Service firm performance and foreign ownership

2020 ◽  
Author(s):  
Jieun Choi
Keyword(s):  
Foreign Direct Investment ◽  
Firm Performance ◽  
Direct Investment ◽  
Service Sector ◽  
Service Performance ◽  
Service Firms ◽  
Entry Barriers ◽  
Factor Productivity ◽  
Service Firm ◽  
Service Sectors

Abstract Little is known about the performance of service firms and its relations with foreign direct investment (FDI), in part due to methodological and conceptual challenges in measuring service performance. This article suggests two possible measures of service firm performance: total factor productivity (TFP) and markups, with modification needed to improve those measures for the service sector. Using these measures, it examines service firm performance from 1997 to 2007 in Tunisia, where the service sector accounts for 60% of GDP but faces high protection and complex entry barriers. Then, it investigates whether variations in performance can be explained by FDI. It finds that FDI firms have higher TFP but lower markups than local firms, with significant variations across sub-service sectors.

scholarly journals PENGARUH FOREIGN DIRECT INVESTMENT DAN AFTA TERHADAP KESEMPATAN KERJA SEKTORAL DI ASEAN 5

2018 ◽  
Vol 4 (2) ◽  
pp. 140-152
Author(s):  
Ilhamdi Ilhamdi ◽  
Rina Oktaviani ◽  
Yeti Lis Purnamadewi
Keyword(s):  
Foreign Direct Investment ◽  
Free Trade ◽  
Direct Investment ◽  
Free Trade Agreement ◽  
Service Sector ◽  
Negative Impact ◽  
Positive Impact ◽  
Trade Agreement ◽  
Service Sectors ◽  
The Impact

This study aims to analyze the impact of Foreign Direct Investment (FDI) ‎and ‎ASEAN Free Trade Agreement (AFTA) on sectoral employment in ASEAN ‎‎5. The analysis ‎focused on five main sectors, namely agriculture, mining, ‎manufacturing, ‎construction and service sectors. This paper uses panel data ‎approach with Fixed Effect Model. Variable used include employment as an ‎edogenous variable, while GDP, wages and AFTA as exogenous variables. Cross section data that are used in this study consist of ASEAN 5 countries, ‎namely Indonesia, Malaysia, Philippines, Thailand and Vietnam with periods of ‎observation as much as 9 years, from  2006 until 2014.‎The result of this paper that FDI, GDP, wages and AFTA have different ‎impacts in each sector. FDI has positive impact on employment in service sector. ‎GDP has positive impact on employment in manufacturing, construction and ‎service sectors. While GDP in the agricultural and mining sectors has negative ‎impact on employment. The wage has a positive impact on employment in the ‎mining and agricultural sectors. ASEAN Free Trade Agreement (AFTA) that took ‎place in 2010 has a positive impact on employment in the manufacturing and ‎mining sectors.‎Foreign Direct Investment is one factor to overcome employment issues in ‎ASEAN 5, especially in service sector. While GDP becomes an important variable ‎in enhancing ASEAN 5  employment in the manufacturing, construction and ‎services. Increasing wages can be applied on agriculture and mining as it has a ‎positive impact on employment. AFTA that has taken place is proper policy for the ‎ASEAN 5 to encourage economic growth in the mining and manufacturing ‎sectors that have an impact on increasing demand of labor in the sector.‎

scholarly journals Modelling Total Factor Productivity in a Developing Economy

2021 ◽  
Vol 66 (1) ◽  
pp. 75-96
Author(s):  
Joel Hinaunye Eita ◽  
Marcio Jose Pedro
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Total Factor Productivity ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Official Development Assistance ◽  
Factor Productivity ◽  
Service Sectors ◽  
Positive Effect

Abstract Total factor productivity is an important driver of economic growth. It is therefore important to understand its determinants. This will help to enhance it and accelerate economic growth. The objective of this paper is therefore to investigate drivers of total factor productivity in Angola. The investigation covers the period 1995 – 2018. It is conducted for selected sectors of the economy. The results show that foreign direct investment has a positive effect on total factor productivity in all sectors. Increase in openness of the economy and depreciation the exchange rate have a positive effect on total factor productivity in the manufacturing sector. However, an increase in these two variables is associated with a decrease in total factor productivity of the primary and service sectors. The results indicate that a rise in inflation is associated with a decrease in total factor productivity in the manufacturing and service sectors. However, an increase in inflation is positively associated with an increase in total factor productivity in the primary sector. Increase in official development assistance impact negatively on total factor productivity in the primary and service sectors. This variable has a positive effect on total factor productivity of the manufacturing sector. The implication of these results is that Angola should pursue policies that attract foreign direct investment in order to ensure sustainable total factor productivity growth. The impact of other drivers such as openness of the economy, inflation, official development assistance and exchange rate depends on sectors. This implies that it is important for Angola to implement policies, which are specific to sectors. This will help to enhance the growth of total factor productivity.

