Effects Of FDI Research Articles

Adolescents’ fluid intelligence and divergent thinking: the mediating effect of field dependent independent cognitive style

ABSTRACT The current study provided empirical evidence on the mediating effect of field dependent independent cognitive style (FDI) in the association between fluid intelligence (Gf) and divergent thinking (DT) during adolescence. The experiment was carried out with 80 Italian adolescents (meanage = 16.40; SDage = 1.09; rangeage 15–18), who performed Raven’s Standard Progressive Matrices, the Leuven Embedded Figure Test, and the Alternative Uses Task. Results revealed that Gf affected DT through the indirect effect of FDI, suggesting that adolescents’ DT represents a blend of different agents, such as information processing, reasoning, and cognitive strategies, which display different roles during divergent idea generation. Specifically, whereas Gf is essential for evaluating the degree of usability and functionality of new ideas, FDI is necessary for employing and managing Gf skills during the idea generation. Theoretical implications, limitations, and future research directions were discussed.

The effects of different forms of FDI on the carbon emissions of multinational enterprises: A complex network approach

The carbon emissions of multinational enterprises (MNEs) through FDI are causing a shift in the emissions burden and threatening mitigation targets. The purpose of this paper is to investigate the effects of the FDI stock, greenfield FDI, and M&As on carbon emissions of MNEs from 2005 to 2016 via quadratic assignment procedure (QAP) network analysis. Through QAP network analysis, we study the FDI-carbon emissions linkage considering the interactions among agents. The results show that the “high-income region to low-income region” mode is gradually becoming the driving force in the global carbon flow, producing lots of carbon emissions with a lower investment. The investments in this mode are dirtier. Second, financial institutions have become the key emitters of global carbon emissions through FDI. This investment model makes global carbon transfer indirect and concealed. Third, the significance of the impacts of the three forms of FDI on the carbon emissions of MNEs is positive, which confirms the pollution haven effect. The greatest contributor is the FDI stock, which comes from historical investments in high-income regions. Greenfield FDI is more influential than M&As in both high- and low-income regions. This paper is a valuable reference for understanding the environmental effects of FDI.

Effects of FDI, External Trade, and Human Capital of the ICT Industry on Sustainable Development in Taiwan

Understanding how international trade, FDI and human capital (FDI-HC and ET-HC) in the ICT industry affect Taiwan’s stable economic growth between 2001 and 2020 is the main objective of this study. The empirical analysis method used in this study is mainly divided into two steps: First, it uses variables with reliability and authenticity as keywords for primary, data mining, and semantic network analysis (SNA). Second, it investigates the long- and short-term interactions between the variables using the vector error correction model (VECM). The results of data mining and SNA using FDI and ET as keywords reveal that terms connected to HC have high levels of centrality, clustering, and frequency. This finding implies that the variables FDI-HC and ET-HC are reliable and can be utilized as interaction variables. Moreover, FDI–HC and ET–HC exert positive short- and long-term influences on GDP, and ET–HC exerts strong mid- to long-term impacts on GDP, FDI–HC, and ET.

The Effect of FDI on Environmental Degradation in Romania: Testing the Pollution Haven Hypothesis

The study examines the relationship between CO2 emissions, trade openness, GDP growth and foreign direct investment (FDI) in Romania. The research aims to provide empirical evidence for either the pollution haven hypothesis (PHH) or the pollution halo effect (PHE). The pollution haven hypothesis suggests that countries with weaker environmental regulations and lower environmental quality are more attractive to FDI, while the pollution halo effect posits that countries with high levels of environmental protection and quality can generate positive spillover effects for FDI. The findings suggest a significant relationship between CO2 emissions, GDP growth and FDI inflows, with GDP growth having a greater effect on FDI than CO2 emissions. GDP growth has a causal effect on CO2 emissions, while CO2 emissions have a causal effect on FDI. These findings have important policy implications, as they highlight the interplay between economic growth, environmental degradation, and foreign investment. Policies aimed at reducing emissions must be comprehensive and coordinated in order to achieve significant emissions reductions and strike a balance between economic growth and environmental protection.

