Determinants of Foreign Direct Investment, Net Portfolio Equity Inflows, and Balance of Payments
Date of Submission
Campus Only Senior Thesis
Bachelor of Arts
This paper aims to investigate the primary determinants of foreign direct investment (FDI), balance of payments (BoP), and net portfolio equity inflows (NPEI). The research adds on to the existing empirical literature by studying whether the independent variables economic growth rate, unemployment rate, trade openness, corruption index, and stock price volatility would significantly impact FDI, NPEI, and BoP in a sample consisting of both developed and developing countries. Employing a fixed effects panel data regression model, the results highlighted statistically significance that economic growth, unemployment rate, trade openness, and corruption index helped determine the FDI for a country. Next, it was seen that economic growth, corruption index, and stock price volatility were statistically significant to understand the BoP for a country. Lastly, results also illustrated that economic growth, trade openness, and stock price volatility were significant for NPEI in a country. Future studies can explore this topic in further detail by increasing the sample size to include more countries and also include additional measures to understand the corruption index and stock market of a country.
Jain, Kalpita, "Determinants of Foreign Direct Investment, Net Portfolio Equity Inflows, and Balance of Payments" (2023). CMC Senior Theses. 3205.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.