scholarly journals Analysis of the Cobb-Douglas Production Function as a Tool to Investigate the Impact of FDI Net Inflows on Gross Domestic Product Value in Poland in the Period 1994–2012

2014 ◽  
Vol 5 (4) ◽  
pp. 169-190 ◽  
Author(s):  
Aneta Kosztowniak
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Production Function ◽  
Point Of View ◽  
Foreign Direct Investments ◽  
Fdi Inflows ◽  
Fixed Capital Formation ◽  
Empirical Point ◽  
The Impact ◽  
Douglas Production Function

The purpose of this paper is to analyse the impact of foreign direct investments net inflows on changes in GDP value in Poland in the period between 1994 and 2012 with the use of the Cobb-Douglas production function. The paper consist of five parts. Parts I and II present some aspects of the FDI influence on economic growth from the theoretical and empirical point of view. Part III defines conditions indispensable for the positive FDI impact on the economy of the host country. Part IV outlines changes of FDI flows in Poland in the period of 1994-2012. Part V includes the main assumptions of the Cobb-Douglas production function and an estimate of changes in GDP value for Poland in the period 1994–2012 with the use of the VECM. The factors significant for economic growth are also identified, including the significance of the net FDI inflows. Eventually, the effect of gross fixed capital formation, employment, FDI net inflows, exports and R&D on changes in the GDP value are determined.

scholarly journals Economic Growth at the Expense of Environmental Degradation: Evidence from the Philippines

2021 ◽  
Vol 3 (2) ◽  
pp. 269-287
Author(s):  
Coleen Joyce De Robles ◽  
Jose Rafael De Leon ◽  
Carlos Manapat
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Environmental Kuznets Curve ◽  
The Philippines ◽  
Domestic Product ◽  
Kuznets Curve ◽  
Foreign Direct Investments ◽  
Environmental Laws ◽  
Fdi Inflows ◽  
Study Support

This study presents an empirical analysis of the impacts of three macroeconomic variables namely, Gross Domestic Product, Foreign Direct Investment, and Urban Population on the emissions of CO2 in the Philippines from the period of 1970 to 2018. The results reveal that Gross Domestic Product and Foreign Direct Investments exhibit a statistically significant relationship with CO2 emissions. The findings of this study suggest that the Philippines’ reliance on high-polluting industries as drivers of economic growth will only worsen its environmental quality. Moreover, its weak environmental laws provide foreign investors the opportunity to exploit the environment in exchange for FDI inflows to the country. Furthermore, the results of this study support the scale effect in the Environmental Kuznets Curve hypothesis, as well as the Pollution Haven Hypothesis.

scholarly journals ASSESSMENT OF FACTORS OF SUSTAINABLE DEVELOPMENT OF THE AGRICULTURAL SECTOR USING THE COBB-DOUGLAS PRODUCTION FUNCTION

2021 ◽  
Vol 7 (2) ◽  
pp. 37-49
Author(s):  
Olena Vasyl’yeva
Keyword(s):  
Economic Growth ◽  
Sustainable Development ◽  
Production Function ◽  
Agricultural Sector ◽  
Value Added ◽  
Scale Economy ◽  
Pollutant Emissions ◽  
Gross Value Added ◽  
The Impact ◽  
Douglas Production Function

The aim of the article is to assess the impact of various factors (forms of capital) on the formation of gross value added and gross output of the agricultural sector of Ukraine’s economy under sustainable development using the modified Cobb-Douglas production function. Methods. The theoretical and methodological basis of the study consisted of the papers on economic growth, sustainable development and forecasting by scientists in classical and modern economics. A monographic method was used to cover the scientists’ views on the research issue. The parameters of the production function describing how variables (physical and human capital, pollutant emissions) act on gross value added and gross output of the agricultural sector of Ukraine were estimated on the basis of the modified Cobb-Douglas production function. Statistics for agriculture covering the period 2008-2018 were used for the assessment. The correlation and regression analysis was used to determine and verify the parameters of the production function. Equations of balance and construction of isoquants were used to foresight the optimal combinations of factors of the production function. Results. Using the Cobb-Douglas production function, econometric analysis with eco-socio-economic factors has shown that economic growth in agriculture is associated with improved quantitative and qualitative characteristics of labour potential, growing capital investment and reducing pollutant emissions. Estimation of the elasticity coefficients of the constructed Cobb-Douglas function (the sum exceeds 1) justifies that the economic development of agriculture mainly contains the features of a large-scale economy: modern level of science and technology provides advantageous expanding production to increase output. Practical significance. The constructed models allow to forecast assessment of the development of the agricultural sector’s components and can be used to develop the basic directions of the state agricultural policy to manage the formation and use of resource potential. Value/originality. Modelling how the resource factors act on output using the method of construction and calculation of parameters of the production function allows to predict the sustainable development of agricultural production under quantitative and qualitative changes in the use of labour and capital, as well as environmental factors. Further research ensures obtaining a dynamic multi-factor model of sustainable development of the agricultural sector and determining the main mechanisms of influence on the levers of economic growth.

