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Population Aging and FDI inflows: A multi-country cointegration analysis

Author

Listed:
  • Rajarshi Mitra

    (Tokyo International University)

  • Md. Thasinul Abedin

    (University of Chittagong)

  • Kanon Kumar Sen

    (Jahangirnagar University)

Abstract

The neoclassical theory posits an inverse relationship between population ageing and FDI inflows. We investigate the short-run and long-run relationships between population ageing and net FDI inflows (% of GDP) for 20 OECD countries, controlling for real national income, real exchange rate, trade openness and domestic investment. The autoregressive distributed lag (ARDL) bounds testing approach to cointegration is applied. In contrast to the neoclassical proposition, the long-run effects of population ageing on net FDI inflows (% of GDP) are found to be country-specific. The effects are significantly negative for Australia, Austria, Costa Rica, Denmark, Finland, Spain and Sweden; significantly positive for Colombia, Germany, Greece, Italy, Japan, Norway and Portugal, and insignificant for Belgium, Chile, France, Mexico, the UK and the USA.

Suggested Citation

  • Rajarshi Mitra & Md. Thasinul Abedin & Kanon Kumar Sen, 2022. "Population Aging and FDI inflows: A multi-country cointegration analysis," Economics Bulletin, AccessEcon, vol. 42(3), pages 1631-1644.
    • Handle: RePEc:ebl:ecbull:eb-22-00510
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    File URL: http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I3-P136.pdf
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    More about this item

    Keywords

    Bounds Testing; Cointegration; Demography; FDI; OECD;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • J1 - Labor and Demographic Economics - - Demographic Economics

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