Economic Growth In Host Countries Research Articles

Analysis of the impact of the Olympic Games on the economic growth of host countries based on the ARIMA model

The purpose of this paper is to investigate the impact of the Olympic Games on economic growth, with a particular focus on changes in gross domestic product (GDP) in China and the United States. By applying the ARIMA model, the GDP trends of the two countries during the period when they do not host the Olympic Games are predicted. The construction of the ARIMA model involves three core steps when dealing with time series data. First, the collected data are analyzed in depth and reasonable assumptions are made on this basis. Next, in view of the characteristic volatility of time series data, the difference method is used to eliminate non-stationarity and ensure the smoothness of the data series. Finally, by combining the observations with the lagged observations of the moving average model residuals, to ensure that the model can accurately capture the characteristics of the time series data. After completing the model construction, this paper further compares the changes in GDP and tourism indicators of the two countries before and after the Olympic Games. Through the comparative analysis, it is confirmed that hosting the Olympic Games has a positive contribution to the economic growth of the two countries. These conclusions not only provide valuable references for policy makers, but also provide strong support for the economic impact assessment of cities hosting the Olympic Games in the future.

FDI Inflows and Economic Growth: A Novel Application of Dose-Response Functions

In this work we estimate different dose-response functions linking FDI inflows received by developing countries with their economic growth. Although the impact of FDI on the economic growth of host countries has been widely investigated in literature, findings have been ambiguous. Our study proposes a novel ‘dose-response’ approach which allows the response of recipients to different amounts of treatment in terms of FDI inflow to be observed. Our findings show that the estimated dose-response functions are statistically significant for treatment values greater than 20%, after the treatment has been rescaled to a percentage measure of the maximum dose observed, and increasing at a decreasing rate, therefore suggesting three relevant results: a) a country receiving a greater amount of FDI inflows will present a higher economic growth; b) there might be a minimum amount of FDI inflows required to reach some policy effectiveness; c) the initial amounts of FDI inflow are more effective than the subsequent ones. Results will help policymakers to better isolate the effect of FDI on economic growth and conduct informed FDI cost-benefit analysis.

The Mediating Role of Governance in Foreign Direct Investment Inflows and Economic Performance Nexus: New Evidence from Nigeria

The recent FDI-growth literature suggests that the varying effects of foreign direct investment on economic growth in host countries might be due to certain domestic factors that determine the benefits of FDI. Among these factors is the quality of governance; thus, this study examined how the interaction between foreign direct investment (FDI) and governance affects the performance of the Nigerian economy by relying on annual time series data spanning 1986 to 2021. The results from the autoregressive distributed lag (ARDL) model revealed that the interaction between governance and foreign direct investment exerts a positive and highly significant impact on economic performance. Apparently, the interaction between governance and foreign direct investment appears to be elastic. The foregoing suggests that governance is a significant moderating factor between foreign direct investment and economic performance in Nigeria.

How Do Overseas Economic and Trade Cooperation Zones along the Belt and Road Affect the Economic Growth of Host Countries?

Based on the data of countries along the “One Belt and One Road” from 1998 to 2017, this paper uses the progressive Difference-in-Difference to analyze the impact of overseas economic and trade cooperation zones on the economic growth of host countries, which shows that the establishment of overseas economic and trade cooperation zones significantly promotes the economic development of host countries. Additionally, the specific mechanism of overseas economic and trade cooperation zones to promote the economic growth of the host country is analyzed using the mediating effect model, and the study shows that the overseas economic and trade cooperation zones can encourage the economic development of the host countries by attracting foreign investment inflows. Further heterogeneity analysis reveals that overseas economic and trade cooperation zones have stronger economic boosting effects on countries with lower income levels and poorer business systems. Different types of overseas economic and trade cooperation zones have other economic boosting effects on host countries. Among them, the economic impact of industrial, agricultural, and high-tech zones is significant, while the influence of logistics and comprehensive industrial zones is not yet significant. Finally, the paper carries out further discussion based on the above findings.

Foreign Trade, Foreign Direct Investment and Economic Growth in Nepal

One of the important issues that persist in the economic literature is the relationship between foreign trade, foreign direct investment and economic growth in host countries. This issue has become renewed interest in recent years mainly for countries suffering from unemployment problems and lack of technological progress. This paper analyzed this issue for Nepal using time series data over the period of 1995-2020.The ARDL bound test approach to co-integration has been used to analyze long-run and short-run relationship between variables. The study found that there is a co-integration between foreign trade, FDI and economic growth. The study also found that there is a strong positive interaction between foreign trade and FDI in progressing economic growth both in the short-run and long-run. The results show that the foreign trade and FDI can play a significant role to accelerate the economic growth of Nepal.

