Trade Liberalization, Infrastructure Development, and FDI in India and China

2020 ◽  
pp. 1414-1441
Author(s):  
Rajib Bhattacharyya
Keyword(s):  
Trade Liberalization ◽  
Global Economy ◽  
Time Series Data ◽  
Trade Openness ◽  
Analytical Framework ◽  
Infrastructure Development ◽  
China And India ◽  
The One ◽  
Opening Up ◽  
India And China

The two largest economies in Emerging Asia, China and India, are considered to be the ‘power houses' of global economy. China and India adopted the policy of ‘opening up to the outside world' respectively in 1978 and 1991. Trade openness and infrastructure development has been acknowledged as crucial pre-conditions for attracting foreign direct investment (FDI). China's path of development was guided by the so called fast growing nations, which laid substantial emphasis on building strong infrastructural base at great speed. But India, on the other hand did not adopt the strategy of building infrastructure base prior to the growth of demand, like the one which has been followed by most successful Asian countries achieving rapid infrastructure development. So early opening up and improved infrastructure has attracted more FDI in China than in India. So the present study seeks to examine the relationship between trade liberalization, infrastructure development and FDI inflows in India and China using secondary time series data in a comparative analytical framework.

Trade Liberalization, Infrastructure Development, and FDI in India and China

2017 ◽  
pp. 258-284
Author(s):  
Rajib Bhattacharyya
Keyword(s):  
Trade Liberalization ◽  
Global Economy ◽  
Time Series Data ◽  
Trade Openness ◽  
Analytical Framework ◽  
Infrastructure Development ◽  
China And India ◽  
The One ◽  
Opening Up ◽  
India And China

The two largest economies in Emerging Asia, China and India, are considered to be the ‘power houses' of global economy. China and India adopted the policy of ‘opening up to the outside world' respectively in 1978 and 1991. Trade openness and infrastructure development has been acknowledged as crucial pre-conditions for attracting foreign direct investment (FDI). China's path of development was guided by the so called fast growing nations, which laid substantial emphasis on building strong infrastructural base at great speed. But India, on the other hand did not adopt the strategy of building infrastructure base prior to the growth of demand, like the one which has been followed by most successful Asian countries achieving rapid infrastructure development. So early opening up and improved infrastructure has attracted more FDI in China than in India. So the present study seeks to examine the relationship between trade liberalization, infrastructure development and FDI inflows in India and China using secondary time series data in a comparative analytical framework.

Effects of Infrastructure Development on Foreign Direct Investment in Kenya

2016 ◽  
Vol 8 (2) ◽  
pp. 93-110 ◽  
Author(s):  
Carol Teresa Wekesa ◽  
Nelson H. Wawire ◽  
George Kosimbei
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Trade Openness ◽  
Transport Infrastructure ◽  
Series Data ◽  
Infrastructure Development ◽  
Fdi Inflows ◽  
Year 2000 ◽  
Quality Infrastructure

Kenya’s foreign direct investment (FDI) inflows as a percentage of GDP have been increasing negligibly over the last 4 years, increasing from 0.4 per cent in 2010 to 0.9 per cent in 2013. And yet evidence shows that quality infrastructure lowers the cost of doing business and thus attracts FDI. Kenya has visible signs of infrastructure inadequacy and inefficiencies despite the fact that since the year 2000, there has been increased budgetary allocation to the infrastructure sector. This study, therefore, sought to determine the effects of transport, energy, communication and water and waste infrastructure development on FDI inflows in Kenya. The study used annual time series data sourced from Central Bank of Kenya, World Bank and the United Nations Conference on Trade and Development (UNCTAD). Using multiple regression analysis, it was established that improved transport infrastructure, communication infrastructure, water and waste infrastructure, exchange rate, economic growth and trade openness are important determinants of FDI inflows into Kenya. Hence, for Kenya to attract more FDI, continued infrastructural development is key since quality infrastructure affords investors a conducive investment climate in which to operate.

scholarly journals Trade Openness, Economic Growth and the Vicissitude of Labor-intensive Industries: The Case of China

2014 ◽  
Vol 43 (1) ◽  
pp. 7-31 ◽  
Author(s):  
Ma Ying ◽  
Li Jing ◽  
Yu Guansheng ◽  
Yuan Dongyang
Keyword(s):  
Economic Growth ◽  
Industrial Structure ◽  
Negative Impact ◽  
Trade Openness ◽  
Analytical Framework ◽  
Simultaneous Equation ◽  
Policy Implications ◽  
Transformation Theory ◽  
Total Employment ◽  
The One

