scholarly journals International Trade and Foreign Direct Investment as Innovation Factors of the U.S. Economy

2014 ◽  
Vol 41 (1) ◽  
pp. 60-75
Author(s):  
Tomasz M. Napiórkowski
Keyword(s):  
Foreign Direct Investment ◽  
International Trade ◽  
Direct Investment ◽  
Positive Impact ◽  
The United States ◽  
Annual Data ◽  
Main Portion ◽  
The Impact ◽  
Total Impact ◽  
The U.S

Abstract The aim of this research is to asses the hypothesis that foreign direct investment (FDI) and international trade have had a positive impact on innovation in one of the most significant economies in the world, the United States (U.S.). To do so, the author used annual data from 1995 to 2010 to build a set of econometric models. In each model, 11 in total) the number of patent applications by U.S. residents is regressed on inward FDI stock, exports and imports of the economy as a collective, and in each of the 10 SITC groups separately. Although the topic of FDI is widely covered in the literature, there are still disagreements when it comes to the impact of foreign direct investment on the host economy [McGrattan, 2011]. To partially address this gap, this research approaches the host economy not only as an aggregate, but also as a sum of its components (i.e., SITC groups), which to the knowledge of this author has not yet been done on the innovation-FDI-trade plane, especially for the U.S. Unfortunately, the study suffers from the lack of available data. For example, the number of patents and other used variables is reported in the aggregate and not for each SITC groups (e.g., trade). As a result, our conclusions regarding exports and imports in a specific SITC category (and the total) impact innovation in the U.S. is reported in the aggregate. General notions found in the literature are first shown and discussed. Second, the dynamics of innovation, trade and inward FDI stock in the U.S. are presented. Third, the main portion of the work, i.e. the econometric study, takes place, leading to several policy applications and conclusions.

scholarly journals An Assessment of the Impact of Foreign Direct Investment on Employment: The Case of Ghana’s Economy

2019 ◽  
pp. 143-158
Author(s):  
Addo Eric Osei
Keyword(s):  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Employment Growth ◽  
Positive Impact ◽  
Multiple Linear Regression Model ◽  
Wage Structure ◽  
Annual Data ◽  
Causality Test ◽  
The Impact

The literature is in respect of the fact that foreign direct investment has been a key aspect of the development strategy of most developing countries. The main objective of the study is to examine the extent FDI influence employment creation in the non-mining sector of Ghana for the period 2000 – 2016 using time series (annual) data conducted with the aid of OLS (Multiple Linear Regression) model, Autoregressive Distributed Lag (ARDL-ECM) Bounds Testing Approach and Granger-Causality test in the estimation of level relationship / cointegration and causality (respectively) between the study variables (for robustness checks). The result of this study shows that FDI has a statistically significant and a positive impact on employment growth via jobs creation in Ghana. Again, evidence shows that the study variables are cointegrated and have a long run relationship. Further robust test from Granger-causality shows no causal relationship from FDI to employment growth or from employment growth to FDI (at significance level of 5%). In addition, the study identifies factors such as wage structure, investment freedom and subsectors as important indicators influencing employment in the country. Finally, the study recommends policies to help create enabling political and socio-economic environment for FDI thereby creating more sustainable jobs and tackling the current high rates of unemployment in Ghana.

scholarly journals Essays on Foreign Direct Investment, International Trade, and Inequality

2021 ◽  
Author(s):  
Minh Nam Ngo
Keyword(s):  
Foreign Direct Investment ◽  
International Trade ◽  
Vocational Education ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Tertiary Education ◽  
Value Added ◽  
The United States ◽  
High Tech ◽  
The Impact

<p>This thesis consists of three empirical essays on the impact on inequality of Foreign Direct Investment (FDI), international trade, and technological progress that comes with them. The first essay examines whether FDI contributes towards income convergence of the host country, drawing evidence from provincial data in Vietnam. Using the spatial econometrics approach and an exogenous set of distance-based weights to characterize spatial dependences, we identify the substantial role of both spatial interactions and FDI spillovers in bringing provinces closer together in terms of income level. We show that high-tech FDI and industry FDI agglomerations contribute significantly more towards the convergence process than low-tech FDI and agglomerations formed by FDI firms coming from the same country. A similar pattern also emerges when we consider consumption convergence. The second essay studies the impact of local labour demand shocks from FDI firms on wage distribution, using microdata from the Vietnam Household Labour Force Survey. We use Bartik shift-share instrument based on the interaction between predetermined local employment structure and time-varying nationwide employment to deal with the endogeneity between local wage level and multinational firms’ locational decisions. Overall, we find that surges in foreign hiring increase average local wage, but the benefits are considerably higher for workers who work in lower-skilled occupations or have lower educational attainments. Given the prevailing skill and education wage premium, this heterogeneous effect provides evidence that the presence of FDI firms can reduce wage inequality. The third essay analyzes the association between income inequality, dependence on the manufacturing sector, and the availability of vocational education as an alternative track to general tertiary education. We find that in countries where tertiary and vocational are the two main available pathways for students to pursue, as economic recovery, trade, and automation increases the value-added of the manufacturing sector but decreases the number of manufacturing jobs, improving access to vocational education is associated with a larger decline in inequality compared to tertiary education. Therefore, in the long run, limited public resources should be directed towards vocational education in order to smooth out adjustment to trade and skilled-biased technological change. A case study comparing the United States and Germany in terms of their recovery paths from the Global Financial Crisis provide further evidence for our claims.</p>

scholarly journals Essays on Foreign Direct Investment, International Trade, and Inequality

