scholarly journals THE NEXUS BETWEEN INSTITUTIONAL FACTORS AND FOREIGN DIRECT INVESTMENTS IN DEVELOPING COUNTRIES IN EUROPE

2019 ◽  
Vol 31 (1) ◽  
pp. 23-26
Author(s):  
Liza Alili Sulejmani ◽  
Afrim Alili
Keyword(s):  
Developing Countries ◽  
Rule Of Law ◽  
Developing Economies ◽  
Political Stability ◽  
Institutional Factors ◽  
Foreign Direct Investments ◽  
Dynamic Panel ◽  
Doing Business ◽  
Time Period ◽  
Control Of Corruption

This paper tries to analyze the effects of institutional factors that affect FDI on developing economies in Europe by utilizing dynamic panel methodology, having into consideration the persistence of the endogeneity issues. Moreover, four institutional factors have been determined affecting the FDI in 15 developing European countries, analyzed for the time period 2004 – 2016.In addition, empirical results show that Control of Corruption; Political Stability, and Doing Business, have significant effect on attracting FDI on these transition countries, while Rule of Law has shown to be insignificant in attracting FDI flows in these countries.Further, such findings will contribute to the existing literature by using these institutional measures to value their impact on FDI attractiveness on European developing economies.

scholarly journals Institutional Analysis of Shadow Economy (Study on ASEAN 7 Developing Countries)

2020 ◽  
Vol 15 (1) ◽  
pp. 55
Author(s):  
Ana Rahmawati Wibowo ◽  
Wiwin Indrayanti
Keyword(s):  
Developing Countries ◽  
Rule Of Law ◽  
Shadow Economy ◽  
Secondary Data ◽  
Political Stability ◽  
Government Effectiveness ◽  
Regulatory Quality ◽  
Negative Effect ◽  
And Control ◽  
Control Of Corruption

This study aims to analyze the institutional variables of governance in ASEAN 7 developing countries. The independent variables consist of Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption, while shadow economy is dependent variable. The data used in this study are quantitative data and secondary data by using program Stata 14, the analysis technique used is multiple linear regression panel data. The results show that Voice and accountability has a negative and significant effect on the shadow economy as well as Political stability, Government effectiveness and Control of corruption on the other side. Regulatory quality has a positive and significant effect on the amount of shadow economy. Meanwhile, Rule of law no significant effect on the shadow economy. Underlying the results, the study arranges some policy to reduce negative effect of shadow economy.

scholarly journals Attracting Chinese FDI in Africa

2018 ◽  
Vol 14 (2/3) ◽  
pp. 139-153 ◽  
Author(s):  
Shan Shan ◽  
Zhibin Lin ◽  
Yulei Li ◽  
Yan Zeng
Keyword(s):  
Natural Resources ◽  
Rule Of Law ◽  
Political Stability ◽  
Institutional Factors ◽  
Market Size ◽  
Content Type ◽  
Chinese Investment ◽  
Regulatory Quality ◽  
And Control ◽  
Control Of Corruption

Purpose The purpose of this paper is to examine the effect of natural resources, market size and five major institutional factors (voice and accountability; political stability and absence of violence; regulatory quality; rule of law and control of corruption) on Chinese foreign direct investment (FDI) in Africa. Design/methodology/approach This study uses regression analysis on panel data across 22 countries for the period 2008-2014. Findings Natural resources did not play a significant role in attracting Chinese investments, but market size did. Among the institutional factors, only voice and accountability had a significant and positive effect on attracting Chinese FDI; the effects of rule of law and control of corruption were not significant and political stability and regulatory quality had a significant and negative effect. Research limitations/implications Chinese investment in Africa is only a recent phenomenon, and is growing rapidly; further studies should examine factors that are unique to the context such as bilateral political link. Practical implications African countries that are struggling with improving their poor institutional quality in the short term could effectively attract Chinese investment by reducing investor psychic distance, e.g. establishing a closer political link with China. Nevertheless, in the long term, measures of improving institutional quality are important. Originality/value This study reveals for the first time that what attracts Chinese investment is market size rather than natural resources, and different institutional factors of an African country show varying effects on attracting Chinese FDI.