Abstract In this paper, we use China’s 1986-2008 data to make an empirical analysis on the interrelationship between trade openness, economic growth and the structural change of labor-intensive industries by using simultaneous equation models and a VAR model. Our empirical study leads to the three conclusions. First, trade openness has accelerated economic growth, though with some negative impact on the development of labor-intensive industries; Second, economic growth has had a positive effect on trade openness, but again negatively impacted the development of labor-intensive industries. Third, the expansion of labor-intensive industries has had negative effects on both trade openness and economic growth. Methodologically we rely on the transformation theory of industrial structure as an analytical framework to empirically study these three paradoxical outcomes. We introduce the three variables: trade openness, economic growth and the change of labor-intensive industries, as dependent as well as independent variables into our empirical models. And then we use technological progress, the share of secondary industries to GDP, total employment and investment ratio as control variables in order to test the robustness of the empirical results. In addition to explaining the factors responsible for changes in labor-intensive export industries we also provide two policy implications: First, labor-intensive industries should be scaled down to improve the efficiency of resources allocation. Second, China should timely transform its industrial structure of the export sectors from the one that is dominated by labor-intensive industries to the one that is dominated by capital (technology)-intensive industries so as to induce the export sectors to move in the direction favorable to the transformation of China’s present outward pattern of economic development.

scholarly journals OVER THREE DECADES OF TRADE LIBERALISATION IN NIGERIA: IMPLICATIONS FOR INDUSTRIAL REVOLUTION

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Geraldine E. Nzeribe ◽  
Chinecherem M. Uzonwanne ◽  
Uju R. Ezenekwe
Keyword(s):  
Trade Liberalization ◽  
Structural Adjustment ◽  
Industrial Revolution ◽  
Trade Openness ◽  
Trade Liberalisation ◽  
Trade Policies ◽  
Bounds Testing ◽  
Positive Effect ◽  
Opening Up ◽  
Ardl Bounds Testing Approach

The quest for a self-reliant and industrialised economy made Nigeria adopt several policies, over the years, towards opening up the economy to the industrialised world. The 1986 structural adjustment programme and other successive reforms were aimed at liberalising the economy. This study, using the ARDL bounds testing approach and interaction of trade liberalization dummy with trade openness, investigates if trade liberalization led to industrialization or de-industrialisation during the period under review and finds that trade liberalisation actually led to de-industrialisation but the interaction of trade liberalization and trade openness has positive effect on industrialization. The study recommends that liberalization of the economy should be handled with caution and should be accompanied by dynamic and flexible trade policies that will boost exports, especially industrial exports

Determinants of Foreign Direct Investment in Pakistan: A Comparative Analysis in Democratic and Non-Democratic Eras

2015 ◽  
Vol 1 (1) ◽  
Author(s):  
YASIR KHAN ◽  
ALAM REHMAN ◽  
FARMAN ULLAH KHAN
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
Time Series Data ◽  
Trade Openness ◽  
Series Data ◽  
Dummy Variable ◽  
Unit Root Testing ◽  
Long Run ◽  
Significant Difference

The chief objective of this research is to investigate empirically the determinants which affect Foreign Direct Investment (FDI) inflow in Democratic and non-Democratic eras of Pakistan by using yearly data from 1980 -2014. In this research, six independent variables have been taken along with Dummy which are Gross Domestic Product, Interest Rate, Trade Openness, Inflation Rate, Exchange rate, Dummy variable and one dependant variable which is Foreign Direct Investment. For econometric analysis, annual time series data were collected from the Pakistan Bureau of Statistics, UNCTAD, World Development Indicator (various issues), International Financial Statistics, Global Economy and Economic Survey of Pakistan. This thesis applied advanced econometric methodology which comprises unit root testing and Johansen co-integration analysis. The Vector Error Correction Model (VECM) was employed to identify both the long-run and short run relationship between FDI and its determinants. The dummy variable captured the difference as there is a significant difference between the determinants of Foreign direct investment in Democratic and Non-Democratic eras of Pakistan.

Trajectories of Development and the Global Clothing Industry

2019 ◽  
pp. 54-79
Author(s):  
Nicoli Nattrass ◽  
Jeremy Seekings
Keyword(s):  
Trade Liberalization ◽  
Global Economy ◽  
National Development ◽  
Value Added ◽  
Clothing Industry ◽  
Wage Share ◽  
Development Trajectory ◽  
Development Trajectories ◽  
India And China ◽  
Import Quotas

Chapter 4 provides a history and analysis of development trajectories in the global clothing industry. Trade liberalization (specifically the end of import quotas from January 2005) and the rise of global value chains have changed the nature of the global economy since Lewis’s time. We use UNIDO data on remuneration, output, and employment to identify post-2004 national development trajectories showing that upgrading trajectories can be pro-labour (a rising wage share of value-added) or pro-capital (a rising profit share). Pro-labour trajectories can deliver rising average wages and employment (e.g. India and China) or higher average wages for fewer workers (e.g. Sri Lanka). Pro-capital trajectories can also deliver higher average wages and employment growth (e.g. Vietnam) or rising wages for fewer workers (e.g. South Africa). Downgrading trajectories are typically associated with falling average wages but can be associated with rising average wages (as in Turkey). The desirability of a particular development trajectory depends on the economic context, especially labour market conditions.

scholarly journals The Role Of China And The United States In The Global Economy Of The 21st Century

2011 ◽  
Vol 7 (2) ◽  
Author(s):  
Prasad Padmanabhan ◽  
San Sedki
Keyword(s):  
Global Economy ◽  
The United States ◽  
Recent Attempt ◽  
China And India ◽  
Consumer Prices ◽  
The World ◽  
General Feeling ◽  
Negative Effect ◽  
India And China ◽  
The U.S

