THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023
This study aims to analyse the relationship between the effectiveness of financial institutions and foreign investment flows in light of time-series data. The results showed that the financial institutions effectiveness index remained relatively stable during the studied period, while the foreign i...
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| Format: | Article |
| Language: | English |
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University of Banja Luka, Faculty of Economics
2025-06-01
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| Series: | Acta Economica |
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| Online Access: | https://ae.ef.unibl.org/index.php/ae/article/view/543 |
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| author | Sofiane Charef Benatia Kamel Belfodil |
| author_facet | Sofiane Charef Benatia Kamel Belfodil |
| author_sort | Sofiane Charef Benatia |
| collection | DOAJ |
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This study aims to analyse the relationship between the effectiveness of financial institutions and foreign investment flows in light of time-series data. The results showed that the financial institutions effectiveness index remained relatively stable during the studied period, while the foreign investment flow index experienced noticeable fluctuations. Using unit root and cointegration tests, it was found that the two time series, FIEI and DFI, are stationary at level (I(0)) and do not suffer from unit root problems. Furthermore, the results of the bounds test showed the existence of cointegration between the two indices at 1%, 5% and 10% significance levels. Through the standard model, it was found that the FIEI (-1) index has a positive and statistically significant impact on foreign investment flow, while the FDI index did not show a significant effect. The equilibrium correction rate (ECT) was found to be 41.79%, indicating a continuous correction of the gap between actual and balanced values.
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| format | Article |
| id | doaj-art-d79781eb1b9e46a6ac89ed1bab2b0de4 |
| institution | Matheson Library |
| issn | 1512-858X 2232-738X |
| language | English |
| publishDate | 2025-06-01 |
| publisher | University of Banja Luka, Faculty of Economics |
| record_format | Article |
| series | Acta Economica |
| spelling | doaj-art-d79781eb1b9e46a6ac89ed1bab2b0de42025-08-04T15:12:48ZengUniversity of Banja Luka, Faculty of EconomicsActa Economica1512-858X2232-738X2025-06-01234210.63356/ace.2025.007THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023Sofiane Charef Benatia0https://orcid.org/0009-0003-6337-7403Kamel Belfodil1https://orcid.org/0009-0003-6604-9544Faculty of Economic, Commercial and Management Sciences University of Relizane, Relizane, AlgeriaFaculty of Economic, Commercial and Management Sciences University of Relizane, Relizane, Algeria This study aims to analyse the relationship between the effectiveness of financial institutions and foreign investment flows in light of time-series data. The results showed that the financial institutions effectiveness index remained relatively stable during the studied period, while the foreign investment flow index experienced noticeable fluctuations. Using unit root and cointegration tests, it was found that the two time series, FIEI and DFI, are stationary at level (I(0)) and do not suffer from unit root problems. Furthermore, the results of the bounds test showed the existence of cointegration between the two indices at 1%, 5% and 10% significance levels. Through the standard model, it was found that the FIEI (-1) index has a positive and statistically significant impact on foreign investment flow, while the FDI index did not show a significant effect. The equilibrium correction rate (ECT) was found to be 41.79%, indicating a continuous correction of the gap between actual and balanced values. https://ae.ef.unibl.org/index.php/ae/article/view/543financial institutions efficiencyforeign direct investment (FDI)cointegrationARDL modelinvestment environment |
| spellingShingle | Sofiane Charef Benatia Kamel Belfodil THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023 Acta Economica financial institutions efficiency foreign direct investment (FDI) cointegration ARDL model investment environment |
| title | THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023 |
| title_full | THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023 |
| title_fullStr | THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023 |
| title_full_unstemmed | THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023 |
| title_short | THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023 |
| title_sort | interaction betwee the effectiveness of financial institutions and the flow of foreign investment an integrative analysis in the algerian economy 2000 2023 |
| topic | financial institutions efficiency foreign direct investment (FDI) cointegration ARDL model investment environment |
| url | https://ae.ef.unibl.org/index.php/ae/article/view/543 |
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