A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015)

Amna Al-Ameeri; Hanaa Al Samarai

doi:doi:10.11648/j.jwer.20170603.12

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A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015)

Amna Al-Ameeri, Hanaa Al Samarai

Published in Journal of World Economic Research (Volume 6, Issue 3)

Received: 8 March 2017 Accepted: 30 March 2017 Published: 25 May 2017

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Abstract

In order to analyze the direct and indirect effects of the foreign direct investment on the Iraqis balance of payments and financial account for the period (2003-2015), the study population and sample selected was the Balance of Payments Division at the Central Bank of Iraq through the follow-up of the entry of the data incoming from the relevant parties like banks and Iraq Stock Exchange in order to calculate the foreign direct investment through sorting and isolating the transactions that are classified under this part of the balance of payments and then registering the value of the transaction in the balance of payments as credit or debit transaction. The research methodology used a sample represented by the Balance of Payments Compilation Guide issued by the International Monetary Fund. A study was conducted to compare the fifth edition of the guide that was issued in 1993 and the sixth edition that was released in 2009. The study concluded that the outflows of foreign direct investment from Iraq were relatively weak as they did not exceed USD1,562.4, representing only 7.4% of total capital inflows to Iraq, which is also small relatively and its share of total foreign direct investment inflows to Arab countries ranged from 1.2% in 2007 to 10.7% in 2014. Hence, the effect of the flows of foreign direct investment both inside and outside Iraq on the financial account in particular and the balance of payment in general was weak. Even though the primary effect of the inflows might be positive, the effect was negative on all items of the financial account and balance of payment in general during the whole period. In other words, the obligations resulting from the inflows are bigger than their counterpart from the outflows. The study recommended adopting and setting some certain mechanisms to ensure the transmission of the effects of the international economy through the foreign direct investment into the domestic economy and the real sectors. Consequently, the financial account of the balance of payments is initially affected. In turn indirect impacts take place on the current account and service account through affecting the macro variables like the gross fixed capital formation that is considered a productive capacity that could be utilized to increase production and attain positive growth.

Published in	Journal of World Economic Research (Volume 6, Issue 3)
DOI	10.11648/j.jwer.20170603.12
Page(s)	34-45
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Iraqi Economy, Iraqi BOP, Foreign Direct Investments, Iraq

References

[1]	Brahim Guendouzi, Relations Economiques International Sons. 5th edition. Ager 2008.
[2]	Driss, Slim. "L’attractivité des investissements directs étrangers industriels en Tunisie." Région et développement 25 (2007): 137-156.
[3]	Alexander, Gordon J., William F. Sharpe, and Jeffery V. Bailey. Fundamentals of Investments/Fundamentos de Inversiones. Pearson Educación, 2003.
[4]	Hung Jingo. Globalization of Capital, Studies on Economic Globalization. 2003.
[5]	Alasrag, Hussien. "Foreign Direct Investment Development Policies in the Arab Countries." MPRA Paper, (83). [Online] Available: http://mpra.ub.uni-muenchen.de/2230/ (Mar, 2007) (2005).
[6]	Daniels, Joseph, and David D. VanHoose. "International monetary and financial economics." (2005).
[7]	Goldstein, Morris. Determinants and systemic consequences of international capital flows. Vol. 77. International Monetary Fund, 1991.
[8]	OECD: Benchmark Definition of Foreign Direct investment. Fourth Edition, 2008.
[9]	Raymond Vernon. The manager in the international Economy 7th edition. Prentice Hall International 1nc. London, UK, 1996.
[10]	Robert J. Carbaugh, International Economics 1 (3d ed. 1989).
[11]	Yaici Farid, precis de finance international.E. N. A. G. Agerie, 2008.

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APA Style

Amna Al-Ameeri, Hanaa Al Samarai. (2017). A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015). Journal of World Economic Research, 6(3), 34-45. https://doi.org/10.11648/j.jwer.20170603.12

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ACS Style

Amna Al-Ameeri; Hanaa Al Samarai. A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015). J. World Econ. Res. 2017, 6(3), 34-45. doi: 10.11648/j.jwer.20170603.12

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AMA Style

Amna Al-Ameeri, Hanaa Al Samarai. A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015). J World Econ Res. 2017;6(3):34-45. doi: 10.11648/j.jwer.20170603.12

