IS FOREIGN DIRECT INVESTMENT BAD

FOR OUR COUNTRY?

INTRODUCTION

https://bibliotekanauki.pl/articles/404768

In this article that I found titled “Foreign Direct Investment and Economic Growth: Some

Empirical Evidence from the Philippines” is related to Foreign Direct Investment (FDI), it

was published on April 18, 2018. The authors of this article are Abdul Hadi A.R., Zafar

S., Iqbal T., Zafar Z., Iqbal Hussain H. This authors is originally from other countries but

the purpose of their article is to share informations about how Foreign Direct

Investments affects our economies in many ways, directly or indirectly.

SUMMARY

As I study this article, I know that Foreign Direct Investments can have many effects in

the Philippines and other countries. This study includes inflation, gross domestic

product growth, government expenditure on education, electric power consumption,

exchange rate, trade openness and lending interest rate as economic variables. Overall

findings reveal that there is a mix result in terms of key determinants of sectorial level

inward FDI which proves that FDI is not a single phenomenon and that each sector

must be treated on its own terms to attract FDI into the country. Developing Asia is

predicted to increase about 15 percent in 2018, to $515 billion, as a better sign and

better economic outlook in Asian economies. Today, Asia is an emerging region with
investment liberalization by spreading their industrial investment across broad range

through an introduction of new and friendly economic and trade policies and new

regulations in investment.

MAIN BODY

Furthermore, the approach or plan employed in this study is appropriate for the

investigation or problem at hand. The researchers must use the right research

methodology when conducting a research study because it affects the study's accuracy

and success. To evaluate the short- and long-term dynamic relationship between

economic growth and Foreign Direct Investment, the researchers used the ARDL bound

testing approach (FDI). The ARDL approach method they adopted is advantageous for

their research for the following reasons: ARDL allows for inferences on long-run

estimates. Second, the ARDL method uses a large enough number of lags to represent

the data collection process in a general-specific modeling framework.

CONCLUSION

FDIs aren't inherently good or harmful; what matters is how the government regulates

these investments. FDI is a fantastic way for a country to get a firmer footing in the

global market and be backed up by more developed countries if tight laws are in place.

However, we must guarantee that we consider our own domestic market and do not

allow foreign investments to trump it in order to improve the state's overall well-being.

As a growing country, the Philippines must ensure that its people and domestic

products remain at the forefront of its markets so that any foreign direct investments are
beneficial to the country. One approach to do this would be to set a limit on foreign

investments in order to keep the economy steady. This will not only demonstrate to our

domestic investors how important they are to our economy, but it will also establish a

competitive market for foreign capital. If employed properly and in a regulated manner,

people's skills will not only improve, but the economy will also become more

prosperous.

BIBLIOGRAPHY

1. Al Shubiri F.N., 2006, Determinants of foreign direct investment: evidence of sultanate of oman,

“Polish Journal of Management Studies”, 13(2).

2. Asiedu E., 2006, Foreign direct investment in Africa: the role of natural resources, market size,

government policy, institutions and political stability, “The World Economy”, 29(1).

3. Baltagi B.H., Kao Ch., 2001, Nonstationary panels, cointegration in panels and dynamic panels: A

survey, [In:] Badi H. Baltagi, Thomas B. Fomby, R. Carter Hill (ed.), Nonstationary Panels, Panel

Cointegration, and Dynamic Panels (“Advances in Econometrics”, 15) Emerald Group Publishing

Limited.