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

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.

scholarly journals Investigation of the character and significance of the impact of labor market factors on the country's investment attractiveness

2020 ◽  
Vol 2020 (2) ◽  
pp. 59-71
Author(s):  
Vitaliia Koibichuk ◽  
◽  
Tetiana Bezbakh ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Labor Market ◽  
Direct Investment ◽  
Public Investment ◽  
Statistical Significance ◽  
Value Added ◽  
High Tech ◽  
Market Factors ◽  
Characteristic Features ◽  
The Impact

In recent years, there has been a significant structural impact of the so-called "digital" economy on the formation of FDI flows. The development of advanced technologies and robotics is accelerating. All this makes production more sophisticated, cheaper, and faster. The progressive labor market is a good basis for the successful development of enterprises in various industries. And investments make it possible for industries to be created, to develop, and to innovate. In addition, foreign direct investment is an important method of technology transfer that stimulates domestic public investment flows and fosters the development of human capital and institutions. The purpose of the article is to develop an economic and mathematical model of the dependence of a country's investment attractiveness on labor market factors. The influence of labor market factors on the investment attractiveness of Ukraine is analyzed and thoroughly substantiated, as well as the state of Ukraine's modern labor market, whose characteristic features, possible tendencies, and prospects are determined. The factors of the labor market include value-added per worker, medium and high-tech exports as a percentage of total exports, the unemployment rate, and the gross enrollment rate for higher education. Investment attractiveness is determined by the volume of foreign direct investment. When developing the model, the authors substantiate the comparability of the input data, their statistical significance, and the correlation of factor variables with foreign direct investment income. The Irwin method was used to check for anomalies of values, and recommendations were made for eliminating such data if they were found. The normality of distribution was verified using the Shapiro-Wilk test. The construction of a multivariate linear regression model was performed using the Stata 14 statistical package.

India’s vaccine diplomacy brings money and influence

2021 ◽  
Keyword(s):  
United States ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
The United States ◽  
Active Pharmaceutical Ingredients ◽  
Content Type ◽  
Pharmaceutical Ingredients ◽  
The World

Significance Last week, its partners in the ‘Quad’ grouping -- the United States, Japan and Australia -- agreed to help increase its vaccine manufacturing and exporting capacity. Each of the Quad members is wary of China, which like India is gifting and selling coronavirus jabs around the world. Impacts India’s manufacturing sector will attract more foreign direct investment. Greater cooperation over supply chains will help strengthen India-Australia ties. Indian pharma will in the long term aim to ease dependence on imports of active pharmaceutical ingredients from China.

The Impact of Foreign Direct Investment on Sectoral Adjustment in the Irish Economy

1997 ◽  
Vol 160 ◽  
pp. 76-86 ◽  
Author(s):  
Frances Ruane ◽  
Holger Görg
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Foreign Firms ◽  
Export Markets ◽  
Manufacturing Plants ◽  
Foreign Companies ◽  
Fiscal Incentives ◽  
The Republic ◽  
The Impact

Foreign direct investment (FDI) has played a crucial role in the overall development of the Irish economy over the past three decades, as the Republic of Ireland, hereafter referred to as Ireland, has pursued an industrial strategy characterised by (i) promoting export-led-growth in Irish manufacturing through various financial supports and fiscal incentives, and (ii) encouraging foreign companies to establish manufacturing plants in Ireland, producing specifically for export markets. The significance of FDI for the Irish economy is now reflected in, inter alia, the significant gap between GNP and GDP; in 1994, GNP was roughly 88 per cent of GDP in Ireland. As regards the manufacturing sector, the high shares of output and employment in foreign-owned companies in Ireland also indicate the importance of foreign firms. As we discuss in some detail in Section 3, foreign companies produced roughly 69 per cent of total net output and accounted for 45 per cent of employment in Irish manufacturing industries in 1993.

FOREIGN DIRECT INVESTMENTS AND MANUFACTURING SECTOR PERFORMANCE IN NIGERIA, (1970-2009)

2013 ◽  
Vol 03 (04) ◽  
pp. 39-56
Author(s):  
Adejumo Akintoye Victor
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Manufacturing Sector ◽  
Value Added ◽  
Foreign Direct Investments ◽  
Long Run ◽  
Negative Effect ◽  
Sector Performance ◽  
The Relationship

The study examined the relationship between foreign direct investment and the value added to the manufacturing industry in Nigeria, between the period 1970 and 2009. In view of the development and industrialising desires of Nigeria, as well as the foreign aid received in form of private investments, it is pertinent to examine the effect the presence of multinationals has had in shaping the Nigerian manufacturing industry. Using the autoregressive lag distribution technique to determine the relationship between foreign direct investment and manufacturing value added, it was discovered that in the long-run, foreign direct investments have had a negative effect on the manufacturing sub-sector in Nigeria.

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