Investment Matters Research Articles

Achieving sustainable development in Sub‐Saharan Africa: Do human capital and foreign direct investment matter?

AbstractOver the past few decades, there has been a noticeable development of interest among scholars and policymakers worldwide regarding the prominent drivers of sustainable development. The role of human capital and foreign direct investment (FDI) in fostering sustainable development, however, has been largely neglected by policymakers and scholars, despite recent emphasis on FDI amidst current economic performance worldwide, particularly in developing countries. This study empirically investigates the effect of human capital and FDI on sustainable development in sub‐Saharan Africa (SSA) spanning 1991–2021. The empirical analysis was implemented by deploying different techniques, such as feasible generalized least squares, panel corrected standard errors, and Lewbel two‐stage least square techniques, with the panel quantile regression approach as a robustness check. The empirical outcomes show that improvement in human capital via educational attainment fosters economic expansion, employment opportunities, and poverty reduction, whereas an increase in health human capital undermines sustainable development in SSA. The findings also reveal that increasing FDI flows to priority sectors in the region are critical for enhancing human capital, thus stimulating economic performance, job opportunities, and poverty alleviation in SSA. This study puts forward important policy implications for achieving sustainable development.

Reverse technological spillovers from outward FDI on home countries’ total factor productivity: Does the mode of investment matter?

We examine the effect of outward foreign direct investment (OFDI) on total factor productivity (TFP) of home (source of FDI) countries in a global sample of 85 economies, distinguishing between outward greenfield FDI (OGFDI) and outward cross-border merger and acquisition (M&A) purchases. The goal of the study is to test for reverse technological spillovers to the FDI source country. The hypothesis is that OGFDI and M&As have different capabilities of carrying out reverse technological spillovers, which would affect the TFP of home countries differently. We apply a two-step system generalized method of moments (GMM) to deal with possible endogeneity and find the following results. First, total OFDI has no effect on the home country's TFP. Second, disentangling OFDI by mode of investment reveals both positive and negative reverse spillovers from FDI to TFP. While OGFDI produces negative reverse spillovers on the TFP of an MNE's home country due to displacement of production and reduced competition at home, M&A purchases produce positive reverse spillovers on the TFP of an MNE's home country due to their potential to acquire high-value knowledge assets. Third, home countries' human capital development positively moderates the impact of OGFDI and M&A purchases on TFP, while trade openness positively moderates only the M&A impact on TFP. Our findings imply that policies that seek to promote OFDI can be beneficial once countries have reached a certain degree of human capital development and participation in international trade.

Do SWF investments matter for bond ratings? The role of corporate governance

AbstractWe investigate the impact of sovereign wealth funds (SWFs) equity ownership on bonds’ credit ratings of their target firms. Using a sample of 2045 bonds issued by 324 SWF target firms from 16 countries over the period 1996–2020, we find evidence linking SWF investments to lower likelihood of bond rating upgrades. Consistent with value‐reducing political agenda hypothesis, our results suggest that credit rating agencies perceive SWFs as a structure that could affect the quality of corporate governance and harm bondholder interests by leaving them vulnerable to losses. Our results also show that credit rating could be improved: (i) with SWF transparency and experience; (ii) when SWFs take a more passive investment stance; and (iii) within the financial crisis period. Finally, and interestingly, using generalized structural equation modelling, we provide evidence supporting the mediating role of target firm's corporate governance quality in the relationship between SWF investments and bond ratings. Our findings are robust to controls for the endogeneity and heteroscedasticity issues and to alternative sample compositions and regression frameworks.

A scoping review on the obstacles faced by beta thalassemia major patients in Pakistan- Matter of policy investment

