scholarly journals Does Aid Matter for Foreign Direct Investment in ECOWAS: Investigating The Infrastructure Channel?

2021 ◽  
Author(s):  
KENNETH ONYE ◽  
GODWIN BASSEY ◽  
ALEX IRIABIJE ◽  
LIONEL EFFIOM
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Energy Transport ◽  
Structural Equations ◽  
Development Assistance Committee ◽  
Host Countries ◽  
Aid Allocation ◽  
Economic Infrastructure ◽  
Positive Effect ◽  
Robust Evidence

Abstract We ask the data whether and how aid targeted at specific sub-categories of economic infrastructure could assist ECOWAS economies to attract higher Foreign Direct Investment (FDI) inflow via improvement in infrastructure in Water Supply and Sanitation (WSS), energy, transport, and ICT. By relying on the 3SLS estimation technique that is able to explicitly account for dependencies between 3 structural equations on the allocation of targeted aid, the determinants of infrastructure, and the determinants of FDI – we found quite interesting results. First, aid targeted at infrastructure indicates strong positive effect on the countries’ infrastructure endowment, as expected. Second, there is robust evidence that aid promotes FDI but, surprisingly, not necessarily through the infrastructure channel. Targeted aid appears to exert a positive and direct knock-on effect on FDI - apparently, because investors anticipate the positive effect that targeted aid is almost always inclined to produce on host countries’ infrastructure endowment. Finally, aid allocation by Development Assistance Committee donors seems to have primarily been merit-based, followed by weaker evidence for ‘need’. Therefore, we recommend more need-based aid allocation particularly in economies where initial infrastructure endowment is minimal. There is also need for extended effort at index construction (e.g., index of infrastructure need) and data collection to drive country-case studies. This should identify the transmission channel from aid to FDI and how the associated binding constraints could be overcome.

Autocratic time horizons and the growth effect of foreign direct investment

2019 ◽  
Vol 20 (3) ◽  
pp. 143-161 ◽  
Author(s):  
Daehee Bak ◽  
Chungshik Moon
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Positive Influence ◽  
Policy Preferences ◽  
Growth Effect ◽  
Host Countries ◽  
Time Horizons ◽  
Fdi Spillovers ◽  
Positive Effect

AbstractThe positive influence of foreign direct investment (FDI) on host countries' economic growth has been widely debated. Given the mixed empirical evidence, scholars have sought to find the economic preconditions under which FDI spillovers are likely to occur and facilitate economic growth in the host countries. Those preconditions are not exogenously dictated but largely shaped by governments' policy preferences. Particularly in autocracies, an autocrat's policy preferences are the driving force that determines whether a host country is likely to be equipped with growth-friendly institutions and policies. We argue that such economic institutions and policies are dependent on the time horizons of autocrats in power. Our empirical analysis covering 64 autocratic countries from 1970 to 2005 supports our main argument that FDI has a positive effect on growth when autocratic time horizons are sufficiently long, and positive FDI spillovers mainly occur through the protection of property right institutions.

scholarly journals ANALISIS PENGARUH REMITANSI, INVESTASI ASING LANGSUNG, IMPOR DAN PERTUMBUHAN EKONOMI DI INDONESIA

2020 ◽  
Vol 2 (4) ◽  
Author(s):  
Regina Septriani Putri ◽  
Ariusni Ariusni
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Positive Impact ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
Positive Effect

Abstract : This study examined and analysis the effect of remittances, foreigndirect investment, imports, and economic growth in Indonesia in the long run andshort run. This study using Error Correction Model (ECM) method and using theannual time series data from 1989 to 2018. This study found that: (1) remittancehave an insignificant positive effect on economic growth in the long run and shortrun,(2)foreign direct investment have a significant positive impact on economicgrowth in the long run and short run, (3) import have an insignificant positiveimpact on economic growth both in the long run and short run. To increase theeconomic growth in the future, this study suggests the government to decresingimports of consume goods and increasing the inflow of capital goods, rawmaterial goods, remittances and foreign direct investment.Keyword : Remittance, Foreign Direct Investment, Import, Economic Growth andECM

scholarly journals Aid for Trade Flows and Recipient-Countries’ Integration into the World Market for Services Exports: Do Merchandises Exports and Foreign Direct Investment Inflows Matter?

