The influence of foreign direct investment on the urban–rural income gap: evidence from China

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ying Song ◽  
Yi Zhang ◽  
Yafei Wang ◽  
Bowen Zhang ◽  
Jiafu Su
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Mainland China ◽  
Short Term ◽  
Content Type ◽  
Income Gap ◽  
Rural Income ◽  
Urban Rural ◽  
The Impact

PurposeTaking 30 provincial samples from 2001 to 2017 in mainland China as the research objects, this paper aims to evaluate the impact and effects of foreign direct investment (FDI) on the urban–rural income gap and reveals heterogeneity across regions.Design/methodology/approachFirstly, the Theil index is used to measure the income gap between 30 provinces in mainland China from 2001 to 2017, then the spatial econometric model is used to empirically test the impact of foreign direct investment on China’s urban–rural income gap and its heterogeneity across regions. Finally, a robustness test is performed.FindingsThe results show that there is a significant inverted U-shaped relationship between FDI and the urban–rural income gap in China. That is, FDI expands the urban–rural income gap in the short term and helps to converge it in the long term. In the eastern region, FDI has a convergence effect on the urban–rural income gap in the short term, which increases the long term. However, in the central and western regions, the relationship between FDI and urban–rural income gap has a weak inverted U shape.Originality/valueBy assessing the impact of FDI on the urban–rural income gap, this work provides decision-making support for China and other developing countries to improve investment policies and income distribution policies.

scholarly journals PENGARUH PENANAMAN MODAL ASING TERHADAP PERTUMBUHAN EKONOMI DI INDONESIA

Media Ekonomi ◽  
2016 ◽  
Vol 24 (1) ◽  
pp. 63
Author(s):  
Fajar Bimantoro ◽  
Mona Adriana S
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Financial Crisis ◽  
Direct Investment ◽  
Global Financial Crisis ◽  
Consumer Price Index ◽  
Impulse Response Function ◽  
Short Term ◽  
The Impact

<em>The present study aimed to analyze the relationship between the level of foreign direct investment to Indonesia's economic growth in the period 1991-2014.Fokus of the present study was to analyze the short-term relationship between foreign direct investment and economic growth Indonesia. In addition, along with the financial crisis 2008 global bit much negative of Indonesia affected by the global economic slowdown due to the crisis. This prompted the present study was to also perform forecasting of the impact of global financial crisis on foreign direct investment and relation to economic growth. To answer these questions, this research chose VAR Vector Auto Regression or as a method to answer the research questions. Gross Domestic Product (GDP), Consumer Price Index, BI rate, and the Exchange Rate, the variables used in this research. The estimation results of the VAR indicate that direct investment from abroad did not have an impact on economic growth in the long term but has a strong bond in the short term against the growth of economics. This indicates that foreign investment into Indonesia increasingly quality in promoting economic growth. In addition, the results of forecasting using impulse response function indicates there will be the tendency of a decrease in the level of foreign direct investment and economic growth in Indonesia.</em>

scholarly journals Impact of Foreign Direct Investment on Domestic Investment in Developing Countries

2020 ◽  
Vol 6 (9) ◽  
pp. 256-266
Author(s):  
A. Mamatkulov
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Developing Economies ◽  
Negative Impact ◽  
Domestic Investment ◽  
Short Term ◽  
Total Investment ◽  
The Impact

Author analyzes the impact of foreign direct investment on domestic investment in host developing countries and checks whether a foreign direct investment has a “positive” or “negative” impact on domestic investment, as well as evaluating the impact of selected variables on this relationship. Using a full sample, the main conclusion of this study is that FDI does have a positive (crowding out) effect on domestic investment in this sample of developing economies. In the short term, an increase in FDI by one percentage point as a percentage of GDP leads to an increase in total investment as a percentage of the host country’s GDP of about 10.7%, while in the long term this effect is about 31% dollar terms, one US dollar represents us 1.7$ of total investment in the short term and us 3.1$ in the long term. Based on the results of this study, it was once again proved that inflation hinders domestic investment in host countries by 0.04% and 0.12% in the short and long term, respectively.

scholarly journals The Impact of Foreign Direct Investment on Economic Diversification: The Case of the Republic of Congo

2021 ◽  
Vol 7 (03) ◽  
Author(s):  
Jean Anaclet ◽  
Lauric Ngouembe ◽  
Grâce Fleurbellia Domba Biongo
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Political Stability ◽  
Short Term ◽  
Economic Diversification ◽  
Republic Of Congo ◽  
The Republic ◽  
The Impact

The objective of this work is to examine the effects of foreign direct investment on the diversification of the Congolese economy. The estimation results from the ARDL process, spanning the period 1995 to 2016, showed that FDI is a means of diversifying the Congolese economy in the short term. In the long term however, FDI is not a sufficient factor for the diversification of the Congolese economy. Thus, this research has revealed the importance of integrating political stability given that the effects of FDI on diversification also depend on the quality of the institutions.

