A note on Australia's inward and outward direct foreign investment

This research note investigates the determinants of Australia's inward and outward direct foreign investment (DFI) using annual and quarterly data. It is found from pooled annual data for Australia and seven developed countries that DFI has been influenced by labor disputes, current account balances, Australia's real GDP and real exchange rates. The application of an econometric model using quarterly data shows that the long run elasticities of DFI with respect to real exchange rates and labor disputes are significant for selected cases. JEL classification: F21, F49.