2021 ◽  
Author(s):  
Minh Nam Ngo
Keyword(s):  
Foreign Direct Investment ◽  
International Trade ◽  
Vocational Education ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Tertiary Education ◽  
Value Added ◽  
The United States ◽  
High Tech ◽  
The Impact

<p>This thesis consists of three empirical essays on the impact on inequality of Foreign Direct Investment (FDI), international trade, and technological progress that comes with them. The first essay examines whether FDI contributes towards income convergence of the host country, drawing evidence from provincial data in Vietnam. Using the spatial econometrics approach and an exogenous set of distance-based weights to characterize spatial dependences, we identify the substantial role of both spatial interactions and FDI spillovers in bringing provinces closer together in terms of income level. We show that high-tech FDI and industry FDI agglomerations contribute significantly more towards the convergence process than low-tech FDI and agglomerations formed by FDI firms coming from the same country. A similar pattern also emerges when we consider consumption convergence. The second essay studies the impact of local labour demand shocks from FDI firms on wage distribution, using microdata from the Vietnam Household Labour Force Survey. We use Bartik shift-share instrument based on the interaction between predetermined local employment structure and time-varying nationwide employment to deal with the endogeneity between local wage level and multinational firms’ locational decisions. Overall, we find that surges in foreign hiring increase average local wage, but the benefits are considerably higher for workers who work in lower-skilled occupations or have lower educational attainments. Given the prevailing skill and education wage premium, this heterogeneous effect provides evidence that the presence of FDI firms can reduce wage inequality. The third essay analyzes the association between income inequality, dependence on the manufacturing sector, and the availability of vocational education as an alternative track to general tertiary education. We find that in countries where tertiary and vocational are the two main available pathways for students to pursue, as economic recovery, trade, and automation increases the value-added of the manufacturing sector but decreases the number of manufacturing jobs, improving access to vocational education is associated with a larger decline in inequality compared to tertiary education. Therefore, in the long run, limited public resources should be directed towards vocational education in order to smooth out adjustment to trade and skilled-biased technological change. A case study comparing the United States and Germany in terms of their recovery paths from the Global Financial Crisis provide further evidence for our claims.</p>

scholarly journals Impacts of Foreign Direct Investment and Industrial Structure Transformation on Haze Pollution across China

2021 ◽  
Vol 13 (10) ◽  
pp. 5439
Author(s):  
Chenggang Li ◽  
Tao Lin ◽  
Zhenci Xu ◽  
Yuzhu Chen
Keyword(s):  
Foreign Direct Investment ◽  
Environmental Pollution ◽  
Direct Investment ◽  
Industrial Structure ◽  
Spatial Data Analysis ◽  
Annual Data ◽  
Eastern Region ◽  
Structure Transformation ◽  
Haze Pollution ◽  
The Impact

With the development of economic globalization, some local environmental pollution has become a global environmental problem through international trade and transnational investment. This paper selects the annual data of 30 provinces in China from 2000 to 2017 and adopts exploratory spatial data analysis methods to explore the spatial agglomeration characteristics of haze pollution in China’s provinces. Furthermore, this paper constructs a spatial econometric model to test the impact of foreign direct investment (FDI) and industrial structure transformation on haze pollution. The research results show that the high-high concentration area of haze pollution in China has shifted from the central and western regions to the eastern region and from inland regions to coastal regions. When FDI increases by 1%, haze pollution in local and neighboring areas will be reduced by 0.066% and 0.3538%, respectively. However, the impact of FDI on haze pollution is heterogeneous in different stages of economic development. FDI can improve the rationalization level of industrial structure, and then inhibit the haze pollution. However, FDI inhibits the upgrading level of industrial structure to a certain extent, and then aggravates the haze pollution. The research in this paper provides an important decision-making basis for coordinating the relationship between FDI and environmental pollution and realizing green development.

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

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.

