PurposeThe purpose of this paper is to appraise the influence and challenges of direct disinvestment or through foreign direct investment (FDI) in the Kingdom of Bhutan, particularly to identify the inflow of disinterment post pandemic and how it can be improved.Design/methodology/approachThe authors investigated the influence of FDI on Bhutan’s economy by analyzing secondary published data by Asian Development Bank and government agencies of Bhutan. To find out the role FDI has played in the growth of the Bhutanese Economy.FindingsThe FDI is not playing a major role in the nation’s economy so far. However, its potential cannot be ignored as there is a need for foreign currency and expertise in the country. Furthermore, government policies are directly influencing the inflow of foreign exchange that affects the Bhutan’s economy. FDI has not increased considerably because of self-imposed restrictions blocking government policies.Research limitations/implicationsThis research is based on the data collected from secondary sources, which could be considered as the main limitation of this study. The Himalayan kingdom is not much open to the outside world in terms of the publication and availability of the data. Researchers put their best effort in retrieving secondary data from authentic sources.Practical implicationsThis research has direct implications from an institutional perspective on the government policies and procedures. This study throws light on the elements that might help in improving Bhutan’s economy, employment and productivity for an overall development of economy.Social implicationsBhutan and similar countries need to understand the pros and cons of having FDIs. This study might help the government and the civil society to understand the trends FDI has triggered in the nation over last 30 years, and will help them to make appropriate policies and regulations dealing with foreign investments.Originality/valueThis paper underwrites the influence of disinvestment on Bhutan’s economy, which can revolutionize business, entrepreneurship and institutions. This research was conducted by analyzing secondary data released by authorized agencies, which indicated the lower inflow of foreign exchange and how to improve further.

PurposeThe purpose of this study is to investigate the effect of foreign direct divestments (FDD) on economic growth and development in South Africa for the period 1991–2019.Design/methodology/approachThe non-linear autoregressive distributed lag technique is used for the empirical analysis. Two regression models are specified, one for economic growth and the other for development which is proxied by poverty.FindingsThe empirical results suggest that foreign divestments are detrimental to both economic growth and development. Furthermore, the results suggest that the negative effects of foreign divestments outweigh the positive effects of FDI inflows.Practical implicationsSouth African policymakers should thus use policies that promote the retention of FDI inflows together with those that attract inflows. Furthermore, policies that promote economic freedom such as transparency and reduction in the time frame for granting government permits for business operations are also of paramount importance.Originality/valueMost of the available literature on FDD focuses on the firm perspective. Available studies on the effect of FDD on economic growth do not investigate the effect of divestment on economic development. Economic growth is a necessary but not a sufficient condition for the achievement of socioeconomic development.

PurposePrior studies have found evidence for the role of political instability on foreign divestment (FD) where a high level of instability encourages FD decisions. Therefore, this paper aims to examine how the food security level explains the linkage between political instability and FD.Design/methodology/approachThe current study adopts the system generalised method of moment (GMM) to achieve accurate and reliable empirical evidence for 60 developing countries in the period 2011 to 2020.FindingsThe results demonstrated a negative and significant relationship between political instability and FD on food security. This suggests that political instability’s impact on divestment tends to be lower in countries with better levels of food security. Other controlled variables, such as economic growth, human capital and trade openness, also have a negative effect on FD, discouraging FD.Practical implicationsAs a result, policymakers could take steps to ensure that food security levels reach acceptable levels, as food security has been linked to a country’s political stability.Originality/valueTo the authors limited knowledge, no studies have looked at the relationship between political instability and food security in determining a country’s FD. Our study aims to analyse this issue because the current global crisis, which is being caused by high food prices, will push millions of more people into severe poverty and exacerbate hunger and malnutrition

