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ISSN : 2233-4165(Print)
ISSN : 2233-5382(Online)
Journal of Industrial Distribution & Business Vol.10 No.11 pp.15-23
DOI : http://dx.doi.org/10.13106/ijidb.2019.vol10.no11.15

What Determines the Foreign Direct Investment in Finances of OECD Countries

Yugang HE1, Baek-Ryul CHOI2
1 First author, Doctoral Student, Department of International Trade, Jeonbuk National University, Korea. Email: 1293647581@jbnu.ac.kr

ⓒ Copyright: Korean Distribution Science Association (KODISA)
This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted noncommercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
2 Corresponding Author, Professor, Department of International Trade, Jeonbuk National University, Korea. Email: brchoi@jbnu.ac.kr
September 19, 2019 October 16, 2019 November 05, 2019

Abstract

Purpose: Global economic integration has provided good opportunities and conditions for the development of foreign direct investment in Finances. Therefore, this paper attempts to explore what determines foreign direct investment in Finances of Organization for Economic Co-operation and Development (OECD) countries. Research design, data and methodology: This paper employs the panel data over the period 2005-2017 and uses the random effect model to estimate this proposition. Results: The results indicate that the foreign direct investment in services, growth rate of GDP, interest rate and saving are positively related with foreign direct investment in finances. Conversely, the growth rate of wage and fluctuation rate of exchange rate are negatively related with foreign direct investment in finances. Moreover, the results verify that the effect of these variables on foreign direct investment in finances is different before and after 2008 (global economic crisis). In addition, the results also manifest that the regional effect exists. Namely, the effect of these variables on foreign direct investment in finances between G7 countries and G20 countries exist significant difference. Conclusions: Those variables used in this paper are related with foreign direct investment in Finances of (OECD) countries.

JEL Classification Code : C33, F00, G00

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