The Foreign Direct Investment Job Multiplier During a Resource Boom: Evidence from Mongolia

2021 ◽  
Author(s):  
Nagham Sayour ◽  
Marcel Schröder
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Job Creation ◽  
Economic Effects ◽  
The Other ◽  
Fdi Inflows ◽  
Extractive Sector ◽  
Resource Sector

This paper explores a particular job creation channel during a resource boom, using Mongolia as a case study. Resource booms can lead to impressive growth rates in resource-rich developing countries. The paper examines the link between resource booms triggered by new resource projects and FDI inflows into the non-resource sector on one hand, and FDI and job creation on the other. Its analysis focuses explicitly on the non-resource sector, where the positive economic effects of FDI are more pronounced than in the extractive sector.

scholarly journals Dynamic Causal Relationships among GDP, Exports, and Foreign Direct Investment (FDI) in the Developing Countries

2013 ◽  
Vol 14 ◽  
pp. 1-19 ◽  
Author(s):  
Mohsen Mehrara ◽  
Amin Haghnejad ◽  
Jalal Dehnavi ◽  
Fereshteh Jandaghi Meybodi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Strong Evidence ◽  
Direct Investment ◽  
The Other ◽  
Fdi Inflows ◽  
Long Run ◽  
Short Run ◽  
Growth Hypothesis

Using panel techniques, this paper estimates the causality among economic growth, exports, and Foreign Direct Investment (FDI) inflows for developing countries over the period of 1980 to 2008. The study indicates that; firstly, there is strong evidence of bidirectional causality between economic growth and FDI inflows. Secondly, the exports-led growth hypothesis is supported by the finding of unidirectional causality running from exports to economic growth in both the short-run and the long-run. Thirdly, export is not Granger caused by economic growth and FDI inflow in either the short run or the long run. On the basis of the obtained results, it is recommended that outward-oriented strategies and policies of attracting FDI be pursued by developing countries to achieve higher rates of economic growth. On the other hand, the countries can increase FDI inflows by stimulating their economic growth.

Regional and Sectoral Disparities in Inflow of FDI in India

2012 ◽  
pp. 149-162 ◽  
Author(s):  
Behrooz Shahmoradi
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Developing Country ◽  
Direct Investment ◽  
Steady Increase ◽  
Policy Makers ◽  
Fdi Inflows ◽  
Reform Period ◽  
Micro Level

During the last two decades, Foreign Direct Investment (FDI) has become increasingly important in the developing world, with a growing number of developing countries seeking in attracting substantial and rising amounts of inward FDI. Furthermore, FDI has become the most important source of finance that can contribute to economic development. Recognizing this, all the governments want to attract it. India as a developing country is not an exception in this regard therefore study the different aspects of FDI can be helpful for policy makers in macro as well as micro level. Since 1990, FDI has been considered as the most powerful driver of economic development. While India has seen a steady increase in FDI inflows in the post-reform period, therefore, this study tries to analyze the regional and sectoral disparities in Inflow of FDI in India since 1990. The analysis showed that there is a disparity between states in India and it also indicates a shift from primary and secondary sectors to tertiary sectors and pervasive computing areas.

Regional and Sectoral Disparities in Inflow of FDI in India

2010 ◽  
pp. 234-246
Author(s):  
Behrooz Shahmoradi
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Developing Country ◽  
Direct Investment ◽  
Steady Increase ◽  
Policy Makers ◽  
Fdi Inflows ◽  
Reform Period ◽  
Micro Level

During the last two decades, Foreign Direct Investment (FDI) has become increasingly important in the developing world, with a growing number of developing countries seeking in attracting substantial and rising amounts of inward FDI. Furthermore, FDI has become the most important source of finance that can contribute to economic development. Recognizing this, all the governments want to attract it. India as a developing country is not an exception in this regard therefore study the different aspects of FDI can be helpful for policy makers in macro as well as micro level. Since 1990, FDI has been considered as the most powerful driver of economic development. While India has seen a steady increase in FDI inflows in the post-reform period, therefore, this study tries to analyze the regional and sectoral disparities in Inflow of FDI in India since 1990. The analysis showed that there is a disparity between states in India and it also indicates a shift from primary and secondary sectors to tertiary sectors and pervasive computing areas.