scholarly journals The Impact of Foreign Direct Investments (FDIs) on Economic Growth: The Solow Model in the Case of Albania

2016 ◽  
Vol 4 (1) ◽  
pp. 152 ◽  
Author(s):  
Llesh Lleshaj ◽  
Arben Malaj
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investments ◽  
Capital Investments ◽  
Solow Model ◽  
Fdi Inflows ◽  
Explanatory Variables ◽  
Model Following ◽  
Long Run ◽  
Domestic Capital ◽  
The Impact

In the developing countries, including Albania, attracting FDIs remains a government priority towards development of investments and the whole economy. Therefore, the main objective of this paper is to analyze the impact of FDIs on economic growth (GDP level) in Albania. The analysis is based on the neoclassical growth model, following the Solow model. The dependent variable in the model is the GDP level and independent variables are: capital (foreign and domestic capital investments) and labor (average salary) for the period 1996-2013 with quarterly data. The results of the econometric analysis indicate that the Solow model is applicable in the Albanian economy, showing a positive correlation which is statistically significant between the explanatory variables and the dependent variable both in the short and long run. The impact of FDIs on GDP is several times smaller than the impact of domestic capital investments. This elasticity can be explained by the lower level of FDI inflows compared to the domestic capital investments and the limitations in evaluating the "endogenous" growth of FDIs. Whereas the analysis of the sector and country of origin concentration of the FDI stock is done using the Herfindal - Hirschman index for the period 2007-2013 and the results determine a significant concentration of FDI stock, based on three sectors and a few countries of origin.

scholarly journals Impacts of Seaport Investment on the Economic Growth

2016 ◽  
Vol 28 (4) ◽  
pp. 365-370 ◽  
Author(s):  
Tahar Ammar Jouili ◽  
Mohamed Anis Allouche
Keyword(s):  
Economic Growth ◽  
Production Function ◽  
Growth Rates ◽  
Econometric Model ◽  
Public Investment ◽  
Economic Sectors ◽  
The Public ◽  
Economic Growth Rates ◽  
The Impact ◽  
Douglas Production Function

The aim of this paper is to estimate the impact of seaports investment on the economic growth. Seaports are seen by many governments as an important factor in the strengthening of the economies. During the last two decades, the Tunisian succeeding governments have been allocating a great amount of money to develop seaport infrastructures. However, the Tunisian economy witnessed fluctuations in the economic growth rates and decrease in the rate of employment during the same period of time. This study used an econometric model by employing the Cobb-Douglas production function. The sample was composed of Tunisia's economic sectors (manufacturing, services and agriculture) over the period 1983-2011. The results of the study show that the public investment in seaport infrastructures has apositive influence on Tunisian economic growth. The study also revealed that the biggest beneficiary from the seaport investment infrastructure is the service sector. This paper aims to estimate the impact of seaports investment on the economic growth. The seaports are seen by many governments as an important factor in the strengthening of the economies. During the last two decades, the Tunisian succeeding governments were allocating a great amount of money to develop seaports' infrastructures. However, the Tunisian economy witnessed fluctuating in the economic growth rates and decreased in the rate of employment during the same period of time. This study used an econometric model by employing the Cobb-Douglas production function. The sample composed of Tunisia's economic sectors (manufacturing, services and agriculture) over the period 1983-2011. The results of the study show that the public investment in seaports' infrastructures has a positive influence on Tunisian economic growth. The study also revealed that the biggest beneficiary from the seaports investment infrastructure is the services sector.

