Development In Less-developed Countries Research Articles

Research for understanding and promoting innovation by small-and-medium sized firms in the least developed countries

ABSTRACT With a strong policy focus on small and medium-sized enterprises (SMEs) in the least developed countries (LDCs), there is a demand for information that can inform efforts to promote innovation, technological development and SME development. This paper presents results from a bibliometric analysis of publications on SME development in the LDCs. It was informed by different perspectives on how SME innovation occurs: mainstream emphasis on formal research and development and a framework emphasizing learning and organizational capabilities. The results show that there are low levels of research on SME development in the LDCs and generally there is limited coverage on topics that can inform SME innovation and technological development in SMEs. Our findings highlight the need for further research on SME development in LDCs that is informed by a wide perspective of what innovation and technological development are in these countries and can guide policy efforts.

Analysis of the Impact of Foreign Direct Investment on the Integration of the Automotive Industry of Iran into Global Production Networks

Foreign Direct Investment (FDI) has long been recognized as a crucial driver of economic growth and development in less-developed countries and their integration into Global Production Networks (GPNs). FDI not only brings capital from the core countries but also technology, innovation, and know-how knowledge that can upgrade the capabilities of host automotive industries. On the other hand, FDI can also have negative impacts on host countries if it leads to significant import dependency. In the case of the Iranian automotive sector, the industry greatly benefited from FDI, with Western carmakers dominating the market. Over time, various types of know-how knowledge, including joint ventures (JVs), trade licenses, and technical assistance, have been provided, helping Iran upgrade its automotive industry. While after the severe geopolitical obstacles imposed by both the EU and the U.S., the industry became over-reliant on the car and spare parts imports, and the lack of emphasis on knowledge transfer further affected the growth and development of the Iranian automotive sector. To address these challenges, current research has adopted a descriptive-analytical methodology to illustrate the gradual changes occurred with foreign suppliers through FDI. The research finding shows that after the two-phase imposed sanctions, the detrimental linkages created by overreliance on the car and spare parts imports without any industrial upgrading negatively affected the growth and development of the national and assembled products of the Iranian automotive sector.

Strategic Opportunities Aspect of CSR for Improving Location Advantages in Developed and Emerging Markets

This case study examines how a Japanese company uses CSR and ESG activities to incorporate a new global expansion strategy and strengthen its stakeholders’ relations in different locations around the world. The author uses a case study method with a single setting, and multiple units of analysis and pattern matching among 39 regions and countries, divided into home and host countries. The host countries are additionally divided into ‘developed’, ‘emerging’, and ‘least developed’. This study contributes to the extant literature by showing that both developed and emerging markets create strategic assets for the company. It also proved MNE’s stakeholders in emerging and developed markets determined the CSR practices because many developed countries need CSR activities to support vulnerable groups within their societies. This study explores the under-researched area of MNEs’ CSR activities regarding poverty and development in least-developed countries.

Development strategy, resource misallocation and economic performance

This paper provides a consistent explanation for the distinct economic performance among the Less Developed Countries (LDCs) from the perspective of government development strategy. We argue that government development strategy and resource misallocation are key determinants of economic development in LDCs, i.e. China. Descriptive statistics show that China's capital-to-output ratio is negatively correlated with per-capita output, which contradicts the predictions of standard neoclassical growth theory. We incorporate governmental heavy-industry-oriented development strategy into a two-sector model to understand this puzzle. Our theoretical model reveals that a greater emphasis on heavy-industry-oriented development results in a larger capital-to-output ratio and lower per-capita output. We test our hypothesis against other theories using prefecture-level and firm data from China. We find that a larger capital-to-output ratio is associated with a greater degree of misallocation driven by government development strategy. A heavy-industry-oriented strategy will result in greater misallocation and lower TFP, which is consistent with our hypothesis.