2020 ◽  
pp. 2350001 ◽  
Author(s):  
Sena Kimm Gnangnon ◽  
Susana Del Mar Ramirez Ramirez
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Export Performance ◽  
World Market ◽  
Fdi Inflows ◽  
Performance Effect ◽  
The World ◽  
Aid For Trade ◽  
The Empirical Analysis ◽  
Positive Effect

An important literature on the recipient-countries’ export performance effect of Aid for Trade (AfT) flows has focused on the goods side. The few existing studies on the services exports effects of AfT interventions have reached mixed results, reflecting a positive or weak effect. This study aims to complement these few studies by examining the effect of AfT flows on recipient-countries’ share of services exports in the world services exports (‘services export integration’), including through two main channels: their share of merchandises exports in the world merchandises exports (‘merchandises export integration’) and the size of Foreign Direct Investment (FDI) inflows. The empirical analysis, based on a sample of 105 countries over the period 2002–2016, has shown that these two channels definitely matter for the effect of AfT flows on countries’ services export integration. Specifically, by fostering countries’ merchandises export integration, AfT flows can promote their services export integration. Furthermore, promoting FDI inflows enhances the positive effect of AfT flows on countries’ services export integration.

scholarly journals Does Monetary Policy and Foreign Direct Investment Have an Influence on the Performance of Stock Market: Further Empirical Evidence from Ghana

2020 ◽  
Vol 2 (2) ◽  
pp. 161-176
Author(s):  
Opoku Adabor ◽  
Emmanuel Buabeng
Keyword(s):  
Monetary Policy ◽  
Foreign Direct Investment ◽  
Stock Market ◽  
Direct Investment ◽  
Market Performance ◽  
Empirical Literature ◽  
Long Run ◽  
Stock Market Performance ◽  
Short Run ◽  
Positive Effect

Monetary policy, foreign direct investment, and the stock market continue to dominate in discussions in developing countries. However, the linkage between the three variables in empirical literature remains unclear. This study aims to test two separate hypotheses: Firstly, the study examines the effects of monetary policy on stock market performance in Ghana. Secondly, the study also empirically investigates the effect of foreign direct investment on stock market performance in Ghana. Autoregressive Distributed Lag (ARDL) model was employed as an estimation strategy to examine the short and long-run effects using annual time series data from 1990 to 2019. The study revealed that monetary policy rate and money supply exerts a statistically significant negative and a positive effect on stock market performance in both the long and short-run in Ghana, respectively. It was also found that foreign direct investment has significant and a positive effect on stock market performance in Ghana in both the long and short run. Total capital stock and volume traded were also found to exert significant positive and negative impacts on stock market performance both in the short and long run respectively. Based on our findings, we recommend that expansionary monetary policy will be a better option to be carried out to improve the stock market performance in Ghana. Furthermore, government and private partnership may ensure the effective management of the macroeconomic variables to attract foreign direct investment into Ghana to boost stock market performance.

scholarly journals Regional Model Bit’s : A New Down For the Developing Countries

2021 ◽  
Vol 4 (2) ◽  
pp. 114-121
Author(s):  
Abdallah Mohamed Othman El Nofely ◽  
Rehna Gul
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Regional Model ◽  
Economic Sector ◽  
Gear Up ◽  
Advance Technology ◽  
Host Countries ◽  
Scale Down

Foreign direct investment (FDI) plays a crucial role in the economic sector, particularly in developing countries. BIT lays down instrumental principles which help to protect investors’ establishments in host states, by inter alia encouraging prompt compensation in case of expropriation. Governments need FDIs to gear up their economic growth, advance technology, and scale down unemployment. Most scholarly writings are in favor that BIT is a necessary tool for promoting FDIs, however this study takes a different approach and categorically unveils the draw backs of BIT in developing countries by highlighting some of the contentious provisions that have sparked unprecedented legal, economic, sociopolitical and diplomatic strife between the host countries, investors and investors’ home countries. Therefore, the author proposes development for regional Model BITs that would go in line with national laws to curtail the persisting sovereignty and socio-economic challenges.

scholarly journals Impact of Foreign Direct Investment Inflows on Economic Growth; the Case of the Republic of Seychelles

2019 ◽  
Author(s):  
Yusheng Kong ◽  
Sampson Agyapong Atuahene ◽  
Geoffrey Bentum-Mican ◽  
Abigail Konadu Aboagye
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Least Square ◽  
Small Island ◽  
Host Countries ◽  
Fdi Inflows ◽  
Economic Trends ◽  
The Republic ◽  
The Impact

This paper aims to research whether there is link between FDI inflows and Economic growth in the Republic of Seychelles Island. The ordinary least square results obtained shows that in the impact of FDI inflows on economic growth is low. Small Island Developing States attracts less FDI inflow because they are limited to few resources that attracts overseas firms which results in retarded development. The research lighted that impact of foreign direct investment on host countries does not only depend on the quality and quantity of the FDI inflows but some other variables such as the internal policies and the management skills, market structures, economic trends among others.