Do surges in foreign direct investment inflows lead to surges in economic growth? Evidence from developing countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jagadish Prasad Sahu
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Domestic Investment ◽  
Fdi Inflows ◽  
Content Type ◽  
Regression Methods ◽  
Recursive Bivariate Probit ◽  
Rapid Economic Growth

Purpose The purpose of this paper is to examine whether surge in foreign direct investment (FDI) inflows leads to surge in economic growth in 52 developing countries for the period 1990-2014. Design/methodology/approach The author used a threshold approach to identify surge incidences in gross domestic product (GDP) per capita growth rates and FDI inflows (measured as percentage of GDP) for each country included in the sample. Three different criteria are used to identify surge instances. As a preliminary analysis the author used the probit and complementary log–log regression methods to estimate the likelihood of growth surge occurrence. To correct the potential endogeneity problem the author jointly estimated the growth surge and FDI surge equations using the recursive bivariate probit (RBP) regression. Findings The author found that East Asia and the Pacific region has highest rate of growth surge incidences followed by South Asia. The results suggest that surge in FDI inflows significantly increases the likelihood of growth surge. The finding is robust to alternative surge definitions and methods of estimation. Practical implications The analysis reveals that inbound FDI flow is a critical driver of economic growth in developing countries. Large FDI inflows matters for achieving rapid economic growth. Therefore developing countries should adopt favourable policies to attract more FDI. Policymakers should focus on improving the investment climate of the country to boost domestic investment and to attract larger amount of FDI into the economy. Originality/value To the best of the author’s knowledge this is the first study to examine whether surge in FDI inflows stimulates surge in economic growth in developing countries. The analysis reveals that FDI surge is a robust predictor of rapid economic growth in developing countries.

scholarly journals What worth is a BIT? Impact of BITs on FDI Inflows into India

2018 ◽  
Vol 4 (02) ◽  
Author(s):  
Anshuman Kamila ◽  
Mitali Chinara
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Best Practice ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
New Model ◽  
Indian Model Bit ◽  
The Government

Developing countries often consider foreign direct investment (FDI) as an engine to boost economic growth. Therefore they try to promote investment inflow by various means. One approach is to offer investment guarantees to foreign investors using Bilateral Investment Treaties (BITs). Following international best practice, India has signed a number of BITs to stimulate inflow of FDI. Till date, the Government of India has signed BITs with 83 countries. These BITs were largely negotiated on the basis of the Indian Model BIT of 1993. There have been recent moves that point in the direction of India fundamentally altering the text of its BITs with countries, including calling off existing BITs and approving a new model BIT. However, concerns have been raised as to the possible pernicious impact of these changes on the inflow of FDI into India. This paper investigates whether the concern is warranted at all – by asking if BITs significantly impact the inflow of FDI. It is established that BIT is indeed a veritable boost to FDI inflow, and the estimated coefficient remains significant and robust across econometric specifications. Therefore, a note of caution is sounded for the rejigging exercise involving BITs that has been initiated by India.

INCONSISTENCIES IN ICSID AWARDS ON DISPUTES RELATED TO MFN AND UMBRELLA CLAUSE

2021 ◽  
Vol 6 (2) ◽  
pp. 247-264
Author(s):  
Herliana Herliana
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Case Study Method ◽  
Host Countries ◽  
Foreign Investors ◽  
Investment Arbitration

Investment arbitration has been acclaimed as an important part of Foreign Direct Investment (FDI) movement around the globe because it provides a neutral and trustable forum for settling investment dispute. However, many argue that investment arbitration often becomes advocates of foreign investors and neglect the developing country’s interests as the host of investment. This paper aims at studying the investment arbitration awards rendered by International Center for Settlement of Investment Dispute (ICSID) tribunals launched against developing countries. The question is whether and to what extent those awards have equally observed the interests of foreign investors and host states of investments. To answer the questions, this paper employs case study method and use publicly available ICSID cases. This research shows that some ICSID tribunals have inconsistent reasoning which led to contradictory decisions. Apparently, as some cases indicate ICSID tribunals gave more weight to the need to protect foreign investors rather than host countries’ development interests. As a consequence, inconsistency and ambiguity have led to uncertainty and unpredictability of the forum. This is not only disadvantaged the parties due to inability to foresee the likely outcome of the disputes but also endanger the ICSID tribunals’ credibility as neutral and reliable forum.

