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Investment is one of the major driving forces of economic growth. Developing countries often suffer from a deficiency of domestic investment (DI) and persuade foreign investment. India, at the time of gaining independence, was a capital-deficient poor country. Development activities of the country rely on the accumulation of foreign investment. In the post-reform period, several initiatives have been taken to attract foreign investment. After three decades of reform, a trend-diverging pattern of foreign direct investment (FDI), debt and DI is noticed. Against this backdrop, this paper explores whether investment fuels growth in India for an extended period, 1981–2019, and separately for the post-reform period, 1991–2019. It involves the autoregressive distributed lag approach to cointegration followed by its error correction representation. Results find that the FDI is detrimental to long-run growth. The external debt also retards long-run growth but has a trivial positive impact in the short run. On the other hand, a growth-augmenting impact of DI is noticed. Importantly, the impacts of foreign and DI have not changed much in the post-reform period. The results also indicate a growth-augmenting impact of human capital, with a detrimental impact of trade openness and exchange rate depreciation. In short, the study corroborates that foreign investment is not conducive to growth even in the post-reform era. Appropriate policy manifestation and an investment-friendly ambiance are critically important for growth gains from investment.

This paper investigates the impact of remittances on economic growth for the ten MENA countries for the MENA region over a period from 1980 to 2021. Our contribution consists in decomposing the effect of remittances on economic growth into a direct effect and an indirect effect which are transmitted through the domestic investment channel and human capital channel. To do so, our econometric approach is based on dynamic panel data (GMM diff and GMM sys) in order to overcome endogeneity and inverse causality bias. Two main results can be identified: First, the results show that remittances negatively affect economic growth. Second, we show that the interaction terms between remittances and human capital ($\mathrm{\text{Rem}}\ast \mathrm{\text{enrol}}$) and remittances and domestic investment ($\mathrm{\text{Rem}}\ast \mathrm{\text{inv}}$) are positive and statistically significant in the dynamic panel approach. These results show that the effectiveness of migrant remittances in terms of economic growth depends heavily on improving human capital and orienting remittances to the most productive investments for MENA countries. The policy implications of our study are that governments of the most remittance-receiving countries in the MENA region must give great importance to improving domestic investment and the level of human capital in order to enhance remittances and promoting economic growth.

This study explores the heterogeneous influence of capital flight and economic policy uncertainty (EPU) on domestic investment in Nigeria. The study utilizes the novel quantile-based nonlinear autoregressive distributed lag (QNARDL) estimation procedure to estimate both the sign-based and the size-based asymmetric influence of capital flight and EPU on domestic investment. The investigation’s outcomes are as follows: First, capital flight influences domestic investment negatively, predominantly in the upper quantiles. Second, it demonstrates that country-specific EPU and its global-based variant significantly negatively affect a country’s investment. Third, the study finds that domestic and world policy uncertainty aggravates the suppressing effect of capital flight on domestic investment. Fourth, a robust unidirectional causality from EPU (indigenous and world) to capital flight implies that policy uncertainty enervates the business climate and creates fear of losses among investors, affecting investment negatively. Fifth, the study indicates an increasing rate of devastating influence of EPU on domestic investment, with more pernicious effects at the upper quantile. The implication is that the devastating effect of EPU (whether country-based or world-based) on domestic investment is highly sensitive to its size. The policy recommendations from the main discoveries have been suggested.

The debate on the impact of business climate on private investment is still ongoing today. This paper contributes to the existing literature by examining the impact of a wide range of dimensions of the business climate on domestic investment and foreign direct investment in a sample of Middle East and North African economies between 2000 and 2015. Findings of the paper add new evidence and shed interesting insights into the debate. While almost all areas matter for domestic and foreign investors, the common and most important dimensions for both of them are regulations, macroeconomic management and infrastructure. Moreover, the control of corruption and labor market regulation are found to exert opposite effects on domestic investment and foreign direct investment. We conclude that setting up a good business climate is an overall process that should touch simultaneously and gradually all dimensions.

Recently, there has been a significant rise in the volume and significance of FDI flows. The foreign direct investment (FDI), which is undertaken by multinational corporations, affects not only the host economy but also the home economy in many ways. The impact of FDI on host economy has been very well explained by several researchers. But there is lack of literature that has investigated the impact of FDI on the economy of the investing country. The purpose of this paper is to revisit the empirical studies which are related with exploring the impact of outward FDI on various economic activities such as exports, domestic investment, productivity and economic growth in the investing country. In this pursuit, a through survey of empirical literature in this area, published since 1980 across different journals has been made and presented.