scholarly journals The Impact of the Investment Environment on Foreign Direct Investment (FDI) in the European Transition Economies

2020 ◽  
pp. 138-147
Keyword(s):  
Transition Economies ◽  
Political Stability ◽  
Transition Countries ◽  
Dynamic Panel ◽  
Investment Environment ◽  
Tax Rate ◽  
Doing Business ◽  
Distance To Frontier ◽  
The Impact ◽  
Control Of Corruption

The main objective of this paper is to investigate the impact of the investment environment on FDI in transition economies in Europe, through the usage of dynamic panel methodology, due to the persistence of the endogeneity issues. Further, three main factors have been determined affecting the FDI in 15 developing countries through the time span 2009–2016 as Control of Corruption, Political Stability and Absence of Violence/Terrorism and Distance to frontier score (Doing Business) having positive and significant effect on attracting FDI in these transition countries. Also as pull factors are used GDP per capita, profit tax rate showing positive and significant effect on FDI flows, while unemployment rate was positive but does not have a significant role in the attraction of FDI flows in European transition countries. In addition, to our best knowledge this paper is among the first that attempts to investigate this relationship in this set of countries by employing the dynamic panel methodology using differenced GMM model as well as employing Distance to frontier score (Doing Business) as one of investment environment factors that impact FDI flows for this set of 15 countries. Furthermore, such findings will contribute to the existing literature by using these instruments to measure their impact on FDI attractiveness on European transition economies.

scholarly journals Corruption, governance and economic growth in Sub-Saharan Africa: a need for the prioritisation of reform policies

2014 ◽  
Vol 10 (2) ◽  
pp. 316-330 ◽  
Author(s):  
Kamil Omoteso ◽  
Hakeem Ishola Mobolaji
Keyword(s):  
Economic Growth ◽  
Rule Of Law ◽  
Political Stability ◽  
Content Type ◽  
Governance Indicators ◽  
Data Framework ◽  
Regulatory Quality ◽  
The Impact ◽  
Control Of Corruption ◽  
Ssa Countries

Purpose – This study aims to investigate the impact of governance indices (especially control of corruption) on economic growth in some selected Sub-Sahara African (SSA) countries with a view to making policy recommendations. Specifically, the study attempts to assess whether either governance reforms (especially those relating to control of corruption) or simultaneous policy reforms could have any impact on the growth of the sample SSA countries. Design/methodology/approach – The governance indicators used in this study were drawn from the PRS Group and the Worldwide Governance Indicators for 2002-2009, while the real gross domestic product (GDP) per capita growth data were obtained from the World Bank database. The study covered 47 SSA countries, and it adopted the panel data framework, the fixed effect, the random effect and the maximum likelihood estimation techniques for the analyses. Findings – The study found that political stability and regulatory quality indicators have growth-enhancing features, as they impact on economic growth in the region significantly, while government effectiveness impacts negatively on economic growth in the region. Despite, several anti-corruption policies in the region, the impact of corruption control on economic growth is not very obvious. The study also found that simultaneous implementation of the voice and accountability and the rule of law indicators has more positive impact on economic growth in the region. Both policies are complementary, and, hence, can be pursued simultaneously. Research limitations/implications – The results suggest that reform efforts that aim at enhancing accountability, regulatory quality, political stability and the rule of law have more growth-enhancing features and, thus, should be given more priority over reform efforts that singly address the issue of control of corruption due to the endemic, systemic and ubiquitous nature of corruption in the region. Practical implications – The study suggests that reform efforts that aim at enhancing accountability, regulatory quality and rule of law have more growth-enhancing features and, therefore, should be given more priority. Originality/value – Many previous studies attempted to examine the impact of corruption on economies, but this paper tries to assess the effect of corruption control and other governance indices on economic growth in the most vulnerable region of the world, the SSA. Besides, the study adopts the panel data framework which makes it possible to allow for differences in the form of unobservable individual country effects.