<p>Beta-thalassemia major (β-TM) is a genetic disorder, prevalent especially in the Mediterranean region, Southeast Asia, and the Indian subcontinent. With improvements in management over the years, β-TM has transitioned from a fatal childhood disease to a chronic condition. However, in Pakistan, there is still a lack of a comprehensive national policy and strategic plan, which has resulted in a growing number of β-TM patients, placing a substantial burden on individuals and the national healthcare system. This scoping review is aimed to understand obstacles faced by β-TM patients in Pakistan. For this review, 26 unique articles were identified by using the PRISMA flow guidelines. PubMed and Google Scholar were used with the MESH term Beta-Thalassemia Major AND Pakistan, and the duration was set between 2012–2022. Then, the reviewers created a spreadsheet using Microsoft Excel to add in the data from the studies selected. Inductive and deductive approaches were used for thematic analysis. Additionally, we critically analyzed the current landscape of β-TM in Pakistan. The main challenges in β-TM care in Pakistan are suboptimal transfusion services and a poor complication management. Due to the need of chronic blood transfusions, transfusion-transmitted infection (TTI) incidence within this patient population is high. These largely include hepatitis C, hepatitis B, and the Human immunodeficiency virus (HIV). TTIs impact the quality of life of these patients and their overall survival. Furthermore, psychosocial morbidities are also prevalent in β-TM patients, with increased levels of hostility, anxiety, and depressive symptoms, thus emphasizing the critical need for sustained psychological support. Access to quality treatments is constrained, with notable disparities between public and private sector hospitals. Additionally, the financial burden on β-TM patients is considerable, which contributes to economic strain and more hardships on the already suffering families. The review concludes that the absence of a unified national policy exacerbates these challenges, which results in an escalating burden of β-TM nationwide. To address these issues, essential recommendations include the following: the implementation of a standardized protocol for β-TM care, the enhancement of access to quality care, the provision of iron chelation therapy, and safeguarding safe blood transfusion practices. Prevention programs, along with increased public awareness and education about β-TM and carrier screening, are pivotal. Collaborative efforts with international partners and drawing insights from successful strategies in countries with similar β-TM burdens can aid in mitigating the overall impact of β-TM in Pakistan and improving the quality of life of the affected individuals.</p>

Essence of contracts concluded for implementing corporate investment

The article is focused on clarifying the essence of contracts in the field of corporate investment. Achieving the specified purpose is realized through the analysis of the relevant norms of the current legislation of Ukraine, court case-law and provisions of the legal doctrine, which is the objective of this article.
 It has been emphasized that investment contracts cover various types of civil contracts. It has been determined by the subject matter and objectives of investment (joint operation agreements, capital construction contracts, credit granting agreements, purchase and sale agreements, fiduciary management agreements).
 The contract is the main form of investing in the field of corporate legal relations. The author has substantiated the specific features of such a contract, which are: the special sphere of its application; special contracting parties.
 The sphere of application of the contracts studied in the article is corporate legal relations, that is, relations connected to the exercise of corporate rights to participate in the management of a business entity. The parties to the contract in the field of corporate investment are the subjects of investment operation, which primarily include: an investor, i.e., the subject of investment operation that makes a decision to invest own, loaned and borrowed property and intellectual values into investment objects. The other party to the contract can be, in particular, a corporate fund, assets management company as recipients of investments.
 Such contracts are not united by a common subject matter, which is determined by a specific type of investment contract (asset management actions, a share in the authorized (joint) capital of a business entity, etc.). Therefore, the author has emphasized the impracticality of uniting contracts in the field of corporate investment into a separate group of civil contracts. Contracts concluded for the purpose of implementing corporate investment are consensual, commutative and bilateral.

Examining the impact of farm management practices on wheat production: Does agricultural investment matter?

Over the years, the allocation of public funds toward agriculture has consistently played a pivotal role in facilitating the modernization and commercialization of the agricultural industry. Similarly, the integration of technological breakthroughs plays a pivotal role in guaranteeing the sustainability of food production, not solely for the present populace but also for subsequent generations. The present study examines the impact of public investment in agriculture and farm management practices, specifically focusing on cultivated area, fertilizer use, pesticide application, total agricultural machinery, and rural labour force on wheat production in nine provinces of China. The study encompasses the period from 1995 to 2020. This study employs advanced econometric techniques, such as second-generation unit root procedures (CADF and CIPS) and the Westerlund cointegration method, to investigate the stationarity properties and cointegration of the variables. The findings derived from the AMG and CCEMG methods indicate that public investment plays a statistically significant influence on wheat production. In the context of production-related variables, long-term wheat production is statistically and substantially influenced by the total area under cultivation, fertilizer use, and pesticide application. Besides these results, the Dumitrescu and Hurlin causality test reveals a unidirectional causality from agricultural machinery power consumption to wheat production. Furthermore, bidirectional causality exists between public investment, cultivated area, fertilizer use, labour, and wheat production. These results provide vital implications and valuable insights for policymakers in China, which may furnish novel policymaking options for sustainable food production through strategic investments in research and development, irrigation systems, and technological advancements.