scholarly journals PENGARUH FOREIGN DIRECT INVESTMENT DAN AFTA TERHADAP KESEMPATAN KERJA SEKTORAL DI ASEAN 5

2018 ◽  
Vol 4 (2) ◽  
pp. 140-152
Author(s):  
Ilhamdi Ilhamdi ◽  
Rina Oktaviani ◽  
Yeti Lis Purnamadewi
Keyword(s):  
Foreign Direct Investment ◽  
Free Trade ◽  
Direct Investment ◽  
Free Trade Agreement ◽  
Service Sector ◽  
Negative Impact ◽  
Positive Impact ◽  
Trade Agreement ◽  
Service Sectors ◽  
The Impact

This study aims to analyze the impact of Foreign Direct Investment (FDI) ‎and ‎ASEAN Free Trade Agreement (AFTA) on sectoral employment in ASEAN ‎‎5. The analysis ‎focused on five main sectors, namely agriculture, mining, ‎manufacturing, ‎construction and service sectors. This paper uses panel data ‎approach with Fixed Effect Model. Variable used include employment as an ‎edogenous variable, while GDP, wages and AFTA as exogenous variables. Cross section data that are used in this study consist of ASEAN 5 countries, ‎namely Indonesia, Malaysia, Philippines, Thailand and Vietnam with periods of ‎observation as much as 9 years, from  2006 until 2014.‎The result of this paper that FDI, GDP, wages and AFTA have different ‎impacts in each sector. FDI has positive impact on employment in service sector. ‎GDP has positive impact on employment in manufacturing, construction and ‎service sectors. While GDP in the agricultural and mining sectors has negative ‎impact on employment. The wage has a positive impact on employment in the ‎mining and agricultural sectors. ASEAN Free Trade Agreement (AFTA) that took ‎place in 2010 has a positive impact on employment in the manufacturing and ‎mining sectors.‎Foreign Direct Investment is one factor to overcome employment issues in ‎ASEAN 5, especially in service sector. While GDP becomes an important variable ‎in enhancing ASEAN 5  employment in the manufacturing, construction and ‎services. Increasing wages can be applied on agriculture and mining as it has a ‎positive impact on employment. AFTA that has taken place is proper policy for the ‎ASEAN 5 to encourage economic growth in the mining and manufacturing ‎sectors that have an impact on increasing demand of labor in the sector.‎

Does foreign direct investment spillover total factor productivity growth? A study of Indian drugs and pharmaceutical industry

2017 ◽  
Vol 24 (7) ◽  
pp. 1937-1955 ◽  
Author(s):  
Nitin Arora ◽  
Preeti Lohani
Keyword(s):  
Foreign Direct Investment ◽  
Pharmaceutical Industry ◽  
Total Factor Productivity ◽  
Direct Investment ◽  
Spillover Effect ◽  
Foreign Firms ◽  
Factor Productivity ◽  
Content Type ◽  
Domestic Firms ◽  
Tfp Growth

