The Mojo, Dodgy, And Dingy Dominance of Domestic Deeds on Foreign Direct Investment in Emerging and Transition Economies (Published)
Insufficiencies of empirical research were found regarding the flow of Foreign Direct Investment (FDI) to Emerging and Transition Economics (ETEs) as compared to other economies. This study was designed to analyst domestic deeds that positively, negatively, and horridly affected the flow of FDI to ETEs and determine if they were the same for all ETEs. The results paralleled existing FDI literature including extensive and established theories. First, bivariate and multiple regressions analysis were conducted to determine whether ETEs domestic deeds (political stability, domestic credit, level of GDP-ETEs, level of corruption, and availability of mineral resources) significantly impact on the inflow of FDI to their countries. The correlation amongst GDP and FDI was significant (r =.91, p < .01), political stability was significant (r =-.23, p <.05), and availability of domestic credit was significant (r =.27, p < .05). Additionally, analysis on regional deeds variables (telephone lines and RI) revealed that telephone lines was a robust predictor of FDI (ß = .38, p < .05) and RI (ß = .57, p < .05).
Research experts on countries that are transiting from one economic state to another (transition countries) and developing countries have claimed that a large part of economic activities were done within the shadow. In applying the estimation techniques for measuring underground economy for the period 1995–2008, the results indicated the size of shadow activities to be 35–44% of GDP for developing economies, 21–30% of GDP for the countries transiting from communist to capitalist economy (transition economies) and 14–16% of GDP for the Organization for Economic Co-operation and Development (OECD) economies. For advance economies, the value of underground activities grew from 7.9% of GDP in 1976 to about 16% in 2008. Since 2005, academic and political debate on development finance and development aid has raised the issue that shadow economy in countries worldwide is becoming larger than can be imagined, consequently, the need to be concerned about its composition.