Which of the following factors affect international direct investment capital?

This study examined the factors affecting foreign direct investments (FDI) for the case of Afghanistan. Generally, the literature has focused on the factors affecting direct investments towards developing and underdeveloped countries. The primary purpose of this study is to identify the factors affecting FDI inflow to Afghanistan. Different from previous studies, this study examined the effects of the following factors; globalization indices, gross domestic product, export volume, import volume, and exchange rate (USD/AFN) of Afghani. The factors were determined based on a review of the literature. Regarding the interaction across variables, three different regression models were tested to examine the effects of those factors on FDI inflows to Afghanistan. Ordinary Least Squares estimation was employed. According to the results of the integrated model (the model that covers all exploratory variables), globalization has a statistically significant positive effect on FDI, whereas the gross domestic product (GDP) has a statistically significant negative effect on FDI. When we test the effect of GDP and exchange rate (EXC) jointly on FDI, we find the statistically significant positive effect of those variables on FDI. The results of this study recommend the economy politicians in Afghanistan implement exchange rate policies that promote the FDI and to increase the inflowing of FDI into the country.

Inhaltsverzeichnis Show

What are the factors affecting international investment?
What are the 4 types of foreign direct investment?
What is the direct investment effect?
Which one of the following would be considered as foreign direct investment?

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References

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What are the factors affecting international investment?

Factors influencing choice of location.

Knowledge and experience of the foreign market. ... .

Size and growth of the foreign market. ... .

Economic policy. ... .

Cultural closeness. ... .

Technology..

What are the 4 types of foreign direct investment?

Types of FDI.

Horizontal FDI. The most common type of FDI is Horizontal FDI, which primarily revolves around investing funds in a foreign company belonging to the same industry as that owned or operated by the FDI investor. ... .

Vertical FDI. Vertical FDI is another type of foreign investment. ... .

Conglomerate FDI. ... .

Platform FDI..

What is the direct investment effect?

Direct investors do not wish to take actions to undermine the value or sustainability of their investments.- Other positive effects associated with inward direct investment include increased employment, improved productivity, technology and knowledge transfer, and overall economic growth.

Which one of the following would be considered as foreign direct investment?

Detailed Solution. The correct answer is Option 4. It is an investment made by a firm or individual in one country into business interests located in another country. FDI is different from foreign portfolio investment where the foreign entity merely buys equity shares of a company.

factors affect international direct investment capital