Open AccessDeterminants Of Foreign Direct Investment In The Manufacturing Industry: A VectorAutoregression Model Approach
Author(s) -
Symon Elli R. Blas et.al
Publication year - 2021
Publication title -
türk bilgisayar ve matematik eğitimi dergisi
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.218
H-Index - 3
ISSN - 1309-4653
DOI - 10.17762/turcomat.v12i3.1697
Subject(s) - foreign direct investment , vector autoregression , index (typography) , economics , government (linguistics) , agriculture , consumer price index (south africa) , unit (ring theory) , labor cost , manufacturing , investment (military) , affect (linguistics) , government expenditure , price index , empirical research , econometrics , monetary economics , business , macroeconomics , mathematics , marketing , engineering , statistics , computer science , philosophy , law , ecology , linguistics , public finance , world wide web , biology , political science , mechanical engineering , monetary policy , mathematics education , politics
This paper aimed to identify the factors that affect Foreign Direct Investment (FDI) in the manufacturing industry using a Vector Autoregression (VAR) model. The researcher selected possible economic indicators (Agriculture, Consumer Price Index, Government Expenditure and Unit Labour Cost) through theories and empirical evidences from various researches, covering quarterly period of 2004-2018. The result showed that there is a significant relationship between FDI and the selected economic indicators. It also revealed that shocks agriculture produces a positive impact, as well as government expenditure. However, consumer price index when introduced to shocks showed an immediate negative impact. On the other hand, unit labor cost did not have a significant impact on the foreign investments. The future variability of FDI primarily depends on itself, while the selected indicators affect roughly one-tenth of the future values of FDI