Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331021 
Year of Publication: 
2022
Citation: 
[Journal:] Research in Globalization [ISSN:] 2590-051X [Volume:] 5 [Article No.:] 100094 [Year:] 2022 [Pages:] 1-10
Publisher: 
Elsevier, Amsterdam
Abstract: 
Diaspora investment flows measured as foreign direct investments represent one of the major outcomes of the activities of diaspora investors, entrepreneurs, and venture capitalists in the economy. This paper contributes to the literature with distinct analysis of diaspora investment flows in low interest rate environments (Canada, Denmark, Euro area, Japan, Korea Republic, Sweden and the US) and high interest rate environments (Brazil, China, Colombia, India, Indonesia, Mexico and Turkey). First, we employ the Bounds cointegration analysis to investigate whether diaspora investment integrates either of the two groups of economies. Second, we apply the Toda-Yamamoto causality approach to examine whether the interest rate environment causes diaspora investment inflows. Third, we employ the Autoregressive Distributed Lag-Mixed Data Sampling (ADL-MIDAS) technique to evaluate the role of macroeconomic performance for attracting diaspora investments. We find proof of financial integration of diaspora investments in all the low interest rate economies, whereas the evidence is limited to three countries in the high interest rate environment. We also find that the low interest rate environment (more than the high interest rate environment) engenders diaspora investment inflows and also enhances the positive impact of macroeconomic performance in attracting diaspora investments. We highlight some insightful investment and policy implications from the findings.
Subjects: 
Cointegration
Diaspora investment
Interest rate environment
Mixed data sampling
JEL: 
C19
C22
F21
F36
O23
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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