The effect of greenfield foreign direct investment, merger and acquisitions and institutions on economic growth for ten selected Asian countries

• Main Author: Shah, Syed Wahid Ali
• Format: Thesis
• Language: English; English
• Published: 2017
• Subjects: HB Economic Theory
• Online Access: https://etd.uum.edu.my/7638/1/s900674_01.pdf; https://etd.uum.edu.my/7638/2/s900674_02.pdf; https://etd.uum.edu.my/7638/; http://sierra.uum.edu.my/record=b1698920~S1
• Institution: Universiti Utara Malaysia

This thesis aims to examine the effect of Greenfield foreign direct investment (GFDI), merger and acquisitions (MNA) with the interaction effect of institutional factors on economic growth in ten selected Asian countries. The inconsistent results of previous studies are appealing researchers to advance further empirical testing with disaggregated FDI in the form of GFDI and MNA. The gap in the literature, as decreasing trend of GDP growth and increasing tendency of FDI in Asia need to be addressed. Therefore, the study examines the interaction effect of institutional factors separately on the relationship between GFDI, MNA and economic growth, in selected Asian countries. In this thesis, we use a two-stage least squares methodology to control endogeneity, while the results of the Hausman test recommends that the fixed effect model is more appropriate for the analysis of ten selected Asian countries covering the period 2002-2016.The findings of the study show that MNA has positive impact on economic growth. while greenfield FDI is not significant in ten selected Asian countries. The results of the interaction effect of institutional factors show that performance of MNA increases with interaction effect of institutional factors. The institutional factors like political stability, rule of law and control of corruption show positive interaction effect with MNA. Similarly, government effectiveness and COC depict the positive interaction effect with GFDI although, voice and accountability and regulatory quality have negative interaction effect on economic growth in selected Asian countries. The results suggest that MNA needs to be encouraged to enhance its potential impact to contribute positively to economic growth. The study further suggests that countries should improve their regulation which are in the favour of investors to get positive results from both types of investments (GFDI, MNA).