The spillover effects of outward FDI on environmental sustainability in developing countries: exploring the channels of home country institutions and human capital

The spillover effects of outward FDI on environmental sustainability in developing countries: exploring the channels of home country institutions and human capital

Вплив ПІІ на структурні зміни економіки у контексті перспектив повоєнного відновлення України

The recovery of the national economy, which is undergoing great destruction as a result of full-scale Russian aggression in Ukraine, will require attracting not only domestic but also foreign investments. The post-war experience of various countries shows that the inflow of foreign capital contributed to meeting the needs for investment resources for the reconstruction of the economy and its structural modernization. The recent history of the rapid rise of newly industrialized countries also demonstrates that foreign investments enable the transformation of the structure of the host economy, and its progress towards higher levels of industrial development. The purpose of this study is to conduct an analysis of the accumulation and sectoral distribution of FDI in the Ukrainian economy, to assess the effects of FDI to change the structure and dynamics of economic growth, and to identify approaches to attracting foreign investment in the context of prospects for post-war recovery and economic restructuring. The article examines the accumulation of FDI in the Ukrainian economy in historical retrospect, analyzes the distribution of their reserves among the sectors and subsectors, as well as their geographical origin. The author assesses the depth of penetration of the FDI into the economy in general and into the technological sectors within the processing industry, in particular, and reveals various contradictory effects created by foreign investments for the development of the national economy, technological progress, and economic security. Using regression modeling, the article investigates the FDI as a factor capable of contributing to the transformation of Ukraine’s economy, and changing the structural distribution of added value and employment between sectors. The simulation results confirm that the accumulation of FDI really affects the dynamics of GVA production and employment in economic sectors, that is, it causes structural shifts in the economy. At the same time, sectoral assessments reveal the mixed effectiveness of this factor in terms of the strength and direction of changes in the structure of the economy.

Asymmetric impact of technological innovation, foreign direct investment and agricultural production on environmental degradation: evidence from Pakistan.

The present study analyzes the asymmetric effects of technical innovation, foreign direct investment, and agriculture productivity on Pakistan's environmental degradation from 1990 to 2020. A non-linear autoregressive model (NARDL) has been used for the analysis. The asymmetric effects have been computed for both the long and short run. The empirical results show that there is equilibrium long-run relationship among the variables. Moreover, it is found that the effect of FDI on CO2 emission is positive regardless of whether there are positive or negative shocks to FDI in the long run. The short-run results are similar except for the positive shocks to FDIat lag one, which reduces environmental degradation in Pakistan. However, in the long run, population growth and positive (negative) shocks to technical innovation have a negative and significant impact on CO2, whereas agriculture productivity is the main source of environmental degradation in Pakistan. The asymmetric tests show that FDI and agriculture productivity have strong asymmetric effects on the CO2 emissions in the long run, whereas there is weak evidence of, in the short and long run, asymmetric effects of technical innovations in Pakistan. These results are statistically significant, valid, and stable as per most of the diagnostic tests conducted and reported in the study.

Effects of FDI and Financial Development on Renewable Energy Consumption in Brazil, Chile, Colombia, and Mexico

Effects of FDI and Financial Development on Renewable Energy Consumption in Brazil, Chile, Colombia, and Mexico