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@article{10.11648/j.jwer.20170603.12,
  author = {Amna Al-Ameeri and Hanaa Al Samarai},
  title = {A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015)},
  journal = {Journal of World Economic Research},
  volume = {6},
  number = {3},
  pages = {34-45},
  doi = {10.11648/j.jwer.20170603.12},
  url = {https://doi.org/10.11648/j.jwer.20170603.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20170603.12},
  abstract = {In order to analyze the direct and indirect effects of the foreign direct investment on the Iraqis balance of payments and financial account for the period (2003-2015), the study population and sample selected was the Balance of Payments Division at the Central Bank of Iraq through the follow-up of the entry of the data incoming from the relevant parties like banks and Iraq Stock Exchange in order to calculate the foreign direct investment through sorting and isolating the transactions that are classified under this part of the balance of payments and then registering the value of the transaction in the balance of payments as credit or debit transaction. The research methodology used a sample represented by the Balance of Payments Compilation Guide issued by the International Monetary Fund. A study was conducted to compare the fifth edition of the guide that was issued in 1993 and the sixth edition that was released in 2009. The study concluded that the outflows of foreign direct investment from Iraq were relatively weak as they did not exceed USD1,562.4, representing only 7.4% of total capital inflows to Iraq, which is also small relatively and its share of total foreign direct investment inflows to Arab countries ranged from 1.2% in 2007 to 10.7% in 2014. Hence, the effect of the flows of foreign direct investment both inside and outside Iraq on the financial account in particular and the balance of payment in general was weak. Even though the primary effect of the inflows might be positive, the effect was negative on all items of the financial account and balance of payment in general during the whole period. In other words, the obligations resulting from the inflows are bigger than their counterpart from the outflows. The study recommended adopting and setting some certain mechanisms to ensure the transmission of the effects of the international economy through the foreign direct investment into the domestic economy and the real sectors. Consequently, the financial account of the balance of payments is initially affected. In turn indirect impacts take place on the current account and service account through affecting the macro variables like the gross fixed capital formation that is considered a productive capacity that could be utilized to increase production and attain positive growth.},
 year = {2017}
}

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TY  - JOUR
T1  - A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015)
AU  - Amna Al-Ameeri
AU  - Hanaa Al Samarai
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DO  - 10.11648/j.jwer.20170603.12
T2  - Journal of World Economic Research
JF  - Journal of World Economic Research
JO  - Journal of World Economic Research
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AB  - In order to analyze the direct and indirect effects of the foreign direct investment on the Iraqis balance of payments and financial account for the period (2003-2015), the study population and sample selected was the Balance of Payments Division at the Central Bank of Iraq through the follow-up of the entry of the data incoming from the relevant parties like banks and Iraq Stock Exchange in order to calculate the foreign direct investment through sorting and isolating the transactions that are classified under this part of the balance of payments and then registering the value of the transaction in the balance of payments as credit or debit transaction. The research methodology used a sample represented by the Balance of Payments Compilation Guide issued by the International Monetary Fund. A study was conducted to compare the fifth edition of the guide that was issued in 1993 and the sixth edition that was released in 2009. The study concluded that the outflows of foreign direct investment from Iraq were relatively weak as they did not exceed USD1,562.4, representing only 7.4% of total capital inflows to Iraq, which is also small relatively and its share of total foreign direct investment inflows to Arab countries ranged from 1.2% in 2007 to 10.7% in 2014. Hence, the effect of the flows of foreign direct investment both inside and outside Iraq on the financial account in particular and the balance of payment in general was weak. Even though the primary effect of the inflows might be positive, the effect was negative on all items of the financial account and balance of payment in general during the whole period. In other words, the obligations resulting from the inflows are bigger than their counterpart from the outflows. The study recommended adopting and setting some certain mechanisms to ensure the transmission of the effects of the international economy through the foreign direct investment into the domestic economy and the real sectors. Consequently, the financial account of the balance of payments is initially affected. In turn indirect impacts take place on the current account and service account through affecting the macro variables like the gross fixed capital formation that is considered a productive capacity that could be utilized to increase production and attain positive growth.
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Author Information

Amna Al-Ameeri

Central Bank of Iraq, Baghdad, Iraq
Hanaa Al Samarai

Central Bank of Iraq, Baghdad, Iraq

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APA Style

Amna Al-Ameeri, Hanaa Al Samarai. (2017). A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015). Journal of World Economic Research, 6(3), 34-45. https://doi.org/10.11648/j.jwer.20170603.12

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ACS Style

Amna Al-Ameeri; Hanaa Al Samarai. A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015). J. World Econ. Res. 2017, 6(3), 34-45. doi: 10.11648/j.jwer.20170603.12

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AMA Style

Amna Al-Ameeri, Hanaa Al Samarai. A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015). J World Econ Res. 2017;6(3):34-45. doi: 10.11648/j.jwer.20170603.12

