foreign direct investment and government stability
DESCRIPTION
Presentation on the correlation between FDI and government stability.TRANSCRIPT
![Page 1: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/1.jpg)
Foreign Direct Investment and Government Stability
Colby, Christian, Danielle, Luis, and StefanINB 555 Competing in the Global Economy
![Page 2: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/2.jpg)
FDI and Government StabilityAgenda
Question Posed
Country Selection – Stability Ratings
Investing Company Selection
Regression analysis breakdown
Results and analysis
Questions
![Page 3: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/3.jpg)
FDI and Government Stability
Question Posed :
“ Is there a correlation between the stability of a government and its involvement in Foreign Direct Investment?”
![Page 4: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/4.jpg)
FDI and Government StabilityCountry Selection – Stability Ratings
30 Nations from around the world
5 different governing types
Stability Rating 1 or 0
Majority are stable
4 countries with instability
![Page 5: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/5.jpg)
FDI and Government Stability
Country Selection – Stability Ratings
Top Three countries
Different political systems
All three are permanent members of the UN Security Council
One is considered a developing nation
![Page 6: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/6.jpg)
FDI and Government Stability
Investing Company Selection
Europ
e (E
U)
Europ
e (n
on-E
U)Asia
North
Am
erica
South
Am
erica
Midd
le Eas
t 0
4
8
12
8
3
6
11
1 1
Organizations by Location
Developed Nations Developing Nations0
10
20
3025
5
Economic Development
Total Revenue US 2.4 trillion UK 8.6 billion China 7.2 billion
Total Invested US 2.1 billion UK 1.4 billion China 1.5 billion
![Page 7: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/7.jpg)
FDI and Government Stability
Investing Company Selection
Oil & Gas12
Automobile5
Conglomerate3
Retail 2
Commodities2
Finance2
Info Tech1
Telecom1 Electronics
1 Power Utility(Elec.)1
By Industry
![Page 8: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/8.jpg)
FDI and Government StabilityRegression Analysis
• Independent Variables – Stability Rating (SR), The
Top 30 Companies in FDI (TT), GDP (GDP), and FDI stock (FDIS)
– Measured the correlation to overall host country FDI
• R Square = 81.85%• Adjusted R Square =
78.95%• F Statistic = 28.19• SEE = $228,768.85
* Used economic general rules of thumb for critical values
Y = 2,053.25 + 39,776.3(SR) + 0.0000184(TT) + 0.028(GDP) + 0.00000723(FDIS)
![Page 9: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/9.jpg)
FDI and Government StabilityRegression Analysis Cont’d
Variable T statistic Coefficient
Stability Rating 0.312519998 39776.29785
Top 30 Total FDI 0.06283412 1.84186E-05
GDP 0.686520295 0.028163213
FDI Stock 4.395857904 7.23608E-07
![Page 10: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/10.jpg)
FDI and Government Stability
Results
“ Is there a correlation between the stability of a government and its involvement in Foreign Direct Investment?”
![Page 11: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/11.jpg)
FDI and Government Stability
Analysis
Not enough turbulence in sample population
Variety of organization host nations
Stronger way to classify whether a nation is stable or not
Expand number of FDI organizations
![Page 12: Foreign Direct Investment And Government Stability](https://reader036.vdocuments.us/reader036/viewer/2022062320/559139cf1a28ab07498b47b0/html5/thumbnails/12.jpg)
FDI and Government Stability
Questions