Exploring the effect of financial variables on the net inflow of foreign direct investment in emerging economies of the BRICS Treaty and Iran

Abstract

The main objective of this research is to investigate the effect of financial variables on the net inflow of foreign direct investment in the emerging economies of the BRICS and Iran during the period from 2009 to 2016. So, in the first step, after presenting theoretical studies and research background, the econometric model of the research is introduced. Accordingly, the true net direct investment variable is considered as a function of the real exchange rate, inflation rate as well as the ratio of net exports to the actual GDP, and we estimate by the fixed effect method. The estimated results show that the real exchange rate variables and ratio of net exports to gross domestic product have a positive and significant effect on the true net direct investment variable. On the other hand, in this research, the negative and significant impact of the inflation rate on the net direct investment has also been achieved. In the end, research suggestions and suggestions for future studies are presented.