CLUSTER POLICY AND ITS IMPACT ON FDI ATTRACTION MODELS AND BETTER COOPERATION BETWEEN MNEs AND SMEs

The concept of FDI has been analyzed by several theorists and many of them see FDI as an engine of growth. FDI affects economic growth directly and indirectly. It is well known that FDI has a positive impact on the domestic economy through the transfer of technology and skills, development of local suppliers in terms of providing technical assistance, training for employees, transfer of knowledge, etc. In this way, FDI affects the improvement of productivity and competitiveness of the entire economy. Multinational enterprises and their foreign affiliates recently generate one third of the global GDP, as well as two thirds of international trade. They also account for half of global exports. Precisely because of their economic importance, many governments offer subsidies and tax breaks to attract multinational enterprises, and consequently FDI. According to OECD (2005), linking MNEs and SMEs is important in the context of investment for development. The so-called "spillover" of know-how and technology from foreign investors to the local business sector is one of the biggest benefits of FDI for development. In most countries, SMEs are considered as the majority of the domestic business sector, therefore the process of overcoming the barriers to the connection between large and small enterprises is of great importance for the overall development. But the benefits of cooperation between MNEs and SMEs do not come automatically. Consequently, if we analyze specifically only one segment of the effects of FDI, such as the introduction of new technologies and innovations, as one of the biggest benefits of the host country from FDI, we come to the conclusion that this transfer is not always the same, but is very more present and effective if it is done in geographically concentrated clusters, in contrast to the cases when it is realized in dispersed companies of the same sector. Companies operating in clusters are characterized by a high degree of specialization and complementarity. This generates dynamic processes of learning, innovation and knowledge transfer. In the clusters, a process of collective learning is realized, which results in innovation and competitiveness even in sectors where high technology is not applied. This paper aims to explore models and ways of attracting FDI as well as creating preconditions for realizing as many benefits and spillovers as possible from the established cooperation between foreign MNEs and local SMEs, such as clusters. The results show that although the clusters in the Republic of North Macedonia are formally functioning, they are far from the desired condition to be in a situation to provide essential assistance in the direction of increasing the positive effects of the cooperation of SMEs and MNEs. However, the clusters should continue to be supported by the relevant competent institutions in order for the desired effects to be measurable, concrete and significant for the local economy.

FDI in services and firm innovation

This study explores how FDI in services impacts manufacturing firms’ innovation, using China's FDI access relaxation in services as an exogenous shock. Our findings indicate that FDI in services significantly reduces firms’ innovation. Firms with greater openness to FDI in services have significantly lower numbers of patent applications and citations. FDI in services leads to an increase in foreign input imports but a decrease in innovation investment, with more pronounced effects on firms relying more on foreign inputs. We suggest that FDI in services encourages the use of foreign inputs by reducing their relative costs, thereby crowding out innovation. Human capital, Internet, and subsidy can mitigate the negative effects of FDI in services on innovation.

"Application of ARDL modelling in global structural shocks and their dynamic impact on FDI "

In general, sustainable economic growth is highly dependent on technological progress, managerial knowledge, and money supply in the economy. Globally, the COVID-19 pandemic has caused structural shocks to economic systems by increasing high economic uncertainty. For this reason, policymakers are exploring alternative measures to stimulate economic growth. And among these alternative measures we also find foreign direct investment, which represents an instrument widely used worldwide. There is a trend among foreign investors that they increasingly focus on the quality of institutions, especially on FDI policies in domestic countries. For this reason, governments of developing countries are increasingly adopting soft policies to attract FDI. Generally, the policies provide substantial taxation provisions. Thus, by stimulating foreign direct investment in global economic operations, short- and long-term growth is achieved. The beneficial effects of FDI are given by their unprecedented impact on achieving sustainability worldwide. The motivation of this study is to scale the effects of environmental quality and good governance on FDI inflows in European Union member countries for the period 2002-2021. We used the estimation of autoregressive distributed lag and error correction models to investigate the association and elasticity of explanatory variables on FDI inflows in EU member countries. Thus, as independent variables we use CO2 emissions from solid fuel consumption and the sum of exports and imports of goods and services. Environmental degradation comes from the depletion of resources by human activity, and ultimately this leads to increased costs and depletion of capital. As a result, environmental quality is crucial to the health of both people and businesses. In the recent economic booms, international trade needs serious attention to form new policies to invite more foreign investors. And as control variables we introduce Government effectiveness index and Gross capital formation. We introduce these variables because it is believed that weak institutional capacity can have a negative impact on economies. The study results suggest that government efficiency and a less regulated environmentally concerned economy drive capital transfer decisions.

