Economic Strategy

Economic Strategy

Evaluating the Effect of Countries Export Composition, Based on the BEC Classification, on FDI with an Emphasis on the General Policies of the Resilience Economy

Document Type : Original Article

Authors
Mohammadhossein Peyrovi 1
Saadat Rahman 2
Seyed Komeil Tayebi 3
1 PhD student of International Economics, Semnan University, Semnan, Iran
2 Associate Professor in Economics Dept. of Economics, Faculty of Economics Management and Administrative Sciences, Semnan University, Semnan, Iran.
3 Professor, Department of Economics, University of Isfahan, Isfahan, Iran
10.22034/es.2024.436830.1733
Abstract
Considering the challenge of lack of capital accumulation and access to advanced technologies, foreign direct investment (FDI) is considered an important tool for economic growth in developing countries. Therefore, it seems very necessary to investigate the factors affecting its attraction to them. The attraction of foreign direct investment by any country requires the provision of a suitable environment in the destination country. On the other hand, the composition of the country's exports can indicate the quality of economic institutions in a country. So, the main purpose of this research is to investigate the effect of the composition of the country's exports on the attraction of FDI in developing countries.
For this purpose, using gravity model and Panel ARDL, the effect of the export ratio of developing countries, based on BEC's classification, evaluated on the accumulation of foreign direct investment made by member countries of Group 7 during the years 2006 to 2019.
The findings of the research indicate that the effect of changing the ratio of export of intermediate goods, capital goods and consumer goods has become significant in attracting foreign direct investment. While the change in raw material export ratio has had not a significant effect on the discussed variable. Therefore, adopting export facilitation policies and at the same time avoiding from raw material exporting is effective in attracting foreign direct investment.
Keywords
Foreign Direct Investment (FDI)
International Trade
Developing Countries
Developed Countries
BEC classification

Subjects

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  • Receive Date 01 February 2024
  • Revise Date 10 May 2024
  • Accept Date 21 May 2024