scholarly journals Is the Relocation of Polluting Industries Prompted by FDI Flow and Stock, Globalisation, Corruption and Regulation?

2021 ◽  
Vol 18 (4) ◽  
pp. 1981
Author(s):  
Patrícia Hipólito Leal ◽  
Rafaela Vital Caetano ◽  
António Cardoso Marques
Keyword(s):  
Sustainable Development ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Developing Economies ◽  
Environmental Regulations ◽  
Vital Role ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Autoregressive Distributed Lag ◽  
Lag Model

Can globalisation and foreign direct investment shape sustainable development? Foreign direct investment is one of the main drivers for the transfer of polluting industries. With this in mind, the main objective of this research is to identify the role played by foreign direct investment (flow and stock), globalisation (de jure and de facto), corruption and regulatory quality in environmental degradation and sustainable development. To accomplish this objective, and to link the relationships under analysis to the level of development, a comparison between a group of developing countries and a group of developed ones was performed. The results confirm the suitability of the division of the countries by revealing various effects. This analysis was conducted from 1996 to 2017 and by recurring to the Autoregressive Distributed Lag model. This study proves that foreign investors play a vital role in reaching sustainable development. Measures must be implemented to eliminate the distortions that cause a company based in a country with strict environmental regulations to relocate its production to one with lax environmental regulations. However, these measures need to be combined with complementary measures that encourage developing economies to agree to a possible slowdown in their economic growth if sufficiently compensated for this reduced growth.

scholarly journals Are Technological Innovation and Foreign Direct Investment a Way to Boost Economic Growth? An Egyptian Case Study Using the Autoregressive Distributed Lag (ARDL) Model

2021 ◽  
Vol 13 (6) ◽  
pp. 3265
Author(s):  
Maha Mohamed Alsebai Mohamed ◽  
Pingfeng Liu ◽  
Guihua Nie
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Technological Innovation ◽  
Direct Investment ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Autoregressive Distributed Lag ◽  
Integration Test ◽  
Lag Model

Both technological innovation and foreign direct investment have received widespread attention in the literature on their role in promoting economic growth. Therefore, this study aims to test the relationship between foreign direct investment, technological innovation, and economic growth of the Egyptian economy during the period between 1990–2019 using the autoregressive distributed lag model simultaneous integration test. Our findings show of the ARDL (Autoregressive Distributed Lag) model estimation a joint complementary relationship between the rate of growth of per capita gross domestic product (GDP) in US dollars and the independent variables in the model in the long and short term, which are statistically significant results. We found a positive significant relationship between the variables of incoming foreign direct investment and share of total capital formation in economic growth. Therefore, in the long term, the rate of inflation and the innovation index had a negative impact in the long term and the speed of adjustment towards equilibrium was very large, as it was estimated at 1.5 years (1/0.651). Furthermore, the study also provides valuable lessons and a strategic vision for the Egyptian government, which aspires to advance technology and attract more foreign direct investment.

China’s outward foreign direct investment and exports diversification: an asymmetric analysis

2020 ◽  
Vol 13 (2) ◽  
pp. 45-69 ◽  
Author(s):  
Faheem Ur Rehman ◽  
Yibing Ding ◽  
Abul Ala Noman ◽  
Muhammad Asif Khan
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Vital Role ◽  
Outward Foreign Direct Investment ◽  
Asymmetric Effect ◽  
Content Type ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Chinese Export

Purpose Over the past two decades, China’s outward foreign direct investment (OFDI) has risen remarkably. Whether such an increase affects the Chinese export diversification (ED) is a significant issue that has surprisingly remained unaddressed. This study aims to explain this issue that how OFDI plays a vital role in symmetric and asymmetric effects on its ED. Design/methodology/approach The authors introduce a robust nonlinear autoregressive distributed lag (NARDL) model. Ironically, the purpose of this study is to analyze the symmetric and asymmetric effect of OFDI on ED. Findings The authors propose that growing OFDI would be more advantageous to China, rather than the policies of contraction. Therefore, the study provides valuable policy insights to consider the long-run asymmetric momentum given to ED by China’s OFDI. Originality/value The results of this study may seem to be an important newsletter for further policy discussion on how China can catch up on the benefits of ED through OFDI.

scholarly journals Impact of Taxation on Foreign Direct Investment: Empirical Evidence from Pakistan

2021 ◽  
Vol 9 (1) ◽  
pp. 10-18
Author(s):  
Muhammad Nouman Shafiq ◽  
Liu Hua ◽  
Muhammad Azhar Bhatti ◽  
Seemab Gillani
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Developing Economies ◽  
Trade Openness ◽  
Vital Role ◽  
Series Data ◽  
Fdi Inflows ◽  
Distributed Lag ◽  
The Government