Information Literacy Education (ILE) through School Project Work: Stories From Developing Country Teachers

This paper explores information literacy education (ILE) through a school project work in selected Malaysian schools. This qualitative study investigates how IL is taught by teachers and experienced by students on a big scale,nationwide-standardized school project. The research participants were five history teachers and twenty-three students from four schools. The data collection techniques employed were teacher’s individual interview; students’ focus group interview; document analysis (project journal and project report); and classroom observation. The findings show that while teachers employ five different teaching techniques to facilitate the students with their project, these efforts were geared towards accomplishing a predetermined learning output, rather than guiding students on how to do research. Teachers relied heavily on project guidelines to help the students produce a pre-determined project report, suggesting shallow research instruction. Results on students’ project experience similarly reveal compelling evidence of students’ preoccupation with the project guideline to produce their report. They only employed basic searching strategies and did not explore more sophisticated search techniques. The students used information mainly from the Internet resources that directly answered their project questions, and did not evaluate or filter information as suggested by IL models. They also were found to have serious problems concerning the ethical use of information. Further findings suggest that IL was not adequately delivered and integrated by teachers in classrooms. The findings are hoped to provide baseline information on IL development in less-developed countries where IL awareness is still minimal.

Barriers, needs and potential solutions to reducing vulnerability to global environment change for least developed countries in the Asia-Pacific Region

Least Developed Countries (LDCs) face a myriad of challenges, such as extreme poverty and immense pressure on natural resources that increase vulnerability to all forms of hazards. A synthesis on Global Environmental Change (GEC) and Sustainable Development in LDCs conducted in 12 Asia Pacific LDCs,

Choice of Energy Paths: Its Implications for Rural Energy Poverty in Less Developed Countries

Rural energy poverty constitutes a global concern, as it infringes on human well-being and the social and economic development prospects of a country. In recent years, renewable energy has gained increasing traction for its potential to alleviate rural energy poverty in less developed countries (LDCs). Yet despite the value of renewable energy in mitigating energy poverty, no cross-national study that assesses the effects of renewable energy on rural energy poverty is known to exist. This study also recasts the relationship between energy regimes and energy poverty, by drawing on perspectives from energetic theory and environmental inequality. The findings reveal that renewable energy does exert a positive effect on rural electrification in the countries studied. In addition, higher gross national income (GNI) per capita and use of conventional fuels are found to relate positively to rural electrification. The results point to the relevance of energy regimes and their role in the development of LDCs.

Pulling in the Indigenous Fishery Cooperative Net: Fishing for Sustainable Livelihoods and Food Security in Garden Hill First Nation, Manitoba, Canada

Cooperatives offer a vehicle for community development in less-developed countries as well as in economically challenged indigenous communities in developed countries. The authors engaged in a participatory community development research project involving students and faculty working with the Island Lake Opakitawek Cooperative (ILOC), a fishery cooperative in the remote community of Garden Hill First Nation (GHFN) in Manitoba, Canada. The project included four general components: (a) a sustainable livelihoods assessment; (b) a basic community food security assessment; (c) strategic business analysis; and (d) a business plan. The analysis shows that traditional foodways and livelihoods take advantage of prodigious natural capital, and that this indigenous cooperative offers potential to improve the fishers' quality of life. However, we also found that fishers' livelihoods and the ILOC were not sustainable without significant changes. Together, high operating expenses and low prices for whole fish are impoverishing fishers. Despite the poor return on investment, commercial fishing has continued for decades due to its connection with traditional hunting and fishing activities and the region's high unemployment level. Working collaboratively with the ILOC and GHFN community we have been able to reinvigorate the cooperative based on local food provision and fair trade.

Book Reviews

Book Reviews

A Critical Reflection on the Role of Stakeholders in Sustainable Tourism Development in Least-Developed Countries

While investigating the implementation of community-based tourism in least-developed countries (LDCs), the critical role of stakeholders in sustainable tourism development became apparent. External stakeholders, in particular, develop theory models and define policy for translation into the field yet there is little critical consideration of their role and influence. This article encapsulates insights achieved by the researchers at the interface of theory and practice in a challenging LDC setting.