Сobb-Douglas Production Function: Myth and Reality

2014 ◽  
Vol 3 (4) ◽  
pp. 54-60
Author(s):  
Юсим ◽  
Vyacheslav Yusim ◽  
Прокопьев ◽  
Aleksandr Prokopev
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Production Function ◽  
Economic Systems ◽  
Technological Factors ◽  
Definition Of ◽  
Impact Of Technology ◽  
The Impact ◽  
Douglas Production Function

The article considers the problem of assessing the impact of technology on the dynamics of economic development and critically evaluates the best-known production function — the Cobb-Douglas function, which is the basis of many models seeking to explain the sources of economic growth. Meanwhile the provision is argued that the methodological solution to this problem exists and reveals the essence of the author’s approaches to the definition of the role of technological factors in the development of economic systems.

scholarly journals THE IMPACT OF REPETITIVE XENOPHOBIC ATTACKS ON FUTURE FOREIGN DIRECT INVESTMENT: A CASE OF SOUTH AFRICA

2021 ◽  
pp. 14-20
Author(s):  
Wellington Garikai Bonga
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Capital Inflows ◽  
Foreign Direct Investments ◽  
Investment Climate ◽  
Fdi Inflows ◽  
Long Term Impact ◽  
The Impact

The debate of the link between xenophobia and importance of foreign direct investment is of interest. A phrase says it all, “One cannot want foreign money and hate foreign businesses at the same time.” Does South Africa, as a country, love foreign investment, and by extension, foreign investors? A ‘yes’ and a ‘no’ answer will do for this question. Foreign direct investments are the most desirable form of capital inflows to emerging and developing countries. Many benefits are linked to accrue to a nation because of FDI inflows. FDI is climatic sensitive, and usually goes where it is wanted most and where conducive environment prevails. The South African nation is dominated by unending violence that also targets foreigners including their businesses. Effective policies to curb xenophobia seems to be lacking. There exist xenophobia denialism among the political leaders, making it more difficult to halt the problem. Letting the nation continue turning into a hostile destination for foreigners may pose a great investment challenge in the longer term. The path that South Africa is walking today, of protecting and failing to address issues of xenophobia, have a long term impact to investment in the country. Conflicts and violence attacks, hence xenophobia, continue to affect FDI flows several years into the future. The trend of net FDI has already shown a downward trend that may be attributed to issues of unrest persistent in the economy. The study strongly indicate that repetitive xenophobic attacks significantly impact future FDI inflows negatively. Immediate action is required to minimize the damage caused by xenophobia in the country. Investment climate restoration is required to ensure favorable economic growth path for the country. KEYWORDS: Economic Growth, Foreigners, Foreign Direct Investment, Instability, Investment, Investment Climate, Socio-economic Development, Violence, Xenophobia, South Africa

Is the Ukrainian economy’s absorptive capacity appropriate to attract foreign direct investment and facilitate economic growth?

2018 ◽  
Vol 13 (6) ◽  
pp. 1928-1947
Author(s):  
Svitlana Shevelova ◽  
Svitlana Plaskon
Keyword(s):  
Higher Education ◽  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Production Function ◽  
Transition Economies ◽  
Absorptive Capacity ◽  
Direct Investment ◽  
Content Type ◽  
Douglas Production Function