scholarly journals PENGARUH ELEMEN GOOD GOVERNANCE TERHADAP TINGKAT KORUPSI DI ASIA TENGGARA

2020 ◽  
Vol 25 (1) ◽  
pp. 96-114
Author(s):  
Dinda Ayu Dizrisa ◽  
Sudrajat Sudrajat ◽  
Niken Kusumawardani
Keyword(s):  
Rule Of Law ◽  
Good Governance ◽  
Linear Regression Analysis ◽  
Political Stability ◽  
Multiple Linear Regression Analysis ◽  
Economic Problem ◽  
Regulatory Quality ◽  
The Government ◽  
And Control ◽  
Control Of Corruption

Corruption is a complex social, political and economic problem and occurs in every country with different levels. Corruption will complicate democracy and governance of a country. To overcome the problem of corruption, the government must implement good governance. This study aims to provide empirical evidence regarding the effect of elements of good governance on the level of corruption in Southeast Asia. Good governance variables are presented by six variables: voice and accountability, political stability and absence of violence / terrorism, government effectiveness, regulatory quality, rule of law and control of corruption. Meanwhile, the level of corruption is measured using the Corruption Perceptions Index (CPI). The research sample was selected using the purposive sampling method and produced a sample of 8 countries and the observation period was carried out in 2009-2018 or as many as 10 years, so the number of samples in this study were 80 samples. Corruption level data used in this study uses the Corruption Perceptions Index (Transparency International), while the good governance data used in this study uses the Worldwide Governance Indicators (World Bank). The research methodology used in this study is multiple linear regression analysis with the IBM SPSS Statistics 24 program. The results showed that the variable voice and accountability, political stability and absence of violence / terrorism, and rule of law had no effect on the level of corruption, whereas the government variable effectiveness, regulatory quality, and control of corruption affect the level of corruption.

scholarly journals The Governance and Tourism: A Case of Developing Countries

2021 ◽  
Vol 9 (3) ◽  
pp. 199-213
Author(s):  
Rana Ejaz Ali Khan ◽  
Tusawar Iftikhar Ahmad ◽  
Jaweria Haleem
Keyword(s):  
Rule Of Law ◽  
Good Governance ◽  
Developing Economies ◽  
Trade Openness ◽  
Tourism Development ◽  
Political Stability ◽  
Method Of Moment ◽  
Total Employment ◽  
Government Effectiveness ◽  
Regulatory Quality

Tourism is a rapidly growing industry globally and it is contributing a significant part in the GDP of the economies. In the literature, a variety of determinants of tourism are discussed theoretically and empirically but the effect of national governance on tourism is rarely discussed. This study investigates the effect of governance on tourism development in a panel of 65 developing economies for the time period of 2000-2015. Tourism development is measured by an index of three components, i.e. spending by international tourists, spending by local tourists and tourism’s share in total employment in the economy. For governance an index is constructed based on indicators of government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability. Data has been taken from World Development Indicators (WDI), Worldwide Governance Indicators (WGI) and World Travel and Tourism Council (WTTC). Generalized Method of Moment (GMM) estimation indicates that governance positively influence tourism development and its components, i.e. foreign visitors spending, domestic tourist spending and contribution of tourism in employment. The indicators of governance, i.e. government effectiveness, political stability, regulatory quality, rule of law and voice and accountability also positively affect tourism development. Terrorism, environmental degradation and corruption have shown adverse effect on tourism development as well as components of tourism development. The economic growth and trade openness have encouraging effect on tourism development and its comments. It is concluded that through good governance tourism may be developed but terrorism and corruption are needed to be eliminated.

scholarly journals Increasing Supply of Tradable Goods in the Common Market for Eastern and Southern Africa (COMESA)

2015 ◽  
Vol 1 (2) ◽  
pp. 73-117
Author(s):  
Macleans Mzumara
Keyword(s):  
Foreign Direct Investment ◽  
Rule Of Law ◽  
Direct Investment ◽  
Institutional Quality ◽  
Political Stability ◽  
Government Effectiveness ◽  
Regulatory Quality ◽  
Tradable Goods ◽  
And Control ◽  
Control Of Corruption