Epistemic and Technological Determinism in Development Aid

Since the turn of the millennium, the major development agencies have been promoting “knowledge for development,” “ICT for development,” or the “knowledge economy” as new paradigms to prompt development in less-developed countries. These paradigms display an unconditional trust in the power of Western technology and scientific knowledge to trigger development—they taste of epistemic and technological determinism. This article probes, by means of a genealogy, how and when development cooperation began adhering to epistemic and technological determinism, and which forms this adhesion has taken over time. The genealogy shows, first, that knowledge and technology have always been integrally part of the very “development” idea since this idea was shaped during enlightenment. Second, while the genealogy reveals that epistemic and technological determinism were embedded in the development idea from the very beginning, it also illustrates that the determinism has always been challenged by critical voices.

Local Economic Development in the Era of Globalization: The Case of Republic Of Macedonia

This paper makes a case that discerning what globalization means for local economic development strategies, structures and policies becomes a formidable governance challenge today. The thesis of this paper rests on the assumption that Local Economic Development (LED) policies as an integral part of the global socio-economic development, continuously occupy a greater importance in the overall economic development in less-developed countries as a way of resisting the forces of globalization. The main goal of this research paper is to find quantitative and qualitative justification for an appropriate governance structure for fostering local economic development. First, we argue that globalization debates engender controversy. One of the views is that it is a process which engages with trade, communication, technology, culture and the flow of capital across national boundaries and another that globalization has led to marginalization and exclusion because of downward pressures on systems of social protection, changing labor market conditions and increasing inequality in wages. Then, drawing on large national surveys of local economic development policies, the paper explores the policy strategies for community development that localities are employing as a response to globalization. Finally, the special focus of this paper has been given to the case of local economic development in the Republic of Macedonia.

The Role of Remittances as More Efficient Tool of Development Aid in Developing Countries

This paper examines the effectiveness of remittances and official development assistance (ODA) in developing countries. It compares the outcomes of aid poured into the economies of the Third World for decades without any visible effect and remittances transferred by emigrants to their countries of origin which proved to be quite effective. We find that remittances have a stronger net positive effect on the increase of GDP per capita in developing economies than development aid. In addition, remittances tend to be higher than ODA funds, they are absorbed by 80-90 per cent (in comparison with 50 per cent of aid budgets spent on administrative and other costs) and do not hinge on institutional quality. The paper advocates the importance of remittances over ODA and supports the wide usage of coherent development policies executed by the developed Western economies with an aim to enhance transparent and efficient remittance transfers as one of the best methods to promote development in less-developed countries (e.g. economies in Africa, Asia or Latin America).

Remittances or technological diffusion: which drives domestic gains from brain drain?

This article examines the impact of technological diffusion and international migrants’ remittances on the economic development of less-developed countries. The hypothesis that skilled workers, living and working overseas, can effectively channel technological knowledge back to their home country, which in turn contributes to that country's economic growth, is tested utilizing data on the stock of high-skilled workers from 50 developing countries working in industrialized countries over the last two decades. Results obtained lend strong support to this hypothesis. In addition, the effect that remittances from workers in developed countries, which are used for investment purposes in developing countries, have on the rate of growth of those developing economies is investigated. Our empirical evidence indicates that this remittance channel exerts a significant, positive impact on growth, although quantitatively the contribution of such investment-oriented remittances in driving sustainable economic development appears to be somewhat smaller than that of more general technological diffusion.

Would preferential access measures be sufficient to overcome current barriers to CDM projects in least developed countries?

Financial support for Clean Development Mechanism (CDM) projects in under-represented host countries was agreed on at the 2009 Copenhagen climate conference. The EU rules include special import quotas for certified emission reductions (CERs) from least developed countries (LDCs). This paper discusses whether these measures can contribute to overcoming barriers to CDM development in LDCs, how programmes of activities (PoAs) are performing and how CDM projects and PoAs contribute to sustainable development (SD) in LDCs. CER supply and demand scenarios for 2013–2020 show that preferential access measures for LDCs would not have an important impact on CDM in these countries if the barriers for project implementation are not overcome. The specific CDM projects and PoAs found in LDCs yield potentially high SD benefits. Through a comparison between the climate regime and the Lomé Convention, a preferential access agreement in agricultural trade, we conclude that not just preferential access is important, but also reduced access costs and the removal of underlying barriers. Increased incentives for added-value products characterize Lomé's success stories. For the climate regime, this could be translated into additional financial incentives for CDM projects with added value. As LDCs host a high share of them, PoAs could constitute an opportunity here.