Purpose Despite an increasing volume of literature focussed on foreign direct investment (FDI) in transition economies, there has been little research into FDI in Ukraine. The relationship between the inflows of FDI (IFDI) and absorptive capacity (AC) has been under-researched in the peripheral transition countries like Ukraine. The purpose of this paper is to analyse the appropriateness of the Ukrainian economy’s AC to attract IFDI and facilitate economic growth with a particular focus on AC factors, such as the potential of human resources to absorb innovation and benefit from research and development (R&D) expenditure. Design/methodology/approach This study presents a thoughtful research design: there is an analysis of the AC framework for justification and selection factors that allows a measurement of the potential of Ukraine’s AC to attract and exploit IFDI. The study uses data from 25 regions in Ukraine for the 1996–2015 period. To estimate the effects of IFDI on Ukrainian economic growth, a Cobb–Douglas production function is used. As an appropriate instrumentation technique for dynamic panel data, the Generalised Method of Moments is used to provide unbiased and efficient estimates of the results. The application of the interactive term in this study allows the authors to indicate the existence of complementarities between IFDI and human capital, in particular with higher education, that afford opportunity to absorb new technologies and benefit from IFDI. Findings The resulting model indicates that R&D expenditure benefited very significantly in evolving country’s innovation system due to economic growth. Physical and human capital has not been used effectively in Ukraine to facilitate economic growth and attract IFDI. The number of patents is not significant in all of the regression models. Moreover, IFDI in Ukraine for the 1996–2015 period did not significantly impact on economic growth. However, the AC of human capital, in particular those with a higher education, is relatively relevant to benefit from IFDI. Practical implications The findings have important implications for governmental policy, which should be based on improving the business climate, a strategy for digital development, innovation, migration, institutional and regional policies aimed at the achievement of country’s sustainable economic growth. The government should increase R&D expenditure as an important factor of gross domestic product growth and introduce grants, loans and other financial supports for encouraging students to continue university education. Originality/value The originality and value of this paper is empirical and methodological. The empirical results of this study enable a conclusion about the appropriate level of the country’s absorptive capability required to benefit from IFDI. The paper also contributes to the existing academic debate and proves that despite the well-established theoretical framework for the IFDI–AC economic impact context, a new theorisation is needed to explore the full complexity of the country’s explicit relationship between AC and IFDI. Future research should be focussed on examining not only groups of countries but also distinctly the country’s explicit relationship between AC and IFDI with the particular attention for the under-researched countries: the peripheral transition economies to discover new research niches for theory building. This study presents an original methodological approach with a careful justification of the theoretical framework for hypothesis development, an appropriate sample and an original application of seminal research methods based on the Cobb–Douglas production function. This study proves that the interactive term, which allows indication of the existence of complementarities between IFDI and other variables, is appropriate for measuring AC in countries with smaller amounts of IFDI.

scholarly journals WORLD EXPERIENCE: COMMERCIAL BANK CREDIT AND ECONOMIC GROWTH RELATIONSHIP

2020 ◽  
pp. 6-19
Author(s):  
Davit Aslanishvili
Keyword(s):  
Economic Growth ◽  
Large Scale ◽  
Banking Sector ◽  
Point Of View ◽  
Bank Credit ◽  
Main Function ◽  
Economic Point ◽  
Market Factors ◽  
Credit Portfolio ◽  
The Impact

This research focuses on the problem of large scale disproportion of success in the development of the banking sector and mostly unsuccessful development of the real sector of the economy. It should be noted that this disproportion is a subject of consideration in contemporary economic literature and our research is an attempt to broaden the issue and share ideas inside the international scientific circles. The main problem in the research is the impact of the banking sector's credit portfolio and the functioning of credit markets on the economic growth of the country. In this regard, it is very important to identify, study the macroeconomic stabilization and accelerated economic growth of the country and analyse the impact mechanisms of the credit market factors on economic growth. The conclusion that combines many of the research and opinions given in the survey can be as follows: From the economic point of view, the main function of banks is to increase the financing/lending of funds as the core point to increase investments in the economy. Thus, the development of the country in economic terms depends on the increase of investments. At present, it is in the hands of the banking sector whether to lead us to economic immobility or to accelerate the country's economic development through efficient allocation of resources.

scholarly journals Economic Growth of Asia Pacific Countries

2018 ◽  
Vol 2 (1) ◽  
pp. 52-60
Author(s):  
Nabaz T. Khayyat ◽  
Sherwan Kafoor
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Trade Openness ◽  
Government Expenditure ◽  
Asia Pacific ◽  
Tax Rate ◽  
Education And Health ◽  
Fixed Capital Formation ◽  
Main Driver ◽  
The Impact

This empirical study examines the determinant of economic growth among Asia Pacific countries. While many other studies focused on specific economies with particular determinants identified from previous studies, this study expands the boundaries of countries to examine different factors that are expected to affect the economic growth in Asia Pacific countries. Estimation results of this study are based on the analysis of a panel data for the period 1994–2011. The impact of total population, industry share of GNI, interest rate, gross fixed capital formation, and tax rate are statistically examined to be strongly significant for the whole sample. In the case of government expenditure and trade openness, they are examined to be significant to some degree. Finally, though human capital is expected to be the main driver of economic growth, the result from correlation analysis revealed that there is a high correlation between expenditure on education and health. To show the impact of human capital on economic growth in Asia Pacific countries, estimation with years of schooling may enhance the study instead of using expenditure on education and health.

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