Returns behavior of ESG ETFs in the COVID‐19 market crash: Are green funds more resilient?

AbstractThis study explores the importance of environmental, social, and governance (ESG) performance in explaining the returns and volatility of returns of exchange‐traded funds (ETFs) during the market crash induced by the COVID‐19 pandemic. The study uses an unbalanced panel of monthly data during the period 2005–2021 for a diversified sample of 160 iShares Morgan Stanley Capital International conventional and ESG/socially responsible investment (SRI) equity funds. To obtain robust results, a variety of analyses are conducted, including multiple panel regressions based on one‐way clustering, standard error estimates obtained from different covariance matrix estimators that are heteroskedasticity and autocorrelation consistent, simultaneous quantile and inter‐quantile regressions, weighted least square regressions with alternative weights for the regression coefficients, and tests of coefficient equality with bootstrapped standard error of difference in subsample regressions. All the sensitivity analyses give similar results, confirming their validity. The results provide strong evidence for the resilience of sustainable funds during the crash, with ETF returns showing persistence during the market downturn. This study suggests that ESG/SRI investments may help ETFs to outperform their counterparts, indicates that sustainability investments matter in times of crisis, and implies the adoption of strategies that promote sustainable investment development.

America's Parenting Economy: How the Ideal of Parental Investment Scaffolds Family‐Hostile Policy

The American parenting economy is built around the notion that raising children is a matter of private parental investment. This essay outlines briefly the features of what is best characterized as, not family‐friendly, but rather family‐hostile policy in the United States, before it proposes two reasons for why the ideal of parental investment holds its grip. The first is the historical political entanglement of neoliberalism with neoconservatism that continues to entrench the focus on traditional family values. The second is the more recent cultural backdrop of building knowledge infrastructure around “the economic way of looking at parents” to repurpose economist Gary Becker's Nobel Laureate lecture title, which has permeated public discourse and reframed “childrearing” as “parental investment.” Therefore, the possibility of policy change is not simply a matter of political struggle. A potent obstacle to family‐friendly policy is cultural. Parents and nonparents will not demand, nor will politicians embrace, radical institutional transformation of the American family policy if we do not shift our thinking. We need less economic reasoning and more sociological imagination, recognizing that parenting, no matter how intimate and personal it seems, is inextricably and thoroughly bound up with social structures and culture. And that raising children—all children in the manner they deserve—is not a matter of private investment but a common responsibility.

The Green Effect: Exploring the Impact of Innovation and Foreign Direct Investment on Environmental Quality in Malaysia

Do innovation and foreign direct investment (FDI) matter in greening the eco-system, and why not? They can lead to new technologies and knowledge, better efficient renewable energy, and reduced energy consumption; in turn this presumably reduces carbon emissions. In this study, we capture the short-and long-term impact of innovation and FDI, among other macro-variables, on the environmental quality in Malaysia using time series data over the period 1990-2020. Our empirical models find that both innovation and FDI have significant and positive impact on environmental quality in Malaysia, although it is only significant in the short-run for the first one, while significant in the long-run for the latter ones. The disappointing findings from our study is that both economic growth and urbanization show negative impact on environmental quality as CO2 tends to increase with higher levels of GDP and urbanization. An important policy recommendation that we can draw from this paper is that Malaysian policy-makers should, and foremost, focus on designing growth and urbanization policies, regulations and procedures that are environmentally induced to achieve decoupling goal in its development path. We believe that attracting more focused FDI that supports clean and green economy, better innovations and policies to replace traditional energy with clean and renewable ones, could achieve decoupling goal that leads to a reduction in CO2 emissions and improve environmental quality while keep growing in the world economy, including Malaysia.

The effect of foreign direct investment on capital accumulation in developing countries

ABSTRACT The purpose of this study is to examine whether foreign direct investments are a blessing or a curse for capital accumulation in developing countries. Data were collected for 16 developing countries over the period 2005–2018. An Arellano-Bover/Blundell-Bond dynamic panel estimation method was adopted to analyze the physical capital accumulation effect of foreign direct investments. Our analysis indicates that for every percentage increase in foreign direct investment inflows to developing countries, physical capital increases by 2.31 percent. In addition, a random-effect panel estimation was implemented to analyze the effect of foreign direct investments on human capital. For a one-percent increase in foreign direct investments, human capital increases by 2.38 percent. The results of our regressions show that not only the volume but also the type of foreign direct investment matters for capital formation in developing countries. Specifically, foreign direct investments in the secondary sector have a statistically significant positive effect on both physical and human capital. By contrast, foreign direct investments in the primary and tertiary sectors have a negligible effect. Our analysis suggests that developing countries would benefit from investing more resources in education and opening up their economies to attract foreign direct investments, particularly in the manufacturing sector.

