The Consequences of Foreign Direct Investments in Redefining Bilateral Trade Flow in Nigeria: A Gravity Panel Approach

Most of the Nigerian government’s transformation agenda is geared toward creating and enabling business environments to attract foreign direct investment. Opinions are divided as to the impact of foreign investment on trade and this researcher believed it could be either positive or negative. Hence, this research is to ascertain the magnitude of foreign investment’s impact on Nigeria’s bilateral trade. Integrating foreign direct investment in the gravity model, we applied the PPML technique because of its robustness and ability to recognise zero trade. We segregated foreign investment into three-flow, stock and its annual growth. Our estimation revealed that foreign direct investment stock impacts negatively on bilateral trade flow in Nigeria for both exports and imports and it is robust with the overall sample. Exporters’ foreign direct investment inflow was also revealed to have an impact on bilateral trade in Nigeria. But in all ramifications the magnitude of the negative impact is relatively small but statistically significant reflecting that trade and inward foreign investment are at least substitutes. Nigeria should further encourage inward foreign investment to further stimulate economic growth and aid in creating import substitution.

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Protection of National Sovereignty and Hindering Foreign Investment

AAU JOURNAL of Business and Law ◽

10.51958/aaujblv2i2p1pp1-14 ◽

2017 ◽

pp. 1-14

Author(s):

Badreddine Berrahlia ◽

Keyword(s):

Foreign Direct Investment ◽

Technology Transfer ◽

Foreign Investment ◽

Direct Investment ◽

Foreign Direct Investments ◽

Business Law ◽

National Sovereignty ◽

Investment Projects ◽

Recent Debate ◽

The Impact

The article explores the recent debate regarding the rules of sovereignty and the need to acquire technology through Foreign Direct Investment (FDI) in relation to the Algerian Business Law. The article explores the 51/49 rule as an obligatory condition for direct international partnerhip projects, which requires a majority of Algerian ownership of at least 51 percent in all foreign direct investment projects (FDIP). The current research also investigates the impact of the 51/49 rule on the inflows of the foreign direct investments in Algeria as well as some other countries. The research concludes that there is no evidence that the amendment of the 51/49 rule would lead to technology transfer through the FDI.

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External Sector: Between Congestion and Sanctions—‘Syrian Economy Case, 1987–2018’

Foreign Trade Review ◽

10.1177/0015732520919839 ◽

2020 ◽

Vol 55 (3) ◽

pp. 382-401

Author(s):

Forat Suliman ◽

Homam Khwanda

Keyword(s):

Bilateral Trade ◽

Negative Impact ◽

Trade Flow ◽

Bilateral Trade Flow ◽

Trading Partners ◽

Significant Negative Impact ◽

The Usa ◽

Trade Sector ◽

External Sector ◽

The Impact

Since the outbreak of the Syrian crisis in March 2011, the USA, European Union, Arab League and several other regulatory entities imposed negative economic sanctions on Syria—some of the most comprehensive ever implemented. This article first provides an assessment of Syrian foreign trade sector during the reform period of the 2000s and its impact on economic growth. Second, it estimates the impact of sanctions and conflict on the trade sector of the Syrian economy. The analysis is conducted using a panel-gravity model between Syria and 78 trading partners (1987–2017). Multilateral sanctions and conflict-related disruptions demonstrate a large significant negative impact on Syria-bilateral trade flow by 65 per cent. We attempt to find out whether the Syrian economy was able to divert trade away from Europe and/or conduct de-Europeanisation. Findings confirm that the Syrian economy was unable to divert trade flow to Asian and other countries due to the conflict-related congestion and distance factor. JEL: C33, F10

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Analysis of investment resources’ impact on food security condition

Regional Economy ◽

10.36818/1562-0905-2020-2-8 ◽

2020 ◽

pp. 94-101

Author(s):

Gelena Pruntseva

Keyword(s):