Purpose Foreign firms have certain advantages which may spillover to domestic firms in the form of improvements in total factor productivity (TFP) growth. The purpose of this paper is to empirically observe the presence of TFP spillovers of foreign direct investment (FDI) to domestic firms through analyzing source of TFP growth in Indian drugs and pharmaceutical industry. Design/methodology/approach This paper examines the sources of TFP spillovers of FDI in Indian drugs and pharmaceutical industry over the period 1999 to 2014. The data of 304 firms has been used for estimation of the growth rates of TFP and its sources under stochastic frontier analyses based Malmquist productivity index framework. For frontier estimation, the Wang and Ho (2010) model has been executed using translog form of production function. Findings The results show that there exists significant TFP spillover effect from the presence of foreign equity in drugs and pharmaceutical industry of India. The results also show that the major source of TFP fluctuations in the said industry is managerial efficiency that has been significantly affected by FDI spillover variables. In sum, the phenomenon of significant Intra-industry (horizontal) efficiency led productivity spillovers of FDI found valid in case of Indian drugs and pharmaceutical industry. Research limitations/implications The number of foreign firms is very less to imitate the significant impact of foreign investment on TFP growth of Indian pharmaceutical industry at aggregated level; and the Wang and Ho (2010) model is failing to capture direct impact of FDI on technological change under Malmquist framework. Practical implications Since, there exists dominance of domestic firms in Indian drugs and pharmaceutical industry, the planners should follow the policy which not only attract FDI but also benefit domestic firms; for example, developing modern infrastructure and institution which will further help domestic firms to absorb spillovers provided by the Multinational Corporations and also accelerate the growth and development of the economy. Social implications In no case, the foreign firms should dominate the market share otherwise the efficiency spillover effect will be negative and the domestic firms will be destroyed under the self-centric approach of foreign firms protected by the recent patent laws. Originality/value The study is a unique attempt to discuss the production structure and sources of TFP spillovers of FDI in Indian drugs and pharmaceutical industry with such a wide coverage of 304 firms over a period of 16 years under Wang and Ho (2010) model’s framework. The existing studies on TFP spillovers are using either a small sample size of firms or based upon traditional techniques of measuring spillover effects.

scholarly journals Perception of the Selected Business Environment Aspects by Service Firms

2019 ◽  
Vol 10 (19) ◽  
pp. 111-127 ◽  
Author(s):  
Khurram Ajaz Khan ◽  
Gentjan Çera ◽  
Vaclav Netek
Keyword(s):  
Factor Analysis ◽  
Service Sector ◽  
Business Environment ◽  
Service Firms ◽  
Business Sector ◽  
Similar Group ◽  
Access To Finance ◽  
Business Support ◽  
Service Sectors ◽  
Macroeconomic Environment

The business environment is a profound concern for the state and institutions to make it encouraging to boost entrepreneurship. Given such relevance of the business environment, this paper aims to link selected business environment aspects to business sector. The study identified the perceived differences between sectors in the Czech and Slovak Republics and then a comparison of a similar group of firms. To shape the study, survey-based research planned and conducted in two segments of firm’s (service and non-service), covered 641 enterprises. The current research adopted factor analysis and then t-test and Mann-Whitney test to determine the results. The major findings of the study reveal that the Slovak firms in the service sector scored higher in macroeconomic environment, consumers’ consumption and competition factors and lower in access to finance factor, as compared to their non-service counterparts. However, another key finding indicates that the Czech entrepreneurs’ perception did not statistically differ in any selected aspects of business environment between the firms operating in service and non-service sectors. In all the cases business support was found insignificant. This paper adds to the existing literature in entrepreneurship by offering a better understanding of the linkage between business sector and business environment aspects.

Foreign Direct Investment and Local firm’s Performance

2021 ◽  
pp. 57-73
Author(s):  
M. D Wanjere ◽  
M. Ogutu ◽  
M. Kinoti ◽  
X.N. Iraki
Keyword(s):  
Foreign Direct Investment ◽  
Firm Performance ◽  
Production Technology ◽  
Direct Investment ◽  
Pearson Correlation ◽  
Capital Flow ◽  
Manufacturing Firms ◽  
Primary Data ◽  
Advanced Production ◽  
Technology Marketing

This paper investigates the effect of FDI on performance of manufacturing firms in Kenya. Little is documented about the link between FDI variables of capital flow, advanced production technology, marketing expertise and management know-how and performance of firms. The study’s sought to establish the effect of each individual FDI variables on firm’s performance. It also sought to established the overall effect of the performance manufacturing firms in Kenya. The population of study comprised 100 companies registered with Kenya Association Manufacturing as at the time of data collection in 2019 and that had over 10 percent foreign ownership. The respondents were the CEOs of organization. The study used a structured questionnaire to collect primary data. Descriptive and inferential statistics were both used to analyze the data. Data was pretested for normality, linearity, multicollinearity, autocorrelation and homoscedasticity and the data found to meet most of these preconditions. The Pearson correlation analysis was employed to discern not only the strength but also the direction of the interrelationships involving the variables. The researcher tested the effect of the components of FDI on performance of manufacturing firms. The study developed one hypothesis and four sub hypothesis. The results revealed that there was a statistically significant relationship between FDI and firm performance. This imply that to achieve better firm performance, the government need to come up with policies geared to attracting more FDI into the key sectors of the economy. Keywords: Foreign Direct Investment, Firm Performance, Capital Flow, Advanced Production Technology, Marketing Expertise, Management Knowhow.

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