The Impact of Chinese FDI on Zambia's Socio-Economic Development

There has been an increase of Chinese investments in many parts of the globe. According to Bo Li (2016), China’s outward foreign direct investment OFDI stock has grown from $1 Billion in 2004 to more than $30 Billion in 2014. However, there is an ever-growing volume of literature premised on the criticism of the impact of Chinese investment in Africa and other parts of the globe. Many studies have cited China as being after the resources of its host countries without much concern to the effects or benefits to local populations, (James Mayers:2015) and (Reisen and Rielander:2011). This paper made an attempt to explore the impact of Chinese FDI on social economic development focusing on job creation and poverty reduction in Zambia. The study was largely qualitative in nature and adopted a mixture of descriptive and explorative study designs. The study focused on Zambia because of the unique bilateral ties with China which span over decades. Furthermore, many studies done on Chinese FDI usually aggregate all African countries overlooking the differential impact of the source and type of Chinese FDI in Africa which makes it difficult to generalize findings, (Abdoulkadre Ado Zhan Su:2016). While many studies only focus on the economic effects of FDI by stressing on quantitative aspects, this study went further to analyze a mixture of qualitative and quantitative variables within the socio-economic context. This approach was adopted in order to provide a comprehensive analysis and hence a point of departure from other similar studies done on this subject. Less focus was laid on characteristic of FDI which in itself was a delimitation. A number of key conclusions revealed through my findings are that China has made significant investments in different sectors of the economy which have translated into job creation and helped to lift thousands of local people from poverty. However, despite the numerous investments made, jobs created are mostly for unskilled laborers. In addition, although most firms meet the minimum wage requirement, wages still fall below the Basic needs and nutrition basket, (Jesuit Center for Theological Reflections:2022). These are some of the areas of concern which have undermined notable gains. The paper therefore starts by unpacking suppositions surrounding FDI, then makes efforts to disambiguate economic growth from economic development before stressing on the findings and finally drawing conclusion. Keywords: FDI, economic growth, economic development, sustainable development. DOI: 10.7176/JESD/14-10-01 Publication date: May 31 st 2023

THE IMPACT OF FOREIGN DIRECT INVESTMENT ON GDP AND AGRICULTURE IN KOSOVO: AN EMPIRICAL STUDY

This study examines the effect of FDI on economic growth and agriculture in Kosovo in the years 2010-2021. To quantify the effects of the explanatory variables on the explanatory variables, data was generated for the variables collected by the World Bank and the Kosovo Statistical Agency. The results of analysis (OLS robust) show is performed with two models. Two models, OLSR1 and OLSR2, were developed to analyze the impact of independent variables on GDP and agriculture. OLSR1 found agriculture_land and government expenditure positively affect GDP, while OLSR2 found GDP positively affects agriculture_land, while inflation has a negative impact. The negative coefficients for FDI, interest rate, and government expenditure in OLSR2 suggest they negatively impact agriculture_land but are not significant. The results have important implications for policymakers in Kosovo, who aiming to attract more FDI and boost economic development.

How to reconcile the climate change issue with economic growth? Spatial dual mediating effects of carbon emissions and foreign investment

Climate change has steadily gained attention as the global economy has grown more quickly, preventing continued high-quality economic growth. In this context, the eco-innovation concept has recently risen to the top of the list of academic research topics since it is a crucial tool that combines reduced environmental effects with a favourable socioeconomic impact. Nevertheless, the environmental situation is not improving despite the increasing eco-innovation level. From one perspective, instead of concentrating on how eco-innovation lessens carbon emissions, this research explores the indirect effect of carbon emissions on the GDP-eco-innovation nexus. From another perspective, since FDI might lessen harmful pollution, this research analyses the indirect effect of FDI on the economic growth-eco-innovation nexus. Therefore, this paper highlights the relationship between eco-innovation and economic growth (GDP), considering the dual mediating roles of carbon emissions and FDI. First, we examine the effects of GDP on eco-innovation activities in nine MENA countries from 2000 to 2019 using the geographic Durbin model based on spatial panel data. Second, this paper analysed the dual mediating effect of carbon emissions and FDI using the spatial stepwise regression model. The findings of this paper are as follows: (i) GDP positively impacts eco-innovation activities, and (ii) carbon emissions and FDI mediate the GDP-eco-innovation nexus. Therefore, GDP, FDI, and carbon emissions are significant drivers of eco-innovation. This research represents an essential step towards a better understanding of the need to support the transition to sustainability.

