Acta Universitatis Danubius. Œconomica, Vol 15, No 3 (2019)

Abstract

In the past decade, BRICS countries have been recognized with the sporadic inflows of FDI. An attempt to explore the potential variables that derive the inflows of capital in these countries has sparked off arguments in the literature. Recent past studies have shown mixed results which orchestrated the current necessity to move the frontiers of knowledge and update the existing literature in this regard. Consequently, the study employed various Panel Data Techniques such as Fixed Effects Model, Random Effects Model, Hausman Test and Panel Fully Modified Least Squares. The findings that emerged in this study established among others active variable and passive variable that derive FDI inflows in BRICS economies. The active variables that derive inflows of FDI in BRICS countries are gross domestic product per capita and the standard of living of people in these countries. Whereas market size was discovered to be a passive variable that propels FDI inflows in the BRICS economic region. Based on the findings that originated from this study, it is expedient that this paper recommends as follows: firstly, the policy makers in BRICS countries should embark on further policy measures that will ensure the continuous improvement of living standard of people in one hand and expansion of gross domestic product per capita growth on the other hand. In addition, more policies and stable political goodwill should be embarked upon towards making local market attractive to foreign investors in these countries.