The world is characterized by brutal global competition. When talking about competition during much of the 80s and 90s, we generally refer to the triage of Western European, Japanese, and U.S. firms. Today, we have to add firms from Brazil, Chile, China, and India to this elite bunch. This competition is good for the consumer -- prices of manufactured goods have been kept in check, and there is a general feeling of economic prosperity around the world. According to a recent article in The Economist global output has grown by over 4.3 % annually. The growing middle class in India and China has recorded the sharpest increase in the number of billionaires in the last decade; therefore the world has every reason to feel optimistically euphoric, even if China and India will reap a bigger share of the economic pie. In the words of Drucker, India and China are rapidly transforming their economiesthey can now produce technologically sophisticated and financially rewarding offerings that are diminishing American standards. (Drucker, 2004) The concern with the advent of China has prompted more protectionist oriented legislation against China: textiles. The U.S. Congress also blocked a recent attempt by Chinas China National Offshore Oil Corporation (CNOOC) to acquire Chevron. A recent Harris Poll indicated that 40% of the people surveyed believe that China will be stronger than the U.S. within a decade, and over 50% believe that China will have a negative effect on the U.S. economy.

India and the World Economy

China–India ◽  
2014 ◽  
Author(s):  
Vijay Joshi ◽  
Devesh Kapur
Keyword(s):  
Global Economy ◽  
World Economy ◽  
Economic Policies ◽  
Closed Economies ◽  
China And India ◽  
The People ◽  
The World ◽  
Global Action ◽  
Direction Effect ◽  
Opening Up

The paper aims to analyse three questions which arise naturally in examining India’s closer engagement with the world economy in the last two decades. First, how has it evolved and what is its extent? Second, what is its impact on India? Third, what is its impact on the world? Evolution and Extent: For four decades after independence, India’s economic policies had a marked autarkic bias and by 1990 it had become one of the most closed economies in the world. A major goal of the historic reforms launched in 1991 was to reintegrate the country into the global economy, and there has been a progressive move in this direction Effect on India: In post-independent India, many sceptical voices made dire predictions about the effects of opening up, such as deindustrialisation and destabilisation of the economy, and impoverishment of the people. After opening-up, these alarming prophecies did not materialise. Undesirable features of India’s development, such as inadequate poverty alleviation despite rapid growth, have domestic causes and are not the result of globalisation. Effect on the World: India’s effect on the world economy is growing but has to be seen in the context of China’s simultaneous rapid rise. It is very likely that on all the major contentious global economic issues such as exchange rate coordination, trade liberalisation, and climate change mitigation, global action will have to involve the participation of China and India. For good or ill, China and India will matter in the 21st century both for each other and for the world.

scholarly journals Measuring the Effect of Globalization Level to Economic Growth for Turkey in the Duration of Integration to the Global Economy, 1961-2013

2016 ◽  
Author(s):  
Hakan Acaroğlu ◽  
Zeki Kartal
Keyword(s):  
Economic Growth ◽  
Global Economy ◽  
Time Series Data ◽  
Trade Openness ◽  
Series Data ◽  
Foreign Direct Investments ◽  
Economic Policies ◽  
Development Indicators ◽  
Investment Level ◽  
Sustainable Economic Growth

The economic problems due to foreign trade and foreign direct investments are recently solved in the frame of global economy. This study surveys the effects of globalization to the economic growth in Turkey in the period 1961-2013 by the channels of the trade openness (OPENNESS) and foreign direct investments (FDIs) by using annual time series data. The data are obtained from Penn World Tables and World Development Indicators (2014 for Turkey). It is found with setting up the econometric model that, the trade openness is positively affecting the investment level and economic growth in the long term. On the other hand, the results of the applied economy policies are affecting the trade openness and economic growth significantly and positively. Those findings tell that Turkey is a successful actor of globalization process. In addition to this, what the economic policies that Turkey needs to do for a sustainable economic growth are emphasized in the study.

The effect of terrorism on tourism development in Nigeria

2017 ◽  
Vol 23 (8) ◽  
pp. 1673-1678 ◽  
Author(s):  
Korede Ajogbeje ◽  
Oluwatosin Adeniyi ◽  
Oludele Folarin
Keyword(s):  
Time Series ◽  
Time Series Data ◽  
Analytical Framework ◽  
The Other ◽  
Government Policies ◽  
Series Data ◽  
Macroeconomic Variables ◽  
Counter Terrorism ◽  
Tourism Sector ◽  
The One

This article investigated the tourism–terrorism nexus in Nigeria using quarterly time series data within a vector autoregression analytical framework. Unlike extant studies, we gauge the influence of terrorism shocks on the tourism sector specifically on the one hand and broadly the response of some key macroeconomic variables on the other hand. Several interesting results ensued. To sum up these findings, we found a negative response of tourism revenues to terrorist incidents over the long haul as well as adverse effects on other key macroeconomic variables. Therefore, government policies to revamp the ailing economy should be complemented with well-tailored counter-terrorism approaches for effectiveness.

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