Linkages and spillover effects of South African foreign direct investment in Botswana and Kenya

Current technological development changes the people's lifestyle becoming progressively modern. Technological development encourages the rapid digitalization that occurs in all countries. The incapability of a country to meet domestic demand for digital products that are closely related to high technology content drives the import of high technology products. On the other hand, the development of Foreign Direct Investment (FDI) is essential in order to support the development of domestic technology of a country due to its spillover effects. ASEAN 6 is a highly attractive for foreign investors as it has strategic location, large market share and abundant resources. This study examines the influence of FDI and innovation on imported high technology products in ASEAN 6. This research employed the panel data analysis from six ASEAN countries during the period of 2007 to 2016. The results of this study indicated that FDI and innovation have a positive effect on imports of high products technology in ASEAN 6.

Download Full-text

Does Plant Size Matter? Differential Effects of Foreign Direct Investment on Wages and Employment in Indian Manufacturing

Asian Development Review ◽

10.1162/adev_a_00105 ◽

2018 ◽

Vol 35 (1) ◽

pp. 52-80 ◽

Cited By ~ 1

Author(s):

Shruti Sharma

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Critical Mass ◽

Regional Analysis ◽

Spillover Effects ◽

Indian States ◽

Differential Effects ◽

Unskilled Workers ◽

Size Matter ◽

Skilled And Unskilled Workers

This paper examines the differential effects, based on the size of the plant, of industry-level foreign direct investment (FDI) on plant-level employment and the wages of skilled and unskilled workers in India's manufacturing sector. On average, there are strong positive differential effects of increased inward-level FDI for large plants relative to small and average-sized plants in terms of employment and the average wages of both skilled and unskilled workers. Small plants experience negative effects from inward FDI, which can be explained by intra-industry reallocation of output from smaller to larger plants. After conducting a regional analysis, I find positive spillovers to small plants in Indian states that receive large and persistent flows of FDI. This suggests that a critical mass of FDI is necessary for small plants to experience positive spillover effects.

Download Full-text

Foreign Direct Investment and Productivity Spillovers: A Firm-Level Analysis of Bangladesh in Comparison with Vietnam

10.21203/rs.3.rs-154359/v1 ◽

2021 ◽

Author(s):

Arif-Ur-Rahman ◽

Kazuo Inaba

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Spillover Effects ◽

External Effects ◽

Productivity Improvement ◽

Firm Level ◽

Fdi Spillovers ◽

Foreign Presence ◽

Backward Linkages ◽

Level Analysis

Abstract Foreign direct investment (FDI) is expected to generate external effects—usually termed FDI spillovers—for a host country, and these spillovers are thought to have consequences on the productivity of domestic firms. Despite this strong expectation, the empirical findings on FDI spillover are still indecisive. This study examines firm-level panel data to determine the effects of FDI spillover on firms’ productivity in Bangladesh in comparison to Vietnam. We consider both the horizontal and vertical (backward and forward) spillover effects of FDI. We find evidence that Bangladeshi firms gain productivity improvement through intra-industry or horizontal linkages, whereas Vietnamese firms gain through backward linkages. Our findings suggest that increases in foreign presence in the same industry for Bangladesh and in downstream industries for Vietnam are related with increase in output of domestic firms.JEL Code: F2, O1, O3

Download Full-text

Foreign Direct Investment

Advances in Finance, Accounting, and Economics - Handbook of Research on Economic, Financial, and Industrial Impacts on Infrastructure Development ◽

10.4018/978-1-5225-2361-1.ch012 ◽

2017 ◽

pp. 239-257

Author(s):

Kijpokin Kasemsap

Keyword(s):

Foreign Direct Investment ◽

Absorptive Capacity ◽

Direct Investment ◽

Global Economy ◽

Spillover Effects ◽

Advanced Technology ◽

Foreign Investor ◽

The World ◽

External Capital ◽

Management Techniques

This chapter indicates the overview of Foreign Direct Investment (FDI); FDI entries and export; FDI and spillover effects; FDI, human capital, and absorptive capacity; and the significance of FDI in the global economy. FDI is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. FDI offers a source of external capital and increased revenue. FDI can be a tremendous source of external capital for the developing countries, which can lead to economic development. Through FDI, capital goes to whatever businesses have the economic growth anywhere in the world. FDI helps in increasing the output through the utilization of advanced technology and management techniques. FDI benefits investors, businesses, and the global economy. FDI contributes to foreign exchange earnings, employment creation, and the increases in incomes in the global economy.

Download Full-text

Determinants of foreign direct investment in Lesotho: evidence from cointegration and error correction modeling

South African Journal of Economic and Management Sciences ◽

10.4102/sajems.v10i1.539 ◽

2013 ◽

Vol 10 (1) ◽

pp. 99-106

Author(s):

Malefa Rose Malefane

Keyword(s):

Foreign Direct Investment ◽

South African ◽

Direct Investment ◽

Political Stability ◽

Promotion Strategy ◽

Investment Promotion ◽

Regulatory Frameworks ◽

Critical Issues ◽

Red Tape ◽

Error Correction Modeling

Over the past decade, Lesotho has recorded a substantial increase in levels of foreign direct investment (FDI) inflow, part of it prompted by trade privileges. Building on the extant literature, this study provides an empirical analysis of determinants of FDI in Lesotho. The study looks at how macroeconomic stability, regulatory frameworks, political stability and market size affect FDI. The evidence from this study shows that some of the foreign enterprises in Lesotho are there to serve a bigger South African market. Also, the country has benefited from a more export-oriented investment promotion strategy. Critical issues however remain that must be addressed if the country is to attract more FDI and retain existing investors .These issues pertain to bureaucratic red-tape, corruption and political instability.

Download Full-text

Foreign Direct Investment and Productivity Spillover Effects

Encyclopedia of International Economics and Global Trade ◽

10.1142/9789811200595_0012 ◽

2020 ◽

pp. 259-284

Author(s):

Bruno A. Merlevede

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Spillover Effects

Download Full-text

Trade Agreements and Global Value Chains: New Evidence from China’s Belt and Road Initiative

Sustainability ◽

10.3390/su12041353 ◽

2020 ◽

Vol 12 (4) ◽

pp. 1353 ◽

Cited By ~ 2

Author(s):

Fei Peng ◽

Lili Kang ◽

Taoxiong Liu ◽

Jia Cheng ◽

Luxiao Ren

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Structural Equation ◽

Spillover Effects ◽

Trade Agreements ◽

Global Value Chains ◽

Equation Model ◽

Value Chains ◽

Positive Effects ◽

Belt And Road

This paper investigates the relationship between China’s trade agreements (TAs) and partner countries’ upgrade in global value chains (GVCs). We focus on the experience of China and relate China’s TAs with one belt and one road (OBOR) initiative. A structural equation model (SEM) is applied on a dataset including 216 countries and regions to identify the direct and indirect effects of China’s TAs and OBOR initiative on its export, outwards foreign direct investment (OFDI) and partner economy’ GVCs upgrade over the period 2010–2015. We find that China’s TA partner countries are more likely to be included in the OBOR initiative than those non-TA partner countries. The positive effects of China’s TAs and OBOR initiative on China’s export, outwards foreign direct investment (OFDI) and partner countries’ upgrade in GVCs differ across country groups at the different locations of GVCs. Both vertical and horizontal spillover effects exist in China’s TAs. Therefore, the partner countries at low end and middle of GVCs might benefit more from TAs with China than those richer countries at the high end of GVCs.

Download Full-text