scholarly journals The Impacts of Human Resources and Foreign Direct Investments to Vietnam’s Economic Growth

2018 ◽  
Vol 8 (4) ◽  
pp. 125
Author(s):  
Nguyen Van Huong ◽  
Dang Quy Duong ◽  
Do Thi Thu Thuy
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Human Resources ◽  
Direct Investment ◽  
Opposite Effect ◽  
Short Term ◽  
Short And Long Term ◽  
The Impact

Research on human resources, foreign direct investment and economic development are important issues in assessing the effectiveness of employment as well as attracting foreign direct investment (FDI) in the economy. In this study, the author analyzes the impact of human resource factors and FDI on economic growth in Vietnam from 1990 to 2017. By regression analysis based on the ARDL model, the result shows FDI has only a positive effect on economic growth in the short term but has the opposite effect in the long term. At the same time, unemployment rates have the opposite effect on economic growth in the short term. Average life expectancy does not affect economic growth in both the short and long term. From this result, the author also offers some suggestions for economic development in both the short and long term.

scholarly journals The Impact of Foreign Direct Investment, Human Capital on Labour Productivity in Vietnam

2019 ◽  
Vol 11 (5) ◽  
pp. 97 ◽  
Author(s):  
Nguyen Tan Vinh
Keyword(s):  
Human Capital ◽  
Foreign Direct Investment ◽  
Labor Productivity ◽  
Direct Investment ◽  
Positive Impact ◽  
Labour Productivity ◽  
Research Result ◽  
Short Term ◽  
The Impact

Vietnam is a country which has an attractive level of attracting foreign direct investment (Hereafter FDI) in the region with many preferential policies for investors. FDI attraction aims to help economic growth as well as increase the country&#39;s labour productivity. Therefore, the author conducted research to the impact of FDI and human capital on labor productivity of Vietnam. With data analysis techniques using ARDL model with data collected from 1990 to 2017, research result shows that FDI has a positive impact on labor productivity in short term and long term. The factor of university qualification (human capital) only has a positive impact on labor productivity in the long term.

scholarly journals The Impact of Foreign Direct Investment on Gross Domestic Product in Iraq During the Period (2006 - 2015)

2021 ◽  
Vol 10 (1) ◽  
pp. 382
Author(s):  
Shivan H. Ali ◽  
Shivan A. Jameel
Keyword(s):  
Foreign Direct Investment ◽  
Gross Domestic Product ◽  
Direct Investment ◽  
Domestic Product ◽  
Short Term ◽  
The World Bank ◽  
Short Run ◽  
Independent Variable ◽  
The Impact

The paper aims at examining the impact of Foreign Direct Investment on Gross Domestic Product in Iraq over the period 2006-2015. Data have been collected from the World Bank database. For the purpose of analyzing data, the study applied Foreign Direct Investment (FDI) Net Inflows as an independent variable while Gross Domestic Product (GDP) as a proxy for economic growth as a dependent variable. The results of the study found that all of the variables under study are non-stationary at the level while stationary at first differenced by utilizing unit-root tests (ADF). The findings of Johansen Test for Co-integration showed that there is no long-term relationship among variables. Other findings of the paper revealed that, in short term, it is concluded that FDI Granger-Causes GDP and there is a short-run causality running from FDI to GDP. The research recommended that Iraq has to pay more attention to improve the level of education sectors and financial sector and to empower human capital. It also has to decrease lending rate, transportation and instability terms of political and economic environment as well as to improve liberalized market environment.

The Spillover Effects from Foreign Direct Investment (FDI) on Labor Productivity: Evidence from Indonesian Manufacturing Sector

2019 ◽  
Vol 10 (1) ◽  
pp. 19-30
Author(s):  
Riesta Karentina
Keyword(s):  
Foreign Direct Investment ◽  
Labor Productivity ◽  
Direct Investment ◽  
Spillover Effects ◽  
Long Term Effects ◽  
Short Term ◽  
Domestic Firms ◽  
Fdi Spillovers ◽  
The Impact

Despite growing concern regarding the productivity benefits of foreign direct investment (FDI), few studies have been conducted on the impact of FDI spillovers on domestic firms’ labor productivity in Indonesia. This study aims to do three things. First, it examines the effect of FDI spillovers on domestic firms’ productivity. Second, it investigates the short-term and long-term effects of FDI spillovers on domestic firms’ productivity. Third, it explores the impact of FDI spillovers on domestic firms’ productivity in different groups of industries based on their factor intensity. Micro-level panel data covering about 20,000 medium and large manufacturing establishments in each year over the period 2010 and 2014 was employed. This study suggests that, within the same industry, horizontal spillovers are associated with domestic firms’ productivity: this relationship is negative in the short-term but positive in the long-term. This study’s findings also demonstrate that, across industries, there are negative backward spillover effects on domestic firms’ productivity. In addition, this study points out that FDI spillovers affect domestic firms’ productivity effectively when they are capital-intensive. Therefore, the results imply the importance of maintaining a long-term perspective toward foreign-invested firms in Indonesia and the government needs to stimulate policies that can enhance domestic firms’ capacity to supply intermediate materials and capital to foreign firm in downstream market by truncating the technology gap between foreign and domestic firms.