Tiptoeing the Line Between National Security and Protectionism: A Comparative Approach to Foreign Direct Investment Screening in the United States and European Union

2019 ◽  
Vol 47 (02) ◽  
pp. 105-117
Author(s):  
Jason Jacobs
Keyword(s):  
United States ◽  
European Union ◽  
Foreign Direct Investment ◽  
National Security ◽  
Direct Investment ◽  
The United States ◽  
Comparative Approach ◽  
The European Union ◽  
Policy Goals ◽  
The U.S

AbstractWeaponization of state-backed, foreign investments by China is an emerging national security threat in the United States and the European Union. The U.S. and E.U. have espoused similar policy goals—to address the threat without closing their markets to foreign direct investment—while fostering increased cooperation between allied partners in screening transactions.On the surface, the recent, China-specific measures taken by the U.S. and the investment screening framework adopted by the E.U. appear reflective of an alignment of those policy goals. Indeed, many commentators have suggested that is exactly what is happening. However, closer examination reveals a stark divergence. The U.S. has a robust screening mechanism that has evolved into a weapon of economic warfare. The E.U. meanwhile, remains a patchwork of conflicting—or nonexistent—national regulations overlaid by a comparatively toothless investment screening framework.There is a tendency to attribute this divergence to structural differences between the United States and European Union. This in-depth comparison of U.S. and E.U. investment screening mechanisms exposes a split that goes beyond application and into actual policy. This revelation should temper expectations that the E.U. is equipping itself to block transactions that are of concern to the U.S.

scholarly journals THE IMPACT OF INNOVATION ON ECONOMIC GROWTH: THE SPILLOVER EFFECT OF FOREIGN DIRECT INVESTMENT

2020 ◽  
Vol 8 (2) ◽  
pp. 708-714
Author(s):  
Nguyen Tran Thai Ha ◽  
Sobar M. Johari ◽  
Trinh Thi Huyen Thuong ◽  
Nguyen Thi Minh Phuong ◽  
Le Thi Hong Anh
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Research And Development ◽  
Direct Investment ◽  
Positive Impact ◽  
Spillover Effect ◽  
Empirical Method ◽  
Convincing Evidence ◽  
Positive Contribution ◽  
The Impact

Purpose of the study: Innovation is seen as the key to improving quality and productivity, thereby promoting competition and economic growth. This study analyzes the impact of innovation on economic growth through various measures, such as research and development spending, the number of researchers, number of patents as well as trademark registrations. Research results are evidence to recommend policies for intellectual-based economic growth. Methodology: Literature review and empirical analysis conducted in the study. The empirical method is a two-step System Generalize Methods of Moments (GMM), aiming at reliable results. Accessing the World Bank Database, research data from 64 developed and developing countries are collected from 2006 to 2014. Main Findings: The empirical findings show that innovation plays a crucial contribution in promoting economic growth, similar to national openness and government spending on education. This study also finds a positive impact on foreign investment flows and their spillover role in enhancing the correlation between innovation and economic growth. Applications of this study: The findings of this study focus on the contributions of innovation, foreign direct investment inflows, and other macro factors that can be enforced to improve economic growth by policymakers. Novelty/Originality of this study: The study uses different measures of innovation, including inputs such as the number of researchers, research and development expenditure, and outputs as the number of patents and number of trademark registrations. Empirical findings are found consistently, thus confirming that innovation is very important for economic growth. The study also shows convincing evidence confirming the positive contribution of foreign direct investment as well as its spillover effect on innovation and economic growth.

scholarly journals Foreign Direct Investment and Trade Components in Context of Pakistan

2016 ◽  
Vol 12 (34) ◽  
pp. 384 ◽  
Author(s):  
Muhammad Akram Gilal ◽  
Khadim Hussain ◽  
Muhammad Ajmair ◽  
Sabahat Akram
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Annual Data ◽  
Investment Liberalization ◽  
Long Run ◽  
Short Run ◽  
The Impact

Objective of this paper was to evaluate the impact of foreign direct investment (FDI) on trade components (exports and imports) of Pakistan using annual data from 1975 to 2013. Engle and Granger two step cointegration method was used for conducting the analysis. This method was adopted because all the variables of interest were non stationary in level and stationary at first difference. Results provide evidence of long run cointegrating relationship as well as short run relationship between FDI and trade components. A rise in FDI causes both exports and imports to increase. Based on these empirical findings, we strongly recommend Government of Pakistan to focus on the strategy of investment liberalization as well as trade openness.

scholarly journals The Relationship between International Trade and Economic Growth

2019 ◽  
Vol 1 (02) ◽  
pp. 112-123
Author(s):  
Putri Dewi Purnama ◽  
Ming Hung Yao
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
International Trade ◽  
Exchange Rate ◽  
Direct Investment ◽  
Positive Impact ◽  
The Exchange Rate ◽  
Asean Countries ◽  
The Relationship

The aim of this study is to find the relationship between international trade and economic growth in ASEAN countries. Three independent variables used to measure the economic growth include international trade, the exchange rate, and foreign direct investment. This study employs a pedroni panel cointegration test to examine the data from 2004 to 2015. The results show that there is a long term cointegrated relationship between international trade and economic growth in the ASEAN countries. International trade and foreign direct investment also have a long term, positive impact on economic growth. Meanwhile, the exchange rate also has a long term, negative influence on the economic growth. In addition, there is an indirect relationship and bidirectional causalities between the GDP and international trade, as well as between the GDP and the exchange rate. On the other hand, there is a direct relationship and a bidirectional causality between international trade and the exchange rate. The FDI leads GDP, international trade, and exchange rates. Our results suggest that international trade must be supported by government policies that aim to enhance the financing of new investment for economic growth.

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