The author investigated the nature of institutional quality in the Common Market for Eastern and Southern Africa (COMESA) on the basis of voice and accountability political stability, government effectiveness, regulatory quality, rule of law and control of corruption. The author further investigated the existence of a link between institutional quality and factors of production. The results show that capital, entrepreneurship and foreign direct investment are the major determinants of production of tradable goods in COMESA. In exception of Mauritius and Namibia (currently no longer a member) the rest of COMESA member states have very poor institutional quality. This affects their ability to attract foreign direct investment hence production of tradable goods. Voice and accountability, government effectiveness, rule of law and political stability play a major role in increasing production of tradable goods in COMESA. Foreign direct investment is affected by voice and accountability, rule of law and political stability than any other factors. Availability of raw material is affected by government effectiveness, regulatory quality, political stability, voice and accountability and control of corruption. Capital is very sensitive to issues of voice and accountability and control of corruption and regulatory quality.

Macroeconomic Risk and Political Stability: Perspectives from Emerging and Developing Economies

2021 ◽  
pp. 097215092110476
Author(s):  
Rexford Abaidoo ◽  
Elvis Agyapong
Keyword(s):  
Rule Of Law ◽  
Developing Economies ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
Output Growth ◽  
Sub Saharan Africa ◽  
Coefficient Estimates ◽  
Macroeconomic Risk ◽  
Empirical Estimates ◽  
The Impact

This study examines the impact of macroeconomic risk on political stability, using data compiled from 38 countries in the sub-region of sub-Saharan Africa (SSA), from 1996 to 2018. Macroeconomic risk index employed in this study is constructed using principal component analysis (PCA) from key economic variables. Empirical estimates verifying the relationship in question are conducted using the two-step system generalized method of moments (TS-SGMM) estimation technique. Presented empirical estimates suggest that macroeconomic risk has an adverse impact on political stability, all things being equal. Reported coefficient estimates further suggest that improvement in rule of law among economies in the sub-region significantly moderates the negative impact exerted on the political environment by macroeconomic risk. Coefficient estimates additionally suggest that improvement in governance and institutional variables (corruption control, government effectiveness, regulatory quality and rule of law) augment efforts at promoting political stability even in an environment characterized by volatile output growth.

The effect of sustainability on foreign direct investment inflows: evidence from developing countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Neha Singh ◽  
Cheshta Kapuria
Keyword(s):  
Information Technology ◽  
Developing Countries ◽  
Electricity Consumption ◽  
Political Stability ◽  
Foreign Direct Investments ◽  
International Telecommunication Union ◽  
Fdi Inflows ◽  
Content Type ◽  
Four Dimensions ◽  
Using Data

Purpose This paper aims to analyse, the issue concerning the quality of inward foreign direct investments (FDI) by empirically investigating the role of four sustainability determinants of FDI, namely, economic, environmental, social and governance using data from 22 developing countries of the Asian region over a period from 2000–2016. Design/methodology/approach The methodology adopted to achieve this purpose is dynamic panel estimation (two-step difference generalised method of moments) by developing three econometric models. The data is sourced from the World Development, Worldwide Governance Indicators, International Telecommunication Union and the United Nations Conference on Trade and Development. Findings The econometric results indicate that, in general, control of corruption, political stability and electricity consumption influence sustainable FDI favourably; and CO2 emissions lower the extent of sustainable FDI. The result underlines deficiencies in the information technology aspect, which has a non-significant yet positive relationship with sustainable FDI. A pertinent finding of this study is that the past value of FDI inflows increases the current year’s FDI inflows in developing countries. Practical implications The findings related to gender and information technology aspects found in this paper will be of interest to both researchers and policymakers for substantially reorienting the sustainability attributes to foreign investment. Originality/value The authors’ main contributions are to encapsulate the conceptual framework into an empirical model by combining all the four dimensions, namely, environmental, economic, social and governance for developing countries.

Sign in / Sign up

Export Citation Format

Share Document