Foreign Direct Investment ◽

Food Security ◽

Foreign Investment ◽

Agricultural Production ◽

Direct Investment ◽

Agricultural Sector ◽

Negative Impact ◽

Positive Impact ◽

Security Mechanism ◽

The Impact

Ensuring food security and developing agricultural production is impossible without investment. At the same time, some scientists note that a significant amount of foreign investment increases the dependence of the domestic economy and enterprises on foreign investors. In addition, subsidies lead to a lack of motivation among entrepreneurs to attract additional investment resources and increase the dependence of production on areas of state support. Some investment models contribute to the deterioration of the environment, and technological advances are not available to small farmers who do not have the financial resources to apply the technology. Therefore, investment is important to ensure the effective development of the agricultural sector and food security mechanism. However, the presence of a significant amount of foreign investment can lead to the dependence of the national economy on investors, which can have a negative impact on the cost of agricultural products, production volumes, exchange rates and purchasing power of the population. The aim of the article is to analyze the impact of investment on the agricultural production as the main component of food security mechanism. To analyze the effectiveness of investment we chose the indicators “Government spending on agriculture”, “Foreign direct investment in agriculture” and the indicator “Agricultural production”. As a result of the analysis, it was found that the impact of government investments on agricultural production is not significant. This trend can be explained by the existing theory that there is no significant positive impact of government investments on the efficiency of agricultural enterprises due to the lack of incentives for farmers to innovate and compete in the market environment. A strong direct link between the indicators “Foreign direct investment in agriculture” and “Agricultural production”, which indicates a significant impact of foreign direct investment on agricultural production, is emphasized.

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Protection of National Sovereignty and Hindering Foreign Investment

AAU JOURNAL of Business and Law ◽

10.51958/aaujbl2018v2i2p1 ◽

2018 ◽

pp. 1-14

Author(s):

Badreddine Berrahlia ◽

Keyword(s):

Foreign Direct Investment ◽

Technology Transfer ◽

Foreign Investment ◽

Direct Investment ◽

Foreign Direct Investments ◽

Business Law ◽

National Sovereignty ◽

Investment Projects ◽

Recent Debate ◽

The Impact

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Institutional Quality and Trade Flow: Empirical Evidence from Malaysia and Other OIC Member Countries in Africa

Insight on Africa ◽

10.1177/0975087820987174 ◽

2021 ◽

pp. 097508782098717

Author(s):

Hammed Agboola Yusuf ◽

Luqman Olanrewaju Afolabi ◽

Waliu Olawale Shittu ◽

Kafilah Lola Gold ◽

Murtala Muhammad

Keyword(s):

Economic Growth ◽

Bilateral Trade ◽

Trade Flow ◽

Estimation Method ◽

Institutional Quality ◽

Likelihood Estimation ◽

Political Stability ◽

Bilateral Trade Flow ◽

World Governance Indicators ◽

The Impact

This article examines the impact of institutional quality on bilateral trade flow between Malaysia and selected 25 African Organisation of Islamic Cooperation (OIC) member countries. Four institutional qualities were selected from World Governance Indicators with other trade predictors from the period from 1985 to 2016. Using gravity model of trade and Poisson pseudo-maximum likelihood estimation method (PPML) technique, the results confirm that government effectiveness, regulatory quality and political stability have an adverse effect on bilateral trade flow among the OIC countries in Africa. On the other hand, these institutional quality variables were considered as a strength for Malaysian economic growth. Therefore, better institutional quality reforms are needed among OIC member countries in Africa in order to accelerate trade, economic growth and development in their region.

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The nexus between financial development and energy consumption: Estimating the role of foreign direct investment, economic growth and urbanization

Energy & Environment ◽

10.1177/0958305x211045375 ◽

2021 ◽

pp. 0958305X2110453

Author(s):

Jaleel Ahmed ◽

Shuja ur Rehman ◽

Zaid Zuhaira ◽

Shoaib Nisar

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Energy Consumption ◽

Financial Development ◽

Latin American ◽

Direct Investment ◽

Negative Impact ◽

Positive Impact ◽

Supply And Demand ◽

The Impact

This study examines the impact of financial development on energy consumption for a wide array of countries. The estimators used for financial development are foreign direct investment, economic growth and urbanization. The study employed a panel data regression on 136 countries with time frame of years 1990 to 2019. The model in this study deploys system GMM technique to estimate the model. The results show that financial development has a significant negative impact on energy consumption overall. Foreign direct investment and urbanization has significant impact on energy consumption. Also, economic growth positive impact on energy consumption its mean that economic growth promotes energy consumption. When dividing further the sample into different groups of regions such as Asian, European, African, North/Latin American and Caribbean countries then mixed results related to the nexus between financial development and energy consumption with respect to economic growth, urbanization and foreign direct investment. The policymakers in these different groups of countries must balance the relationship between energy supply and demand to achieving the sustainable economic development.

