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FDI Inflows-Economic Globalization Nexus in ASEAN Countries: The Panel Bootstrap Causality Test Based on Wavelet Decomposition

FDI Inflows-Economic Globalization Nexus in ASEAN Countries: The Panel Bootstrap Causality Test... This study aims to investigate the causal linkage between foreign direct investment (FDI) inflows and economic globalization (considering de facto and de jure indexes) for 7 Association of Southeast Asian Nations (ASEAN) countries for 1985–2018. Our sample consists of Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Empirically, we propose the panel bootstrap causality test based on wavelet decomposition to find a causal link between the series in different time scales. The main advantages of the methodology can be listed as follows; (a) testing the unit root behavior of the series, or existence of a cointegration relationship between the series are not pre-requisites, (b) one can test the causal relationship between the series in different time scales. Also, we employ the panel bootstrap causality test of Kónya (Econ Modell 23:978–992, 2006) to compare our results with the panel bootstrap causality test based on wavelet decomposition. In addition to the causality analyses, this study utilizes the panel bootstrap cointegration test of Westerlund-Edgerton (2007) to find long-run relationship between variables. The proposed method’s results exhibit that ASEAN countries’ FDI inflows and types of economic globalization levels have mutually affected each other, especially in the long-run. The empirical findings offer some significant implications for policymakers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia-Pacific Financial Markets Springer Journals

FDI Inflows-Economic Globalization Nexus in ASEAN Countries: The Panel Bootstrap Causality Test Based on Wavelet Decomposition

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References (72)

Publisher
Springer Journals
Copyright
Copyright © The Author(s), under exclusive licence to Springer Japan KK, part of Springer Nature 2022
ISSN
1387-2834
eISSN
1573-6946
DOI
10.1007/s10690-022-09377-5
Publisher site
See Article on Publisher Site

Abstract

This study aims to investigate the causal linkage between foreign direct investment (FDI) inflows and economic globalization (considering de facto and de jure indexes) for 7 Association of Southeast Asian Nations (ASEAN) countries for 1985–2018. Our sample consists of Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Empirically, we propose the panel bootstrap causality test based on wavelet decomposition to find a causal link between the series in different time scales. The main advantages of the methodology can be listed as follows; (a) testing the unit root behavior of the series, or existence of a cointegration relationship between the series are not pre-requisites, (b) one can test the causal relationship between the series in different time scales. Also, we employ the panel bootstrap causality test of Kónya (Econ Modell 23:978–992, 2006) to compare our results with the panel bootstrap causality test based on wavelet decomposition. In addition to the causality analyses, this study utilizes the panel bootstrap cointegration test of Westerlund-Edgerton (2007) to find long-run relationship between variables. The proposed method’s results exhibit that ASEAN countries’ FDI inflows and types of economic globalization levels have mutually affected each other, especially in the long-run. The empirical findings offer some significant implications for policymakers.

Journal

Asia-Pacific Financial Markets – Springer Journals

Published: Jun 1, 2023

Keywords: ASEAN countries; Economic globalization; FDI inflows; Panel bootstrap causality; Wavelet decomposition; C33; F40; F60

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