scholarly journals The Nexus of Selected Macroeconomic Variables toward Foreign Direct Investment: Evidence from Indonesia

2021 ◽  
pp. 110-115
Author(s):  
Noris Fatilla Ismail ◽  
Suraya Ismail
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Domestic Investment ◽  
Fdi Inflows ◽  
Macroeconomic Variables ◽  
Distributed Lag ◽  
Long Run ◽  
Macroeconomic Stability

Foreign direct investment (FDI) inflows are a major instrument of economic growth in developing countries. Indonesia is one of the developing countries that has received more FDI with macroeconomic stability. The macroeconomic stability indicator is seen as an important factor in driving economic growth and attracting FDI inflows in Indonesia. Therefore, this study examines the relationship of selected macroeconomic variables toward the FDI in Indonesia over the period 1980-2019. Using Autoregressive Distributed Lag (ARDL), the empirical results showed that market size, domestic investment, government spending and foreign exchange rate are key factors influencing long-run FDI inflows. However, financial development revealed no relationship with FDI inflows in Indonesia. Overall findings indicated that macroeconomic variables influence FDI inflows. These findings guided policymakers in formulating new policies to ensure macroeconomic indicators' stability in driving economic growth.

scholarly journals An Impact Assessment of Expected Future Turmoil Risk on FDI: A Panel Data Analysis of Developing Countries

2014 ◽  
Vol 19 (2) ◽  
pp. 101-128 ◽  
Author(s):  
Mahvish Faran
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Data Analysis ◽  
Direct Investment ◽  
Panel Data Analysis ◽  
Gdp Per Capita ◽  
Democratic Accountability ◽  
Fdi Inflows ◽  
Per Capita ◽  
Very High

This paper uses foreign direct investment (FDI) data from 39 developing countries for the period 2002–11 to explore whether the expected future turmoil risk of a country plays a significant role in determining FDI. It concludes that countries for which the expected future turmoil risk is very high are likely to have lower FDI inflows than countries for which the expected future turmoil risk is low, keeping all other factors constant. The results also illustrate that GDP per capita, democratic accountability, religious tension, and FDI inflows in the previous period are important determinants of FDI in developing countries.

scholarly journals The Economic Determinants of Foreign Direct Investment in Developing Countries and Transition Economies

2007 ◽  
Vol 46 (3) ◽  
pp. 285-299 ◽  
Author(s):  
Ismail Çevis ◽  
Burak Çamurdan
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Transition Economies ◽  
Direct Investment ◽  
Inflation Rate ◽  
Macroeconomic Policy ◽  
Host Countries ◽  
Fdi Inflows ◽  
Economic Determinants ◽  
Previous Period

The economic growth rates have dramatically increased in developing economies, such as in Latin American, Asian, and Eastern European countries, following the financial liberalisation attempt, especially during the 1990s. Foreign direct investment (FDI) has become an increasingly important element for economic development and integration of developing countries and transition economies in this period with the world economy. The main purpose of this study is to develop an empirical framework to estimate the economic determinants of FDI inflows by employing a panel data set of 17 developing countries and transition economies for the period of 1989:01-2006:04. In our model there are seven explanatory economic variables. They are, respectively, the previous period FDI (the pull factor for new FDI), GDP growth (measures market size), Wage (unit labour costs), Trade Rate (measures the openness of countries), the real interest rates (measures macroeconomic policy), inflation rate (as country risk and macroeconomic policy), and domestic investment (Business Climate). Hence, throughout the paper, only the economic determinants (being separated and apart from the other studies in the literature) of FDI inflows to developing countries and transition economies are studied. It is found out that the previous period FDI which is directly related to the host countries’ economic resources is important as an economic determinant. Besides, it is also understood that the main determinants of FDI inflows are the inflation rate, the interest rate, the growth rate, and the trade (openness) rate and FDI inflows give power to the economies of host countries.

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