The logarithmic relationship between collective efficiency and technology development in wood enterprises in Kenya

Small Manufacturing Enterprises (SMEs) contribute to economic dynamism, entrepreneurship and have potentials to contribute to sustainable industrial development in less developed countries (LDCs). They are however handicapped since they lack the capacity to develop infrastructure and acquire technologies that give them a competitive advantage in the global market. This paper explores collective efficiency as a paradigm that could inform technology development in LDCs to enhance SMEs growth. Data was obtained from wood based enterprises owner/managers (284) who were sampled from three districts Kericho, Nakuru and Uasin Gishu all in the Rift valley province of Kenya using multistage sampling strategy. Data was collected by use of questionnaires, observation and documentary analysis. Using regression analysis the study found the relationship between collective efficiency and technology development in wood based enterprises to be logarithmic. This revealed that the rate of change in technology development is higher with higher levels of joint actions up to a certain maximum point when further joint actions do not benefit the wood based enterprise. These findings demonstrate the need for a paradigm shift in the support of SMEs sector in order to sustain industrial development. The use of collective efficiency paradigm in the planning and development of infrastructure that anchors technology development for the SMEs is recommended. Key words: Wood based enterprises, collective efficiency, technology development, small manufacturing enterprises.

Tourism and development challenges in the least developed countries: the case of The Gambia

Although tourism has long been promoted on the basis of its potential contribution to development, attention has been focused more recently on the developmental role of tourism in least developed countries (LDCs). Not only are a number of LDCs currently achieving the world's highest growth rates in tourist arrivals, but it is claimed that tourism should be regarded as an integral element of their development policy. However, despite the apparently successful growth of tourism in many LDCs, wider economic growth and development has, in many cases, not occurred. Drawing on research in The Gambia, this paper explores the challenges to tourism-induced development in LDCs. It reveals that tourism is not immune to the factors that determine a county's LDC status but that, although claims of tourism's developmental role should be treated with caution, the economic contribution of tourism may be enhanced in a number of ways.

Training and Intervention in South Africa

Training and Intervention in South Africa

Finance, Banks and the Stability of Emerging Markets

Access to finance and sound banking institutions are two critical elements in any attempt to promote economic development in least-developed countries. Nevertheless, only in recent years have existing relations between financial liberalization, banking practices and the economic performance of emerging market economies been investigated in depth. In this review essay, prompted by a recent book, “Finance for Development” by Barbara Stallings, we discuss some important issues in this promising field of applied research.

Funding Self-Sustaining Development: The Role of Aid, FDI and Government in Economic Success

This article challenges a long-held development-policy assumption that aid and foreign-direct investment (FDI) serve as substitutes or complements in accelerating the development of the world's poorer countries. We show both theoretically and empirically that aid and FDI affect development differently. Aid contributes powerfully to both economic growth and human development, and the higher the level of human capital in a country, the more aid contributes. By contrast, FDI, at best, has no effect on economic growth and actually slows the rate of human development in less-developed countries. We find no evidence that the degree of democratic responsiveness in government conditions the effectiveness of either aid or FDI, although we do find that democracy independently increases human development in all but the most developed countries. Our results demonstrate that FDI and aid are not, and cannot be, substitutes in the development of the world's poorer countries. Nor even can they be thought of as complements—certainly not at mid to low levels of development. In the end, poor countries need democracy and aid, not FDI.We are extremely grateful to Susan Rose-Ackerman, Gustav Ranis, Frances Rosenbluth, Kenneth Scheve, and participants at the Leitner Political Economy Seminar at Yale University in December 2003 for very helpful comments. We also received valuable suggestions from two anonymous reviewers. Stephen Kosack would like to thank the National Science Foundation for the support of a Graduate Research Fellowship.