The moderating role of ICT on the relationship between foreign direct investment and the quality of environment in selected African countries

This empirical study examines the role of information and communication technology (ICT) in the relationship between FDI and environmental quality for six leading African economies from 1970 to 2020. The second-generation tests are used to determine the stationarity level of the variables. Furthermore, the Westerlund panel cointegration test confirms cointegration among the variables. For long-run association, CS-ARDL, which resolved the consequences of heterogeneity and cross-sectional dependency is used. The results of the study reveal that ICT, FDI, economic growth, and financial development degrade environmental quality. The interacting effect of ICT and FDI (ICT*FDI) leads to escalation of CO2 emissions thereby deteriorating the quality of the environment. The study recommends that African countries should promote FDI to support the inflow of green technologies to enhance environmental quality. The implementation of environmentally sustainable technology would help improve the quality of the environment, increase sustainability in the long term and conserve resources for future generation.

Analysis and Research on the Impact of Productive Service Agglomeration on Green Total Factor Productivity of Service Industry Based on the Moderating Effect of FDI

This paper selects the GML index to measure the green total factor productivity of China's service industry, and empirically examines the effects of productive service industry agglomeration, service industry FDI and their interaction terms on green total factor productivity after fully controlling for the important variables affecting green total factor productivity in service industry. At the regional level, there is regional heterogeneity in the moderating effect of service industry FDI on green TFP, and the joint effect of the two significantly promotes green TFP in the eastern region and negatively affects the central region.

Foreign direct investment and employee income share: Firm-level evidence

This paper explores the impact effect of foreign direct investment on the share of employee salary income at the firm-level in China. We find that: 1) FDI raises the share of employee salary income on average; 2) FDI raises the number of patents and total factor productivity, reflecting the promotion of technological advancement, which in turn raises the share of employee compensation income; and 3) macroeconomic downward pressure and industry market competition reinforces the effect of FDI on the increase of the share of employee compensation income. Our finding provide important policy implications for further enhancing the openness and internationalization.

The Effects of Market Concentration, Trade, and FDI on Total Factor Productivity: Evidence from Indonesian Manufacturing Sector

The Effects of Market Concentration, Trade, and FDI on Total Factor Productivity: Evidence from Indonesian Manufacturing Sector

How does two-way FDI affect China’s green technology innovation?

ABSTRACT As China enters a new stage of opening up, the two-way FDI will affect the efficiency of technological innovation, which is significant to alleviate the current dilemma of resource exhaustion. In this paper, we analyze the effects of two-way FDI and other variables on green technology innovation based on the Granger test, coupling coordination model and fixed effect model, and further study the nonlinear effects with the financial development level as the threshold variable. The obtained results indicated that: (1) There is an interactive relationship between IFDI and OFDI, and two-way FDI can produce a greater positive synergy effect, with regional heterogeneity. (2) Urbanization level, property protection and government support have a positive effect on the promotion of green technology innovation. (3) The advanced industrial structure plays a suppressive role. (4) The impact of two-way FDI on China’s green technology innovation level has a double threshold effect.

방위산업 수출에 있어 네트워크 효과에 관한 연구

The main purpose of this study is to contribute to the investigation of explanatory variables and networks effect on exports in the defense industry. In particular, it attempts to examine the role of two channels of economic and non-economic networks in the gravity equation of exports; economic networks are trade, FDI and FTA, non-economic networks are military expenditure and military alliance. The basic and the augmented gravity models are estimated with an annual cross-section data set of year 2020 for 44 countries.
 The estimation results demonstrate that military expenditures explain the bilateral export in the defense industry better than GDP does as an economic scale variable in the equation. Also the evidence of the effect of FDI is statistically significant in the estimation, whereas no evidence for effects of trade and FTA have been found. In addition, there is no further evidence for the role of military alliance between trade partners for exports in defense industry.
 The results imply that military expenditure of import country and FDI relation has a strong relationship with export in the defense industry. Thus, it also emphasizes the policy implication for taking into account of the linkage between export and FDI activity in promoting export of defense industry.