FDI interconnectedness and sustainable economic development: A linear and non-linear Granger causality assessment

Enoch Quaye; Adolf Acquaye; Fred Yamoah; Malick Ndiaye

doi:10.1016/j.jbusres.2023.113981

FDI interconnectedness and sustainable economic development: A linear and non-linear Granger causality assessment

Enoch Quaye, Adolf Acquaye^*, Fred Yamoah, Malick Ndiaye

^*Corresponding author for this work

Research output: Contribution to journal › Article (Academic Journal) › peer-review

12 Citations (Scopus)

Abstract

Previous studies on foreign direct investment (FDI) have not examined the hidden effects of its inherent connectedness characteristics among different economies. In order to uncover such hidden effects, this study conducts two sets of analyses.

Firstly, the systemic risk-based approach constructed using Granger-causality networks and Principal Component Analysis is used to examine the level and degree of the network of pairwise statistical relationships among countries in the Latin American and Caribbean (LAC) region.

Secondly, the determinants of the observed connectedness index are examined using regression models. This set of analysis shows that region-specific and global macroeconomic conditions such as the Consumer Price Index of the LAC region, US term spread, and interest rates impact the degree of interconnectedness.

The complexity and stability of the system of FDI capital expenditure connectedness within the LAC region offers interesting prospects for macro-economic analysis, policy and stakeholder decision-making and further research development.

Original language	English
Article number	113981
Journal	Journal of Business Research
Volume	164
Early online date	3 May 2023
DOIs	https://doi.org/10.1016/j.jbusres.2023.113981
Publication status	Published - 15 Sept 2023

Bibliographical note

Funding Information:
He serves on the Editorial Board of Energies and has Guest Editored Special Issues in the Journal of Environmental Accounting and Management and Energies. He is the recipient of research funding awards from the European Commissions and The British Academy. His research cuts across sustainability issues and how these inform business practice and policy Email: [email protected]

Funding Information:
Dr Malick Ndiaye , is an Associate Professor in Industrial Engineering at the American University of Sharjah, UAE. Previously, he worked for King Fahd University of Petroleum and Minerals (KFUPM) and the Management Mathematics Program at the University of Birmingham, UK. His research areas cover operations research, supply chain management. His research has received grants funded by the Capital Region of Brussels, Belgium; the University of Birmingham; and KFUPM. He is a Certified Supply Chain Professional from the American Association for Operations Management (APICS) and a qualified APICS trainer. Email: [email protected]

Publisher Copyright:
© 2023 Elsevier Inc.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

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title = "FDI interconnectedness and sustainable economic development: A linear and non-linear Granger causality assessment",

abstract = "Previous studies on foreign direct investment (FDI) have not examined the hidden effects of its inherent connectedness characteristics among different economies. In order to uncover such hidden effects, this study conducts two sets of analyses. Firstly, the systemic risk-based approach constructed using Granger-causality networks and Principal Component Analysis is used to examine the level and degree of the network of pairwise statistical relationships among countries in the Latin American and Caribbean (LAC) region. Secondly, the determinants of the observed connectedness index are examined using regression models. This set of analysis shows that region-specific and global macroeconomic conditions such as the Consumer Price Index of the LAC region, US term spread, and interest rates impact the degree of interconnectedness. The complexity and stability of the system of FDI capital expenditure connectedness within the LAC region offers interesting prospects for macro-economic analysis, policy and stakeholder decision-making and further research development.",

author = "Enoch Quaye and Adolf Acquaye and Fred Yamoah and Malick Ndiaye",

note = "Funding Information: He serves on the Editorial Board of Energies and has Guest Editored Special Issues in the Journal of Environmental Accounting and Management and Energies. He is the recipient of research funding awards from the European Commissions and The British Academy. His research cuts across sustainability issues and how these inform business practice and policy Email: [email protected] Funding Information: Dr Malick Ndiaye , is an Associate Professor in Industrial Engineering at the American University of Sharjah, UAE. Previously, he worked for King Fahd University of Petroleum and Minerals (KFUPM) and the Management Mathematics Program at the University of Birmingham, UK. His research areas cover operations research, supply chain management. His research has received grants funded by the Capital Region of Brussels, Belgium; the University of Birmingham; and KFUPM. He is a Certified Supply Chain Professional from the American Association for Operations Management (APICS) and a qualified APICS trainer. Email: [email protected] Publisher Copyright: {\textcopyright} 2023 Elsevier Inc.",

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AU - Yamoah, Fred

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N1 - Funding Information: He serves on the Editorial Board of Energies and has Guest Editored Special Issues in the Journal of Environmental Accounting and Management and Energies. He is the recipient of research funding awards from the European Commissions and The British Academy. His research cuts across sustainability issues and how these inform business practice and policy Email: [email protected] Funding Information: Dr Malick Ndiaye , is an Associate Professor in Industrial Engineering at the American University of Sharjah, UAE. Previously, he worked for King Fahd University of Petroleum and Minerals (KFUPM) and the Management Mathematics Program at the University of Birmingham, UK. His research areas cover operations research, supply chain management. His research has received grants funded by the Capital Region of Brussels, Belgium; the University of Birmingham; and KFUPM. He is a Certified Supply Chain Professional from the American Association for Operations Management (APICS) and a qualified APICS trainer. Email: [email protected] Publisher Copyright: © 2023 Elsevier Inc.

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AB - Previous studies on foreign direct investment (FDI) have not examined the hidden effects of its inherent connectedness characteristics among different economies. In order to uncover such hidden effects, this study conducts two sets of analyses. Firstly, the systemic risk-based approach constructed using Granger-causality networks and Principal Component Analysis is used to examine the level and degree of the network of pairwise statistical relationships among countries in the Latin American and Caribbean (LAC) region. Secondly, the determinants of the observed connectedness index are examined using regression models. This set of analysis shows that region-specific and global macroeconomic conditions such as the Consumer Price Index of the LAC region, US term spread, and interest rates impact the degree of interconnectedness. The complexity and stability of the system of FDI capital expenditure connectedness within the LAC region offers interesting prospects for macro-economic analysis, policy and stakeholder decision-making and further research development.

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FDI interconnectedness and sustainable economic development: A linear and non-linear Granger causality assessment

Abstract

Bibliographical note

UN SDGs

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