Economic Impacts of Investment Facilitation

After the successful adoption of the Trade Facilitation Agreement (TFA) in 2014, investment facilitation is gaining importance as the next policy priority for a plurilateral agreement under the World Trade Organization (WTO). In fact, more than 110 WTO Members aim to conclude the negotiations on the Investment Facilitation for Development (IFD) Agreement by mid-2023 after only three years of formal negotiations. Investment facilitation refers to actions taken by governments designed to attract foreign investment and maximize the effectiveness and efficiency of its administration through all stages of the investment cycle. The IFD agreement focuses on allowing investment to flow efficiently for the greatest benefit, particularly to developing and least developed member countries, with the aim of fostering sustainable development. The flow of efficiency is improved through transparency, predictability, and efficient frameworks with streamlined procedures. In addition, the agreement aims at improving intra-governmental coordination and international cooperation on investment matters. To provide policymakers with essential information for ongoing negotiations and to fill an existing research gap on investment facilitation, we examine the economic impacts of a potential IFD agreement. Generally, quantifying such impacts is predicated on an assessment of current frictions that limit investment on an international basis and the mechanism by which policy impacts these frictions.

Toward fostering environmental innovation in OECD countries: Do fiscal decentralization, carbon pricing, and renewable energy investments matter?

Environmental innovation is an integral part of sustainable development goal (SDG) 9. It also provides the foundation for green energy production, and thus, indirectly supports the accomplishment of SDG 7. Notably, the energy transition from fossil fuel to renewables is critical for achieving sustainable development and a cleaner environment. Therefore, this study explores the major driving forces of environmental innovation in 29 OECD countries from 1993 to 2019 by incorporating environmental taxation, carbon pricing policy, budget for renewable energy development and demonstration, regional authority, financial development, and globalization. The recently proposed Quantile via Movements methodology is employed to address the spiral dependence of explanatory variables and obtain results at different quantiles. The findings of Quantile via movements reveal that enhancing environmental taxation and strengthening carbon pricing policies encourage environmental innovation. Moreover, these countries should decentralize policymaking and delegate authority to regions. Alongside this, policymaking for encouraging the private sector budgets for renewable energy development and demonstration is necessary. The stringent policy regulations at the regional level can enhance the innovation of domestic industries concerning the development, adoption, and commercial competitiveness of environment-friendly technologies. Furthermore, the financial sector’s development enhances environmental innovation, while globalization needs to be properly regulated.

Does domestic investment matter? A multivariate time series analysis of the energy-CO2 emission-growth nexus in Ghana.

The economic cost of greenhouse gas (GHG) emissions to African economies have increased. Therefore, GHG emissions and their concomitant effect on the environment are fast becoming costly for emerging economies like Ghana. Hence, the justification for the growing literature on the subject. This study employed the Autoregressive Distributive Lag (ARDL) bounds test and Granger causality techniques with data from 1983 to 2014. The study examines the dynamic relationship between income growth, power consumption, and carbon dioxide (CO2) emissions in Ghana, capturing the role of domestic investment and foreign direct investment (FDI) in the nexus. All variables were found to be cointegrated in the long run based on the bounds test. The Granger causality test indicates a unidirectional causality from energy consumption to CO2 emissions and economic growth. Furthermore, a unidirectional causality from CO2 to economic growth was found in Ghana. Results from the error correction model and the bounds tests indicate that, while energy consumption increases carbon emissions by more than 44%, the lagged values of domestic investment were found to reduce CO2 emissions by more than 41% in both the short run and the long run. Due to the significant effect of domestic investments on the reduction of CO2 emissions, the study recommends policymakers toadopt policies that may increase domestic capital in place of FDI, which has been proven to exacerbate environmental degradation in host countries.

The economics of public transport electrification: Does infrastructure investment matter?

The economics of public transport electrification: Does infrastructure investment matter?

Studying green financing with economic development in BRI countries perspective: does public-private investment matter?