India’s vaccine diplomacy brings money and influence

2021 ◽  
Keyword(s):  
United States ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
The United States ◽  
Active Pharmaceutical Ingredients ◽  
Content Type ◽  
Pharmaceutical Ingredients ◽  
The World

Significance Last week, its partners in the ‘Quad’ grouping -- the United States, Japan and Australia -- agreed to help increase its vaccine manufacturing and exporting capacity. Each of the Quad members is wary of China, which like India is gifting and selling coronavirus jabs around the world. Impacts India’s manufacturing sector will attract more foreign direct investment. Greater cooperation over supply chains will help strengthen India-Australia ties. Indian pharma will in the long term aim to ease dependence on imports of active pharmaceutical ingredients from China.

Does foreign direct investment influence R&D activity in the host country? Evidence from Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Van Ha ◽  
Mark J. Holmes ◽  
Gazi Hassan
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Probit Model ◽  
Innovation Activity ◽  
Heckman Selection Model ◽  
Content Type ◽  
Domestic Firms ◽  
The Impact ◽  
Local Firms

PurposeThis study focuses on the linkages between foreign direct investment and the research and development (R&D) and innovation activity of domestic enterprises in Vietnam.Design/methodology/approachThe Heckman selection model approach is applied to a panel dataset of nearly 7,000 Vietnamese firms for the 2011–2015 study period to investigate the impact of foreign presence on the R&D of local firms through horizontal and vertical linkages. Probit model estimation is employed to examine how foreign investment influences the innovation activity of local companies.FindingsWhile there are a small number of firms carrying out R&D activities in Vietnam, foreign or joint domestic–foreign venture firms are less inclined than domestic firms to undertake R&D. Domestic factors that include capital, labor quality, location and export status of firm have a significant effect on the decision of domestic firms to participate in R&D activity. Only forward linkages and the gross firm output are found to have an impact on the R&D intensity of domestic enterprises, while other factors appear to have no significant influence on how much firms spend on R&D activities.Practical implicationsIn order to promote the R&D activity of domestic firms, policy should focus on (1) the backward linkages between local firms in downstream sectors with their foreign suppliers in upstream sectors, and (2) the internal factors such as labor, capital or location that affect the decisions made by domestic firms.Originality/valueGiven that foreign investment may affect R&D and innovation activity of local firms in host countries, the impact is relatively unexplored for many emerging economies and not so in the case of Vietnam. The availability of a unique survey on Vietnamese firm technology and competitiveness provides the opportunity to address this gap in the literature.

scholarly journals How does the urban–rural income gap affect the quality of China’s economic growth?

2018 ◽  
Vol 1 (1) ◽  
pp. 136-148 ◽  
Author(s):  
Baoping Ren ◽  
Xiaojing Chao
Keyword(s):  
Economic Growth ◽  
Industrial Structure ◽  
Empirical Test ◽  
Theoretical Interpretation ◽  
Content Type ◽  
Income Gap ◽  
Rural Income ◽  
Urban Rural ◽  
Growth Quality

Purpose Based on the theoretical definition of the quality of economic growth as well as the availability and reliability of the given data, the purpose of this paper is to build an evaluation system of a regional economic growth quality on three levels: conditions, processes and results. Design/methodology/approach From the perspective of economic quality, this paper offers a theoretical interpretation on how the urban–rural income gap affects the quality of economic growth and takes an empirical test on the sample panel data from 30 provinces and regions through difference GMM and system GMM models. Findings The results show that the excessively large income gap will influence economic growth in terms of the foundation, operation and the outcome, thereby, restricting the quality of economic growth. In addition, investments in human and physical capital and improvements in terms of transport infrastructure, industrial structure and economic openness play an active role in economic growth quality, whereas government expenditure scale, financial development and the deviation of industrial structure have a negative effect. Originality/value There has been a substantial amount of experience and evidence on the research about the issue of China’s income distribution and the quantity of economic growth, whereas there are relatively fewer discussions about the income distribution and the quality of economic growth. This paper, based on what has been mentioned above, tries to give a theoretical interpretation and an empirical test to describe the relationship between urban–rural income gap and the quality of economic growth from the quality point of view.

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