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

International Journal of Emerging Markets ◽

10.1108/ijoem-08-2020-0932 ◽

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.

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Impact of foreign direct investment inflows on environmental pollution in Turkey

Global Journal on Humanities and Social Sciences ◽

10.18844/gjhss.v0i0.409 ◽

2016 ◽

Author(s):

Yilmaz Bayar

Keyword(s):

Foreign Direct Investment ◽

Environmental Pollution ◽

Direct Investment ◽

Global Economy ◽

Developed Countries ◽

Foreign Direct Investments ◽

Causality Analysis ◽

Causality Test ◽

The Impact ◽

Foreign Direct Investment Inflows

The globalization accelerated especially as of 1980s and the countries began to integrate global economy and remove the constraints on the flows of goods, services and capital. In this context, the developed countries partly shifted their environmentally hazardous production activities to the developing countries especially by means of foreign direct investments. This study investigates the impact of foreign direct investment inflows on the environmental pollution in Turkey during the period 1974-2010 by using Toda and Yamamoto (1995) causality test. We found that there was a bidirectional causality between foreign direct investment inflows and emissions.Keywords: Foreign direct investment inflows, emissions, causality analysis

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Does Foreign Direct Investment More Important Than Domestic Direct Investment for Export Structure? Evidence from Indonesia

10.21203/rs.3.rs-713874/v1 ◽

2021 ◽

Author(s):

Ariyo DP Irhamna ◽

Ely Nurhayati ◽

Adinda Putri Safira ◽

Galuh Indra Wijaya

Keyword(s):

Time Series ◽

Foreign Investment ◽

Direct Investment ◽

Negative Impact ◽

Positive Impact ◽

Domestic Investment ◽

Fdi Inflows ◽

Export Structure ◽

The Impact ◽

Export Product

Abstract Scholars have long studied the spillover of FDI on trade. However, there has been limited study which spesifically investigate the impact of FDI on the export structure in a developing country. Does FDI more important than domestic investment for export structure? To examine the question, we test the impact of FDI and DDI on the export structure in time series framework, utilizing data on FDI inflows to Indonesia and export data based on product stage over 1992–2017. The export structure is analyzed based on three categories, namely primary product, intermediate product, and final product. Our results show that domestic investment has a negative impact on the primary export product, while foreign investment has a positive impact on the final export product. The result highlights the importance of domestic and foreign investment in export upgrading.

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Modeling the impact assessment of agricultural sector on economic development as a basis for the country’s investment potential

Investment Management and Financial Innovations ◽

10.21511/imfi.16(3).2019.21 ◽

2019 ◽

Vol 16 (3) ◽

pp. 229-240

Author(s):

Alina Bukhtiarova ◽

Arsen Hayriyan ◽

Victor Chentsov ◽

Sergii Sokol

Keyword(s):

Economic Growth ◽

Economic Development ◽

Foreign Direct Investment ◽

Direct Investment ◽

Agricultural Sector ◽

Negative Impact ◽

Manufacturing Sector ◽

Value Added ◽

The Cost ◽

The Impact

In the context of countries integration into the world economic space, agricultural sector is one of the priorities and strategically important sectors of the national economy. Development of instruments aimed to increase investment potential of this sector is therefore an important component of the country’s economy growth. The article proposes a science-based model of the impact of the agricultural sector on the economic development level of countries trying to move towards European integration.It was found that the employment rate (+58.4) has the largest influence on the rate of GDP change in the studied group of countries (Ukraine, Moldova, Georgia, Armenia). The impact of the gross value added of the manufacturing sector on its economic growth is positive (+44.6). The negative foreign direct investment ratio in the model (–40.3) may be due to the fact that the indicator in the studied countries is still largely influenced by the intervention of the state mechanism, significant uncertainty and risk, which is a deterrent to the overall economic development. An important result of the study was that foreign direct investment had a negative impact on economic growth in developing countries. Further development of the investment potential of a country’s agricultural sector provides for a radical acceleration of scientific and technological progress and, on this basis, a reduction in the cost of a unit of agricultural products and food and an increase in their competitiveness in the domestic and world markets.

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