The study aims to test and inquire about the nexus between green financing and economic development in the belt-and-road initiative (BRI) member countries with the role of public-private investments. The study used the generalized method of moments (GMM) assessment approach from 1990Q1 to 2018Q4 to evaluate research topicality. The study's findings have uncovered some hidden insights and presented new insights. In line with this, the study's findings highlighted that an accurate role of green financing is significant in economic development in BRI economies throughout the research period. The results demonstrate that the GMM method of investigation has distinct validity in establishing the overall significance of results about the role of public-private investments in BRI nations. However, the study results about public-private investments showed a varying impact on nations with high GDP per capita. Moreover, the findings from this research indicate that the development of renewable energy sources is also widely aided by applying environmental regulations. At the same time, factors including population size, technological innovation, industrial structure, and foreign direct investment (FDI) significantly control the relationship between green financing, public-private investments, and economic development. On these findings, the study also recommended practical directions for stakeholders.

Firm‐level energy and carbon performance: Does sustainable investment matter?

AbstractPollution reduction is one of the important challenges confronting contemporary business and society. Firms are largely responsible for undertaking sustainable business practices and initiatives as they are major contributors to global pollution. This study empirically examines how sustainable investment influences firm energy and carbon performance. Using a sample of 23,501 firm‐year observations from 2440 unique firms over the period of 2002 to 2018 in G‐6 countries (Canada, France, Germany, Japan, the United Kingdom, and the United States), we demonstrate that sustainable investment leads to better energy and carbon performance without compromising financial return. Our findings are robust to alternative variables, sub‐samples, and different estimation techniques. This study contributes to the global discussion on sustainability and a low‐carbon economy.

Does foreign direct investment matter for environmental innovation in African economies?

This study investigates the role of foreign direct investment (FDI) in environmental innovation in Africa during 1990–2019. It utilizes the endogenous growth theory to specify an innovation production function, estimated using the seemingly unrelated regression (SURE) method. The study employs four indicators of environmental innovation and also controls for the influence of resource abundance. Key findings from the study show evidence that FDI inflow enhances environmental innovation practices by improving resource efficiency outcomes. In particular, FDI is found to reduce greenhouse gas emission intensity of output and carbon intensity of energy. Further, the effect of FDI on resource utilization and energy productivity is insignificant. Estimates confirm the learning and imitation, and demonstration effects of FDI on resource utilization, though the formal effect is detrimental. The labour market effect is revealed to promote resource efficiency, while resource abundance plays negligible role in environmental innovation in all models. Policy implications are derived.

Does foreign direct investment matter in the asymmetric relationship between economic growth and human capital? Evidence from panel smooth transition regression analysis

Does foreign direct investment matter in the asymmetric relationship between economic growth and human capital? Evidence from panel smooth transition regression analysis

Foreign Direct Investment in Tanzania. An Analysis of its Investment Laws

Foreign direct investment (FDI) as a source of economic development has been embraced by most nations in recent years. Substantial liberalization of existing investment laws has been pursued to promote the seamless influx of FDI into some of these economies. National foreign investment rules, legislation and the legal structure of international investments matter in attracting FDI to a greater number of developed countries, including Tanzania. The control of the activities of FDI in a destination country is seen at three different phases. The national, regional as well as a third stage which requires regulation at the international level. In this article, attention shall be given to the model of Tanzania’s investment code for foreign investment. A study will be made on the various investment laws providing for the admission of FDI in Tanzania, the handling of foreign direct investors and their deposits, movement of deposited foreign funds, and dispute settlement mechanisms. Recommendations shall be made where foreign investment regulations are found to be subpar when contrasted with the rest of the country.

Implementation of Human Rights and the Mandatory Precedents in Foreign Trade, Legal Effectiveness: Mexico Case

We make an analysis of the implementation of human rights and the mandatory precedent in matters of Mexican foreign trade, in an administrative and judicial context in the search for legal effectiveness with constitutional control, highlighting the implementation of human rights contained in treaties commercial, such as access to justice and prompt and expeditious;
 We point out a recent case of human rights and foreign trade, with the implementation in the Mexican legal system, of the Free Trade Agreement Mexico United States Canada, before the Supreme Court of Justice of the Nation, as well as a possible proposal before the provisions of its Article 14.D.5, regarding the right of access to prompt and expeditious justice in investment matters, and avoiding the resolution of controversies before international arbitration panels that have been questioned.