Purpose The purpose of this study is to estimate revealed comparative advantage and normalized revealed comparative advantage (NRCA) indices of India’s computer and information services (CIS) export competitiveness with regard to information technology (IT) competing developing nations, such as China, Philippines, Malaysia and Brazil. Design/methodology/approach Using annual data of total exports for CIS, transportation (TNS), travel (TVL) and insurance (INS) services under service categories of the balance of payment, the present study estimates the pattern of comparative advantage (CA) in India’s CIS exports with respect to IT competing developing nations such as China, Philippines, Malaysia and Brazil from 2000 to 2018. The choice of the study period is determined by the availability of consistent data on IT service exports of these nations. The study also estimates the export position of CIS export in comparison to India’s traditionally strong commercial services export of TNS, TVL and INS during the study period. Findings Both the indices showed that India had a strong CA in CIS compared to the selected nations, indicating India’s relative export performance to be stronger than that of China, Malaysia, Philippines and Brazil. The cross-service index showed that India’s relative specialization level in CIS with respect to the world’s average specialization level was stronger than its relative specialization level in TNS, TVL and INS services. Furthermore, The NRCA cross-nation index showed that India’s NRCA index score has been declining since 2010 with respect to these nations, which implied a decline in the competitiveness of CIS. On the other hand, NRCA has increased in the case of Philippines, Malaysia and Brazil for most of the period post-2010. Research limitations/implications IT is a dynamic area of economic activity, and when the pace of change is so rapid, the relevance of individual factors can change over time. The study period is also limited to the available data. Practical implications The paper has implications for attaining sustainability in IT export growth. It is suggested that policies are directed at enhancing the overall performance of IT sector. Originality/value The novelty of the present study lies in the estimation of India’s competitiveness in IT exports in relation to the group of reference countries. With its policy recommendations, this research is helping to shape the sustainability of the IT sector.

PurposeThis study aims to identify the impact of foreign direct investment (FDI) on economic growth in Morocco depending on each origin country, including Spain. This study uses a linear model to measure the marginal impact of FDI on the growth of Morocco. This marginal effect allows to compare the different effects of FDI among countries of origin. Also, the marginal effect helps to measure the rate of substitution between FDI in an easier way than the other specifications of the model. The second step determines the substitute for Spain in case he decides to divest its FDI from Morocco to maintain the economic growth.Design/methodology/approachUsing data of FDI from 13 countries of origin from 1995 to 2020 and two estimation methods (Dynamic Ordinary Least Squares and Autoregressive model), this study aims to measure the marginal impact of the divestment of FDI from Spain on growth. Then this study estimates how much Morocco should attract FDI from other countries when Spain divests. This study uses the differential calculus, assuming a perfect substitution between FDI from different countries. This calculus implies an indifference curve between FDI from Spain and FDI from another country where we deduct the substitution rates between FDI.FindingsThe results indicate that the FDI from Spain and France are the only ones to impact positively Moroccan economic growth. The FDI coming from Germany, Holland, China and Turkey have a negative impact, whereas those from the USA, Italy, UK, Switzerland and Gulf countries: Saudi Arabia, Kuwait and UAE have an insignificant effect. Second, using the differential calculus, the result indicates that when Spain divests 1m dirhams of its investments from Morocco, France would have to increase its own by 0.1509m dirhams so that Morocco could maintain its economic growth.Research limitations/implicationsThe research focuses only on economic growth, neglecting the impact on other aggregates, such as total factor productivity, technology transfer and employment. Also, this research marginalized the sectorial analysis of FDI by the source to better understand the divergent effects.Originality/valueThis paper fills a research gap when analyzing the effect of FDI on the host economy depending on country-of-origin. In addition, it contributes to the body of literature by constructing the rate of substitution between the different sources of FDI to adapt to divestment policy.

