Press.
Karacan, A. İ., 1997. Finans, ekonomi ve politika. Creative Yayıncılık, Istanbul.
Karim, Adiwarman. 2010. Bank Islam (Analisis Fiqih dan Keuangan). Jakarta: PT. RajaGrafindo Persada.
Levine, R. (1997). Financial Development and Economic Growth: Views and Agenda. Journal of Economic. Literature, 35, 688-726.
Lily. J., Kogid. K., Mulok. D., Sang. L.T., and Asid. R. (2014).
Exchange Rate Movement and Foreign Direct Investment in Asean Economies. Hindawi Publishing Corporation Economics Research International Volume 2014, 1-10.
Morrissey. O., and Mongkol. M.U., (2008) Foreign Direct Investment and Exchange Rates: A case Study of US FDI in Emerging Market Countries. Journal of School of Economics, University of Nottingham and Bank of Thailand.
Nanga, Muana. (2001). Makro Ekonomi, Teori, Masalah dan Kebijakan. Edisi Perdana. Jakarta: PT. Raja Grafindo Persada.
Omankhanlen, Alex Ehimere. (2011).The Effect of Exchange Rate and Inflation on Foreign Direct Investment and Its Relation with Economic Groth in Nigeria. Valley International Journal. No.11.
Permana, S. H., & Rivani, E. (2013). Pengaruh Produk Domestik Bruto, Inflasi, Infrastruktur, Dan Risiko Politik Terhadap Investasi Langsung Asing Di Indonesia. Jurnal Ekonomi & Kebijakan Publik, Vol. 4 No. 1, 75 – 87.
Poelhekke, S. (2015) Do global banks facilitate foreign direct investment? Eur Econ Rev 76: 25–46.
Qamar, R. (2019). Macroeconomic Factors Of Fdi Inflows In Asian Economies: A Study Of 14 Asian Countries.International Jpurnal Of Advanced Reseachr (IJAR). ISSN: 2320-5407 Int. J. Adv. Res. 7(2), 289-300.
Qamruzzaman, M., & Wei, J. (2019). Do financial inclusion, stock market development attract foreign capital flows in developing economy: a panel data investigation. Quantitative Finance and Economics, 88-108.
Rasheed, Q., (2019). Macroeconomic Factors of Fdi Inflows In Asian Economies: A Study Of 14 Asian Countries. International Journal of Advanced Research. 7(2), 289-300.
Sanjaya, Made I dan Nursechafia. 2016. Inklusi Keuangan Dan Pertumbuha Inklusif: Analisis Antar Provinsi Di Indonesia. Buletin Ekonomi Moneter dan Perbankan, Volume 18, Nomor 3.
Sarma, M. (2012). Index of Financial Inclusion–A Measure of Financial Sector Inclusiveness. Centre for International Trade and Development. School of International Studies Working. Paper Jawaharlal Nehru University. Delhi, India.
Sudarsono, H. (2008). The Determinants of FDI Flows In OIC Countries. Jurnal ekonomi Pembangunan. Vol. 13 No.3.
Sukirno, S. (2006). Makroekonomi: Teori dan Pengantar. Edisi ketiga. Jakarta Indonesia: Raja Grafindo Persada.
Tajgardoon, G., Noormohamadi, K., & Behname, M. (2015). Foreign Direct Investment and Islamic Banking: A Granger Causality Test. Economics and Finance Review, 8-13.
Tang, S. (2007). Foreign Direct Investment and Its Impact in China: A Time Series Analysis. Submitted in Fulfillment of the Requirements of the degree of Doctor of Philosophy. Griffith: Department of International Business and Asian Studies, Griffith Business School, Griffith University.
Tandelilin, E. (2010). Analisis Investasi dan Manajemen Portofolio. Edisi 1. Yogyakarta: BPFE.
The Statistical, Economic and Social Research and Training Centre for Islamic Countries (SESRIC), (2019).
Tulong, G.A., Suhadak. (2015). Analisis Pengaruh Makro Ekonomi Terhadap Keputusan Investasi Asing Di Indonesia (Studi Pada Bank Indonesia Periode 2005-2013). Jurnal Administrasi Bisnis (JAB)|Vol. 22 No. 2 M.
World Bank Report. (2011). United State, New York.
Xaypanya, p., R. Poomthan dan Paweenawat, S. W. (2014). The determinants of Foreign Investment in ASEAN: the First differencing panel data analysis. International Journal of Social Economics, 43(3), 239-250.