Foreign direct investment plays a vital role in promoting economic growth, especially for developing economies. It causes improvement in the different sectors such as education, healthcare, manufacturing industries, and creates more jobs. The speed of FDI inflows has been increasing in Pakistan each year. In order to attract more FDI, many countries try to reframe their tax policies by introducing different tax incentives such as tax holidays, investment allowances, exemptions, deductions etc. The purpose of the present paper is to find the implication of taxation in the decision of FDI inflows in Pakistan. Time series data is used spanning over 1985 to 2020. The data was obtained from two sources: the “World Development Indicator” (WDI) and “Economic Survey of Pakistan”. “Auto-Regressive Distributed Lag” (ARDL) and “Error Correction Model” (ECM) techniques are used for empirical analysis. The study concludes that low taxes motivate foreign investors' investment contribution and the long-run relationship between taxes and FDI in Pakistan. Other control variables, including GDP growth, trade openness and exchange rate, positively impact FDI. It is suggested that decision-makers should direct policies to reduce the taxes to welcome FDI in Pakistan. In this regard, the government needs to reconsider its priorities while making policies favouring FDI.

scholarly journals TheRole of Institutional Determinants in Attracting Foreign Direct Investment to Egypt: Empirical Study

2020 ◽  
pp. 54-69
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Empirical Literature ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Regulatory Quality ◽  
Institutional Determinants ◽  
Short Run ◽  
Lag Model ◽  
And Control

This paper aims to explore the relationship between foreign direct investment (FDI) in Egypt, as a dependent variable,and selectedeconomic and institutional determinants for the period (1996-2018). The work attempts to bridge the gap created by previous empirical literature that failed to focus on critical institutional determinantsof FDI in developing countries, especially governance-related determinants. The study used the autoregressive distributed lag model (ARDL); to testthe Cointegration relationship between FDI and its determinants.Besides, the error correction model (ECM) wasused to explorethe short-run relationship. In light ofapplying the ARDL approach, the study concluded that while both market size and regulatory quality stimulatedFDI, the latter has been negatively affected by the real exchange rate and government effectiveness. Moreover, the study revealed that inthe short-run, both regulatory quality and control of corruption inducedFDI in Egypt. These findings shed light on the crucial role that institutional factors can play in creating a more favorable FDI climate in Egypt.

scholarly journals Does Foreign Direct Investment Generate Long-Term Growth in Ghana?

2021 ◽  
Vol 9 (3) ◽  
pp. 214-229
Author(s):  
Arthur Benedict ◽  
Kyei Baffour Tutu ◽  
Afenya Millicent Salase
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Policy Reforms ◽  
Foreign Investors ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Lag Model ◽  
The Government

In pursuant to sustainable economic growth on the ticket of FDI-led growth hypothesis, the government of Ghana has instituted a myriad of thoughtful policy reforms to help boost the economy to realize a self-sustaining economic growth. To some extent, the policies might have paid off as the country was named the highest recipient of FDI in West Africa in 2018. However, the supposed upsurge in the inflow of foreign direct investment in the country and its expected long-run spillover benefits have not been tangibly felt in the region as the economy continues to oscillate. Therefore, this study utilized two methods; the autoregressive distributed lag model (ARDL) and the variance decomposition method (VDM) to empirically examine economic growth of Ghana as a function of foreign direct investment (FDI) whiles controlling for exchange rate, financial development, trade oppeness and employment rate. The results of the study endorses the FDI-led growth for Ghana by indicating that a positive long run causal impact flows from FDI to economic growth. The findings from the VDM test affirm the results are robust and reliable. Therefore, the study suggests that government should amplify FDI inflow via policies like incentives to draw more foreign investors directly into other sectors other than the conventional sectors gratified by foreign investors.

scholarly journals The Determinants of Tourist Expenditure Per Capita in Thailand: Potential Implications for Sustainable Tourism

2021 ◽  
Vol 13 (12) ◽  
pp. 6550
Author(s):  
Wanvilai Chulaphan ◽  
Jorge Fidel Barahona
Keyword(s):  
Natural Resources ◽  
Sustainable Tourism ◽  
Least Square ◽  
Mass Tourism ◽  
Tourist Destinations ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Autoregressive Distributed Lag ◽  
Lag Model ◽  
Per Capita

Tourism authorities in Thailand have consistently pursued profit-seeking mass tourism, resulting in the detriment of the natural resources in major tourist destinations. In response, sustainable tourism projects centered on preserving the environment have been established but neglect the financial needs of tour operators. The objective of this study was to investigate the determinants of tourist expenditure per capita in Thailand using a dataset consisting of 31 countries from 2010 to 2017. The analysis was based on an autoregressive distributed lag model (ARDL) and used a panel estimated generalized least square (ELGS). Generating such knowledge is essential for tourist authorities to develop profitable and sustainable tourism projects in tourist destinations whose natural resources have been affected by profit-seeking tourism. The tourism expenditure per capita is positively affected by word of mouth, income, and the rising prices in other major tourist destinations in Asia. However, it was negatively affected by relative levels of price and corruption. Sustainable tourism projects can be used to develop activities that will help distinguish Thailand from other tourism destinations in Asia. However, in implementing these sustainable tourism initiatives, the mark-up should be minimized to keep tourist prices in Thailand competitive.

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