The Role of Financial Market Performance in Encouraging Foreign Portfolio Investment in Developing Countries

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Published: Dec 31, 2021

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Keywords:
portfolio investment, listed companies, Stocks traded, market capitalization, turnover ratio,
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DOI:10.25130/tjaes.17.56.4.25
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DOI: 10.25130/tjaes.17.56.4.25
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Saba Ehssan aldeen Al bazazz
College of Administration and Economics, University of Mosul
saba.bap96@student.uomosul.edu.iq
Mufeed D. Y. Almula-Dhanoon
College of Administration and Economics, University of Mosul
dr.mufeed@uomosul.edu.iq

DOI:https://doi.org/10.25130/tjaes.17.56.4.25

Abstract

In the globalized economic system characterized by liberalized international economic participation, economic development strategy requires by developing countries is to take advantage of the benefits of international trade and investment by following policies that allow foreign direct and indirect (portfolio) investment flows. The research aims to investigate the impact of financial market performance on foreign portfolio investment (FPI) in developing countries. For this purpose, the panel data for the period 1996-2017 was used, to estimate the panel data linear regression models, in order to examine the impact of the financial market indicators represented by the number of companies listed in the stock market, the value of traded shares as a percent of GDP, market capitalization as a percent of GDP, and turnover ratio, on Portfolio investment flows rate in four developing countries: Argentina, Brazil, Mexico and Indonesia. The results showed that there was a positive effect of market capitalization and turnover ratio indicators on portfolio investment, while the number of companies did not show a significant impact on portfolio investment flows.

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How to Cite
Al bazazz, S. E. aldeen, & Y. Almula-Dhanoon, M. D. (2021). The Role of Financial Market Performance in Encouraging Foreign Portfolio Investment in Developing Countries. Tikrit Journal of Administrative and Economic Sciences, 17(56, 4), 414–431. https://doi.org/10.25130/tjaes.17.56.4.25
Issue
Vol. 17 No. 56, 4 (2021): Vol. 17 , No.56, Part 4
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Articles

References

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