Global diversification, host-country environments, and corporate philanthropic giving: Evidence from Chinese multinational corporations

Previous studies suggest that multinational corporations (MNCs) are likely to participate in more philanthropic activities because these activities could facilitate their operation in host countries. Focusing on a sample of Chinese MNCs between 2006 and 2019, this study investigates whether more diversified firms have higher corporate philanthropic giving (CPG), and the moderating effect of host-country environments. The results indicate that there is not a significant relationship between firm's global diversification and CPG. Nonetheless, we find that a host country's cultural distance, institutional quality and country risk negatively moderate the global diversification–CPG relationship, while a host country's economic growth positively moderates this relationship. Our findings suggest that although global diversification increases the incentives for Chinese firms to engage in philanthropy, it also constrains on their involvement in such activities. Furthermore, the precise effect of global diversification on a firm's CPG is conditional on the environment of its host country, and the host country that has large cultural difference to home country, good institutional quality, high risk and bad economic prospect leads to decrease in MNCs' CPG. Our study provides new evidences for the determinants of CPG in MNCs from emerging markets.

The impact of Chinese foreign direct investment on host country economic growth

Employing an institutional – FDI – economic growth lens the purpose of this paper is to identify and explain the impacts of Chinese FDI (CFDI) on host countries’ economic growth. While extensive research has been undertaken regarding determinants of CFDI, little is known about the actual outcomes of CFDI in recipient countries. Based on a sample of 22 countries over the period 2003–2018, our results identify that while general flows of FDI exhibited positive impacts on host countries’ economic growth, CFDI had a negative effect on host country economic growth. From the host country perspective, given the emphasis that is placed on FDI as an instrument of growth and development, our findings raise questions about what host countries are actually gaining from CFDI and the potential implications of whether pursuing the ‘Beijing Consensus’ as opposed to the ‘Washington Consensus’ is really in the long-term interests of countries.

Investment Motives of MNES, FDI in Specific Sectors and Economic Growth

Drawing on mainstream theories on investment motives of multinational corporations (MNCs), known as eclectic paradigm (Dunning, 2000), and foreign direct investment (FDI)-growth nexus (Borensztein et al., 1998), this paper examines how different investment motives of MNCs affect the economic growth in host countries. It first constructs a theoretical framework in which different motives of MNCs drive FDI into different specific sectors and, in turn, affect host countries' long-term economic growth. The paper then tests the theoretical predictions on a panel of 16 least developed countries in Africa during the 2001-2017 period. Estimation results, obtained from the generalised method of moments, reveal significant and positive effects of FDI in manufacturing and FDI in agri-aquaculture but insignificant effects of FDI in utility supply and FDI in infrastructure construction on GDP growth. While the growth effect of FDI in extractive sectors is mostly negative, it is statistically insignificant. The results are robust across different regression specifications and proxies of FDI variables. They convey useful implications for research and public policy in FDI receiving countries.

Influence of Exchange Rate on Foreign Direct Investment Inflows: An Empirical Analysis Based on Co-Integration and Granger Causality Test

Although it is widely recognized that Foreign Direct Investment (FDI) inflows have a dominant effect on economic growth of host countries, the determinants of FDI inflows are still unclear. Especially, about the effect of exchange rate on FDI inflow, the results reached by scholars vary across countries or regions. It is of great practical and theoretical significance to explore the influencing effects of exchange rate on FDI inflow and identify the mechanisms that underlie them in close association with regional economic characters so as to help local government implement targeted government policies to achieve sustainable FDI inflow and sustainable economic growth. For this purpose, the influencing effects and the influencing mechanisms of the exchange rate on FDI inflows are investigated for Zhejiang province, China, over 1985–2019 by employing the co-integration tests, vector error correction models, Granger causality tests, and impulse response tests. Empirical results indicate that there are long-term stable and unidirectional causal relationship between the exchange rate and FDI inflow. Continuous appreciation of RMB against USD discourages FDI inflow. The mechanism which underlies the long-term relationship is the wealth effect, rather than the cost effect or the demand effect. By contrast, in the short run, neither the exchange rate nor the three influencing mechanism has a significant impact on FDI inflow. These results suggest policy recommendations for improving FDI by accumulating human capital and improving infrastructure. These findings are also applicable for other countries or regions with similar economic characters.

Japan as a Source of Legal Ideas: A View from the Mekong Subregion of ASEAN

Much has been written about Japanese law within the context of Japan. Less is known about the application of Japanese legal models outside Japan. A prevailing view among some commentators is that Japanese law scholarship does not offer insights that are useful beyond Japan-based legal studies. Other scholars challenge this perception by invoking Japan’s legal development aid projects in the Mekong subregion of ASEAN—especially in Vietnam, Cambodia and Laos. These projects have been in operation for over twenty years and aim to foster the economic growth of host countries. This article aligns with the view that Japanese law exists beyond, and is influential outside, Japan. It calls for further action by legal specialists to re-examine and re-assess the corresponding influence of Japanese positive law in these countries, both in improving the transparency of those legal systems and enhancing communication among local, comparative and Japanese law experts.

