DETERMINANTS OF REINVESTED EARNINGS AS A COMPONENT OF FOREIGN DIRECT INVESTMENT

Burçak Polat

Özet


ABSTRACTPrevious studies have overwhelmingly treated Foreign Direct Investment (FDI) as a monolithic variable rather than a multidimensional one. However, FDI consists of three main components. This study investigates the responsiveness of reinvested earnings as a sub-component of FDI in the 80 countries to the macro-economic indicators and individual country risks for the 2006–2012 period. The study found strong evidence that reinvested earnings are positively correlated with the political risk ratings (confidence level), GDP, GDP growth rate, and consumer confidence level of each individual host country and are negatively associated with repatriation and payment delay risk ratings.Key Words: FDI, foreign reinvested earnings, foreign retained earnings, dynamic panel dataJEL Codes: C23, F21, F23, F24, F29

Tam Metin: PDF


Ekonomi ve Yönetim Araştırmaları Dergisi