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@article{10.11648/j.jwer.20170603.12,
  author = {Amna Al-Ameeri and Hanaa Al Samarai},
  title = {A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015)},
  journal = {Journal of World Economic Research},
  volume = {6},
  number = {3},
  pages = {34-45},
  doi = {10.11648/j.jwer.20170603.12},
  url = {https://doi.org/10.11648/j.jwer.20170603.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20170603.12},
  abstract = {In order to analyze the direct and indirect effects of the foreign direct investment on the Iraqis balance of payments and financial account for the period (2003-2015), the study population and sample selected was the Balance of Payments Division at the Central Bank of Iraq through the follow-up of the entry of the data incoming from the relevant parties like banks and Iraq Stock Exchange in order to calculate the foreign direct investment through sorting and isolating the transactions that are classified under this part of the balance of payments and then registering the value of the transaction in the balance of payments as credit or debit transaction. The research methodology used a sample represented by the Balance of Payments Compilation Guide issued by the International Monetary Fund. A study was conducted to compare the fifth edition of the guide that was issued in 1993 and the sixth edition that was released in 2009. The study concluded that the outflows of foreign direct investment from Iraq were relatively weak as they did not exceed USD1,562.4, representing only 7.4% of total capital inflows to Iraq, which is also small relatively and its share of total foreign direct investment inflows to Arab countries ranged from 1.2% in 2007 to 10.7% in 2014. Hence, the effect of the flows of foreign direct investment both inside and outside Iraq on the financial account in particular and the balance of payment in general was weak. Even though the primary effect of the inflows might be positive, the effect was negative on all items of the financial account and balance of payment in general during the whole period. In other words, the obligations resulting from the inflows are bigger than their counterpart from the outflows. The study recommended adopting and setting some certain mechanisms to ensure the transmission of the effects of the international economy through the foreign direct investment into the domestic economy and the real sectors. Consequently, the financial account of the balance of payments is initially affected. In turn indirect impacts take place on the current account and service account through affecting the macro variables like the gross fixed capital formation that is considered a productive capacity that could be utilized to increase production and attain positive growth.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - A Thorough Analysis of the Effects of Foreign Direct Investment on the Financial Account of the Iraqi Balance of Payments for the Period (2003-2015)
AU  - Amna Al-Ameeri
AU  - Hanaa Al Samarai
Y1  - 2017/05/25
PY  - 2017
N1  - https://doi.org/10.11648/j.jwer.20170603.12
DO  - 10.11648/j.jwer.20170603.12
T2  - Journal of World Economic Research
JF  - Journal of World Economic Research
JO  - Journal of World Economic Research
SP  - 34
EP  - 45
PB  - Science Publishing Group
SN  - 2328-7748
UR  - https://doi.org/10.11648/j.jwer.20170603.12
AB  - In order to analyze the direct and indirect effects of the foreign direct investment on the Iraqis balance of payments and financial account for the period (2003-2015), the study population and sample selected was the Balance of Payments Division at the Central Bank of Iraq through the follow-up of the entry of the data incoming from the relevant parties like banks and Iraq Stock Exchange in order to calculate the foreign direct investment through sorting and isolating the transactions that are classified under this part of the balance of payments and then registering the value of the transaction in the balance of payments as credit or debit transaction. The research methodology used a sample represented by the Balance of Payments Compilation Guide issued by the International Monetary Fund. A study was conducted to compare the fifth edition of the guide that was issued in 1993 and the sixth edition that was released in 2009. The study concluded that the outflows of foreign direct investment from Iraq were relatively weak as they did not exceed USD1,562.4, representing only 7.4% of total capital inflows to Iraq, which is also small relatively and its share of total foreign direct investment inflows to Arab countries ranged from 1.2% in 2007 to 10.7% in 2014. Hence, the effect of the flows of foreign direct investment both inside and outside Iraq on the financial account in particular and the balance of payment in general was weak. Even though the primary effect of the inflows might be positive, the effect was negative on all items of the financial account and balance of payment in general during the whole period. In other words, the obligations resulting from the inflows are bigger than their counterpart from the outflows. The study recommended adopting and setting some certain mechanisms to ensure the transmission of the effects of the international economy through the foreign direct investment into the domestic economy and the real sectors. Consequently, the financial account of the balance of payments is initially affected. In turn indirect impacts take place on the current account and service account through affecting the macro variables like the gross fixed capital formation that is considered a productive capacity that could be utilized to increase production and attain positive growth.
VL  - 6
IS  - 3
ER  -

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