The system dynamic model of the labor migrant policy in economic growth affected by COVID-19

At the end of 2019, the new virus called coronavirus disease (Covid-19) spread widely from China all over the world. In March 2020 the World Health Organization declared new virus outbreak as a global pandemic, and recommended social distancing and quarantine. Most countries in Europe have been quarantined. The social aspect of this issue is complicated by the fact that Europe nowadays hosts 82 million international migrants. If migrant workers leave the host country, it reduces the Covid-19 spread. Nevertheless, if migrant workers do not return, it will worsen the situation with the economic crisis. The subject of the study is the instrumental and mathematical aspects of impact simulation of labor migrants' policy on the economic growth of the host country affected by COVID-19 pandemic. The aim of the work is to develop the system dynamics model for assessing labor migrants' policy impact on the economic growth of the host country during COVID-19 pandemic. It examined through hypotheses of different scenarios of labor migrants policy impact on the host country economic growth in Covid-19 pandemic. The proposed model combines epidemiological and the economic growth models and relies upon real statistical data. The analysis was carried out in four European countries. The results of the study enabled to state that without migrant workers the gross domestic product may fall to 43% in Italy, 45% in Netherlands, 37% in Spain and 200% in Switzerland in 2020.

Foreign Direct Investment and Economic Growth in Africa: New Empirical Approach on the Role of Institutional Development

ABSTRACT According to the predominant conclusion from the recent FDI-growth literature, the conflicting evidence concerning the effect of foreign direct investment on economic growth in host countries might be due to the fact that the gains from FDI are conditional on certain domestic factors. Among these factors is the quality of institutions. The aim of this study is therefore to investigate the role of institutional development in FDI-growth nexus in African countries. Using a panel smooth transition regression model with a sample made up of 27 African countries over the period 1990–2017, the results show that FDI promotes economic growth in countries where the level of institutional development is beyond a certain threshold. In countries that fall below the threshold, FDI has either a negative or null effect on economic growth. Specifically, we find that countries should be above the 65% threshold regarding government stability score, 55% for investment profile, 50% for democratic accountability, 45% for law and order, 35% for corruption, and above the 25% threshold for bureaucracy quality score to benefit from FDI in terms of economic growth.

The role of China's aid and ODI in the economic growth of African countries

Has external capital, such as foreign aid and foreign direct investment (FDI), been able to help the economic growth in host countries? Our paper examines the effects of China's aid and its overseas direct investment (ODI) on economic growth in 47 African countries from 2003 to 2013. We find that China's aid has significant positive effects on African economic growth. However, China's ODI plays no major role in African countries' economic growth. In addition, the relationship between aid and growth varies according to the different categories of aid, and its marginal contribution is nonlinear.

Investigation of The Relationship Between Migration, Unemployment and Growth in the OECD Countries with Panel ARDL Technique

Economic growth is typically accompanied by migration. Both factors are great important in the growth process. This study empirically examines the interaction between migration and economic conditions of the target country. In the period of 1990-2016, the panel data was analyzed by panel ARDL technique by using he annual data set in 19 OECD countries. Short and long term results were obtained. The long-term results show that migration flows contribute to the economic growth of host countries. Short-term results showed that migration flows had a negative impact on growth. On the other hand, as expected, in the long run, while the increases in employ ment increase the GDP per capita, each increase in unemployment rate decreases GDP per capita. It is also possible to say that the migration is affected by the economic conditions of the host countries.Key Words: International Migration, Growth, Unemployment, Panel ARDL, OECDJEL Classification: F22, O47, B22, C33, O50

Nexus between foreign direct investment and economic growth in Bangladesh: an augmented autoregressive distributed lag bounds testing approach

The relationship between foreign direct investment (FDI) inflows and economic growth in host countries is a heavily debated issue. Although some studies have found evidence of the positive impact of FDI on economic growth, others have revealed the opposite result. Studies that examined the causality between FDI and gross domestic product (GDP) also have found evidence of unidirectional causality and, in some cases, a bidirectional causality. This study investigated the causal nexus between FDI and GDP in Bangladesh by employing standard time-series econometric tools, namely, augmented Dickey-Fuller, augmented Dickey-Fuller generalized least square, Kwiatkowski-Phillips-Schmidt-Shin, and Lee-Strazicich unit root tests to check stationarity, augmented autoregressive distributed lag (augmented ARDL) bounds testing approach to check cointegration, and Granger causality to explore the direction of causality. The augmented ARDL model found a long-run relationship between FDI and GDP. In addition, the error correction model and Granger causality results indicated the presence of a unidirectional causality running from GDP to FDI.