Foreign Direct Investment and the Flying Geese Model: Japanese Electronics Firms in Asia-Pacific

2000 ◽  
Vol 32 (2) ◽  
pp. 281-304 ◽  
Author(s):  
David W Edgington ◽  
Roger Hayter
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Asia Pacific ◽  
Critical Examination ◽  
Host Countries ◽  
Billiard Ball ◽  
Firm Level ◽  
Geographical Patterns ◽  
Japanese Fdi

This paper is a critical examination of the ‘flying geese’ and ‘billiard ball’ models of foreign direct investment (FDI) and their ability to explain the spatial expansion of Japanese electronics multinationals (MNCs) in Asia-Pacific countries from 1985 to 1996. Data on Japanese FDI are analyzed in this region at the aggregate, sectoral, and firm level. The paper commences with a review of the flying geese model, especially that version which interprets Japanese FDI as a catalyst for Asian development, and the billiard ball metaphor which suggests a mechanism for host countries to ‘catch up’ with Japan. The authors then turn to an analysis of Japanese FDI in Asia-Pacific together with employment data for fourteen major firms. This allows an evaluation of the two models in terms of recent geographical patterns of investment and employment growth by electronics MNCs. A special case study of Matsushita Electric Industrial Co. Ltd (MEI) helps flesh out the evolving geography of Japanese electronics firms in Asia-Pacific. Although the results support the overall patterns suggested by the two models, the authors argue that metaphors and analogies such as flying geese and billiard balls should not be used casually and as a substitute for analysis.

scholarly journals Foreign Direct Investment in Nepal

NUTA Journal ◽  
2018 ◽  
Vol 5 (1-2) ◽  
pp. 48-55
Author(s):  
Biraj Pyakurel
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
New Technologies ◽  
Market Access ◽  
Location Factors ◽  
Host Countries ◽  
Goods And Services ◽  
Management Techniques ◽  
Major Factors ◽  
Market Infrastructure

Foreign Direct Investment (FDI) is an important source of capital for economic growth in developing countries. It provides a package which constitutes new technologies, management techniques, finance and market access for the production and movement of goods and services. However, attracting FDI is a major challenge for host countries as it faces the challenge of identifying the major factors that motivate and affect the FDI location decision. The main FDI location factors are cost, market infrastructure, and technological, political, legal and socio-cultural factors. Despite several conflicting circumstances, Nepal is attempting to sort out overarching issues of FDI concerning with economic development. That’s why Nepal is at a point where from it can excel for economic goals via FDI. The set trends illustrate that various indicators pertaining to FDI in the country has been improving since peace process was begun in 2006. This analysis comes to conclusions that the country owns unique advantages and, thereby, opportunities of FDI useful for the country’s prosperity. Yet FDI in the country is not free of challenges, thus, that need to be timely addressed with prudent measures.

scholarly journals Foreign Direct Investment and Productivity: A Cross-Country, Multisector Analysis

2019 ◽  
Vol 36 (1) ◽  
pp. 54-79 ◽  
Author(s):  
Rodolphe Desbordes ◽  
Loe Franssen
Keyword(s):  
Foreign Direct Investment ◽  
Labor Productivity ◽  
Direct Investment ◽  
Emerging Market ◽  
Export Performance ◽  
Foreign Firms ◽  
Factor Productivity ◽  
Foreign Markets ◽  
Cross Country ◽  
Positive Effect

This paper adopts a cross-country, multisector approach to investigate the intra- and inter-industry effects of foreign direct investment (FDI) on the productivity of 15 emerging market economies in 2000 and 2008. Our main finding is that intra-industry FDI has a large positive effect on total and “exported” labor productivity. The effects of FDI on total factor productivity are much more elusive, both in statistical and economic terms. This result suggests that foreign firms raise the performance of their host economies through a direct compositional effect. Foreign firms tend to be larger and more input intensive and have greater access to foreign markets than domestic firms. Their greater prevalence mechanically increases average labor productivity and export performance.

Effect of Infrastructure and Foreign Direct Investment on Economic Growth in Sub-Saharan Africa

2019 ◽  
Vol 11 (3) ◽  
pp. 183-201 ◽  
Author(s):  
Edward Nketiah-Amponsah ◽  
Bernard Sarpong
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Generalized Method Of Moments ◽  
Business Environment ◽  
Transport Infrastructure ◽  
Sub Saharan Africa ◽  
Economic Infrastructure ◽  
Sub Saharan

This article investigates the effect of infrastructure and foreign direct investment (FDI) on economic growth in Sub-Saharan Africa (SSA) using panel data on 46 countries covering the period 2003–2017. The data were analyzed using fixed effects, random effects, and system generalized method of moments (GMM) estimation techniques. Based on the system GMM estimates, the results indicate that a 1 percent improvement in electricity and transport infrastructure induces growth by 0.09 percent and 0.06 percent, respectively. Additionally, FDI proved to be growth enhancing only when interacted with infrastructure. The interactive effect of FDI and infrastructure improves economic growth by 0.016 percent. The results suggest that public provision of economic infrastructure reduces the cost of production for multinational enterprises, thus providing an incentive to increase investment in the domestic economy to sustain economic growth. The results also suggest that the impact of FDI on economic growth is maximized when some level of economic infrastructure is available. Our findings thus provide ample justification on the need for a significant government investment in infrastructure to provide a less costly business environment for both local and multinational enterprises to improve economic growth.

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