| The factors affecting Foreign direct investment（FDI）is not only the main driving force of global economic integration,but also one of the factors driving the economic growth of developing countries.Myanmar as an emerging market country,Myanmar has experienced many years of economic closure,and the inflow of foreign direct investment is still in its infancy,and it is hoped that more foreign direct investment will be attracted to promote economic growth.Unlike other developing countries,Myanmar has been in a state of economic and social blockade for a long time,and its political situation is not stable enough to attract foreign direct investment.In this context,finding out the main factors affecting the inflow of foreign direct investment in Myanmar has important practical guiding significance.This article aims to analyze the influencing factors of foreign direct investment（FDI）inflow.Foreign direct investment is affected by economic growth,economic scale,gross capital formation,unemployment,trade openness,interest rates,inflation rates and market exchange rates.The study analyzed time-series data from 1989 to 2018.The data comes from the Directorate of Investment and Company Administration（Myanmar）,the World Bank and the Ministry of Planning,Finance and Industry（MOPFI）.This thesis is based on Myanmar’s current economic situation and foreign direct investment models and theories,combining empirical and experimental methods,to analyze the determinant of FDI inflow in Myanmar and to analyse the impact of foreign direct investment（FDI）on economic growth.Therefore,this research gains certain effective results which are a device into 5 Parts:The first part analyzes the inflow of foreign direct investment in Myanmar.First of all,sort out the economic reforms and trade policy changes of foreign direct investment in Myanmar and the changes in the flow of foreign direct investment in Myanmar.The Federal Government promulgated the ―Foreign Investment Law‖ in 1988 in accordance with the―Union of Myanmar Investment Law of 1959",and then issued a new version in 2012"Foreign Investment Law." Foreign direct investment began to flow into Myanmar in 1989.The inflow of foreign direct investment has generally shown a rapid growth trend,but fluctuated greatly.Since 2015,the inflow of foreign direct investment has declined significantly.Secondly,it introduces the role of the Myanmar Investment Commission.Finally,it analyzes the trend of foreign capital inflows in Myanmar and the sources of foreign direct investment in Myanmar by the economic sector.The second part analyzes the inflow of foreign direct investment in Myanmar.According to the 1989-2018 data obtained by the World Bank National Accounts Data,Ministry of Planning,Finance and Industry（MOPFI）and the Directorate of Investment and Company Administration（DICA,Myanmar）,using ADF test and the Phillips and Perron（PP）test,Johansen co-integration test and Error Correction Model（ECM）to determine the influencing factors of foreign direct investment（FDI）inflows.The results show that economic scale,exchange rate（EXR）,trade openness（TO）,interest rate（IR）and infrastructure（INFRA）have a significant impact on foreign direct investment.Gross Domestic Product（GDP）,exchange rate（EXR）and inflation rate（INFR）have a negative impact on foreign direct investment,while trade openness（TO）,interest rate（IR）and infrastructure（INFRA）have a positive impact on foreign direct investment.We also find that source—countries with larger market size,depreciation of the exchange rate and good infrastructure tend to invest more in Myanmar.The third part is an empirical analysis using panel data from 2005 to 2018.To study the overall determinants of foreign direct investment flowing into Myanmar from Asia,this chapter investigates the influencing factors of foreign direct investment flowing into Myanmar from 9 ASEAN countries.The study found that trade openness,GDP per capita,GDP growth rate,total capital formation,and import and export are the main factors determinants of FDI from ASEAN countries to Myanmar;trade openness,GDP per capita,imports and gross capital formation are a positive impact on foreign direct investment inflows into Myanmar;exports have a negative impact on foreign direct investment.Therefore,a country with open trade attracts more foreign direct investment than other countries.The fourth part is to use Autoregressive Distributed Lag（ARDL）model and Error Correction Model（ECM）to analyze time-series data to test the short-term and long-term determinants of economic growth and foreign direct investment（FDI）.The research results show that FDI inflows and trade openness（TO）have a positive impact on economic growth.In addition,a market exchange rate（EXR）,inflation rate（INFR）,and unemployment（UMEMP）have a negative impact on economic growth.The fifth part is a summary of the full text.The study found that foreign direct investment has played a positive role in Myanmar’s economic development,especially the transformation of economic structure.Because foreign direct investment plays an important role,the competition between countries is crueler.Therefore,governments of all countries should improve the investment environment.In order to attract more investment,countries need to create a favorable investment environment.The author believes that the Myanmar government should start from three aspects: improving the foreign investment environment,optimizing the structure of foreign investment and perfecting the foundation for industrial development,actively improving the investment environment,attracting more FDI inflows,and promoting economic growth. |