Did the 2008 global financial crisis influence the host country corruption and inward foreign direct investments relationship? An empirical examination

We use annual data over the 2002–2016 period with Panel Smooth Transition Regression model to examine how the 2008 global financial crisis affected the relationship between FDI inflows into developed, developing, and transition host countries and host country corruption levels. We also partitioned the data for each type of host into corruption regimes (low, moderate, and high) and examined the results separately for each regime. Our results indicate that the crisis altered the FDI inflows/corruption relationships and generally depend on the development level of the host country and corruption regimes. In addition, our evidence suggests a strong correlation between selected host country macroeconomic variables like financial depth, gross capital formation, and FDI outflows and sample variables. In turn, the crisis also affects these variables. Factor analysis results using all sample variables and separately for donor/aid recipient countries indicate the emergence of a few key factors (host country economic environment, host country international involvement, and host country economic growth potential) that are also affected by the crisis. Our analysis strongly suggests that the FDI/corruption is a complex one and corruption prone host countries must consider improvements to corruption, financial depth and domestic gross capital simultaneously to attract FDI inflows.

An Analysis of The Relation Between Foreign Direct Investment and Sociopolitical Variables in MENA Countries by Panel Regression

Foreign direct investment (FDI) plays the role of an accelerator for the economic growth in host countries. Countries that provide the suitable environment economically and politically get ahead in this race. Over the last five years, the weighted importance of sociopolitical variables in the decision-making process has increased. The countries of the Middle East and North Africa (MENA) region, although they have a potential to develop, are regarded as country groups that have not yet fully achieved this. This article reveals and interprets the relationship between FDI and sociopolitical variables such as political risk, human development index, terrorism risk index, multidimensional poverty index, the rule of law, regulatory quality, and control of corruption, utilizing panel regression analysis. In the analysis of the MENA countries covering the years 2010-2016, it was concluded that all independent variables except the human development index and multidimensional poverty index were statistically significant and effective on FDI.

Dynamic Relationship between Chinese FDI, Agricultural and Economic Growth in West African: An Application of the Pool Mean Group Model

This study is an attempt to test the long run relationship between Chinese foreign direct investment (FDI), agricultural and economic growth in host countries is known to have an important role in economic literature suffering from unemployment problems, food security and lack of technological progress. This paper examines this issue for West Africa by applying Pool Mean Group (PMG) and panel-Granger causality Models over the period of 2003 to 2015. The Pool Mean Group tests suggest cointegration between China FDI, economic growth, domestic investment and land agricultural used The article indicates that Chinese FDI, domestic investment and land agricultural spur economic growth contrary to some studies, which found that China FDI does not cause economic growth. The results also show that there is no significant Panel-VECM Granger causality from China FDI to economic growth, from economic growth to Chinese FDI, from agricultural to economic growth and from economic growth to agricultural. This implies that the increment in Chinese FDI inflows would definitely lead to increasing the economic growth, domestic investment and agricultural land in West Africa.

The Impact of FDI on the Economic Growth of Sri Lanka: An ARDL Approach to Co-integration

The impact of foreign direct investment(FDI) on host country economic growth is a debatable issue in the recent economic literature. The purpose of this study is to examine this issue for a country which practiced comparatively more liberal economic policies within the South Asian region over four decades. The ARDL approach to cointegration is applied to identify long-run relationship and short-run dynamics between selected variables for the period of 1978 to 2015 for Sri Lanka. The empirical result confirms the long run relationship between the variables. FDI is positively correlated with economic growth in the short run and long run, but it is not a significant factor for economic growth in Sri Lanka. Sri Lanka will have to undertake policy reforms related to FDI in order to attract more greenfield investments to boost economic growth creating new job opportunities and expanding exports in the manufacturing sector. These findings would be an example for other small open economies with similar economic characteristics.

THE ROLE OF GOVERNANCE ON INWARD FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

Developing countries generally have poor governance infrastructure negatively affecting investment climate. Since economic growth of host countries is another important factor affecting the foreign direct investment decisions, the aim of the paper is to analyze the effect of governance infrastructure and economic growth with other control variables on FDI inflows in developing countries and to discuss policy implications to increase their FDI inflows. Since governance, FDI and growth are three concepts that interact with each other according to the theoretical and empirical literature, System GMM methodology is used to deal with endogeneity problem. It is found that improvements in governance and higher GDP growth rate attract more FDI inflows in developing countries.