Purpose This paper aims to enhance empirical research on foreign divestment and international relocation by multinational firms are still limited and understudied, although these issues have been a frequent phenomenon and carry important economic implications. Design/methodology/approach The paper investigates the trends of foreign divestment in South Korea and examines firm- and host country-level determinants in total, manufacture and service sectors from 2010 to 2019. Findings Using probit model analysis, the main findings are first, among the firm-level factors, sales revenue and parent firm dummy are shown as negative and significant determinants of foreign divestment especially in manufacturing sector. Second, among the country-level factors, gross domestic product growth rate and regulatory quality that measures perceptions of sound policies that promote private sector development are shown negative and significant determinants of foreign divestment. On the other hand, relationship between the environmental policy stringency and foreign divestment is shown positive and significant. Originality/value The results suggest that these nonfirm-specific characteristics are also important factors in firm decision to divest from the host country.

Purpose The purpose of this paper is to examine the influence of the daily growth in confirmed COVID-19 cases in Malaysia and government interventions on the daily returns of financial times stock exchange Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI) and eight selected Bursa Malaysia sectorial indices for the period January 29, 2020 to March 31, 2021. Design/methodology/approach This paper adopts the multivariate generalized autoregressive conditional heteroscedasticity model to determine the effects for the entire study period and four sub-periods, i.e. pre-government intervention, movement control order (MCO), conditional MCO (CMCO) and recovery MCO phases. Findings This paper finds no evidence of the effect of the daily growth in confirmed COVID-19 cases on the returns of FBMKLCI and eight Bursa Malaysia sectorial indices for the full study period. However, the former has exerted different effects over the four sub-periods. Sectors that are positively affected for the MCO period are financial services and real estate investment trust. Yet, these sectors are negatively affected for the CMCO period along with the industrial products and services and technology sectors. Sectors that consistently demonstrate statistically insignificant results are construction, energy, plantation and utilities. Originality/value This study makes an initial attempt to investigate the influence of the COVID-19 pandemic on the returns of Bursa Malaysia sectorial indices over different phases of government interventions in Malaysia.

Purpose This paper aims to investigate asymmetric long-run effects of bilateral exchange rate on US trade imbalances with China and to examine if the effects are the same under China’s fixed and managed floating exchange rate systems. Design/methodology/approach The authors estimate both linear autoregressive distributed lag (ARDL) model assuming symmetric effect and nonlinear ARDL model assuming asymmetric effect of exchange rate on US trade deficit with China. The authors use data from 1994Q1 to 2005Q2 (under Chinese fixed exchange rate system), from 2005Q3 to 2021Q3 (under Chinese managed floating exchange rate regime), and from 1994Q1 to 2021Q3 (overall data). Findings The Chow test indicates 2005Q3 is a structure break point. Further, the results suggest the effects of bilateral exchange rate on US trade deficit with China are not the same under different exchange rate systems. The asymmetric long-run effect of bilateral exchange rate does exist. The results also demonstrate the depreciation of Chinese currency will not significantly affect US trade imbalances with China. Research limitations/implications Based on the results, the Chinese Government should embrace a more transparent and flexible exchange rate system. It will not significantly hurt Chinese trade balance, but it will help to reduce the tension between the USA and China. Originality/value All previous literature (except two papers) related to the effect of Chinese exchange rate on US trade deficit with China assume the effect is symmetric, and all (except one) use data under different Chinese exchange rate systems. To the best of the authors’ knowledge, this is the first paper that studies the possible asymmetric long-run effect of bilateral exchange rate under different Chinese exchange rate regimes.

PurposeThis study aims to examine the relationship between board gender diversity and environmental disclosure (ED) in the banking sector.Design/methodology/approachData pooled from Bloomberg database on 2,116 banks from the period of 2007 to 2016 ends up with 7,951 observations. Panel regression model that include random effects was used to test study hypothesis.FindingsThe findings showed that when female board members were between 21% and 50%, it had a significant positive effect on the ED disclosure. Furthermore, the results showed that bank located in non-OPEC countries have better gender diversity in their board and greater ED than non-OPEC countries. Moreover, the results demonstrated that the board diversity and ED are better in banks that are located in countries that ranked 26–50 in oil production.Originality/valueAlthough findings of this research clearly discussed the importance of board diversity in enhancing ED, the results of this study give us a crucial signal as a wake-up call for regulators to start considering women quota on board for higher ED.