Ratio Of Foreign Direct Investment Research Articles

The Effect of Foreign Direct Investment and Economic Growth on Health: An Empirical Investigation for Türkiye

This study aims to investigate the effect of foreign direct investment (FDI) on health for the period of 1975-2018 in Türkiye by using a health production function approach. Life expectancy at birth which is the dependent variable in the study is used as a proxy for the average health status of Turkish citizens. FDI is defined as the ratio of foreign direct investment to GDP. In order to provide optimal estimates of cointegrating relationship, the Fully Modified OLS (FMOLS) developed by Phillips & Hansen (1990) is preferred as the main estimation method, as it allows for endogeneity of explanatory variables. The findings of the study point out that foreign direct investment inflows reduce life expectancy in Türkiye.

The Influence of Economic Openness on Income Inequality Among Provinces in Indonesia

Economic growth is a macro indicator to measure the success of development, so all countries strive to achieve high economic growth to create prosperity for the society, especially for developing countries. At the beginning of economic growth, income inequality will increase, but over time, income inequality will decrease. This research was conducted to analyze the influence of economic growth rate, non-oil export ratio, non-oil import ratio, and foreign direct investment ratio on income inequality among provinces in Indonesia. The data used in this study is panel data obtained from the Central Statistics Agency covering 34 provinces in Indonesia from 2018 to 2022. The results of this study indicate that the economic growth rate has a positive but not significant effect on income inequality in Indonesia, the non-oil import ratio has a positive and significant effect on income inequality in Indonesia, the foreign direct investment ratio has a negative but not significant effect on income inequality in Indonesia, while the non-oil export ratio does not have a significant effect on income inequality in Indonesia.

How does terrorism hollow out the sustainable economic growth in Big Ten Countries?

PurposeThe main objective of this research is to investigate if there is a long-term relationship between “terrorism” and sustainable “economic growth” in Big Ten Countries.Design/methodology/approachThe data was tested via Panel ARDL Analysis. The growth rate (GR) is the dependent variable, and the “Global Terror Index (GTI)” is the independent variable as the terror indicator. The ratio of Foreign Direct Investment (FDI) to the Gross Domestic Product (GDP), and the ratio of External Balance (EB) to Gross Domestic Product (GDP) are included in the model as the control variables due to their effect on the growth rate. A Panel ARDL analysis is conducted to examine the existence of long-term co-integration between terror and the economy. The planning of the study, the formation of its theoretical and conceptual framework, and the literature research were carried out in 2 months, and the collection of data, the creation of the methodology and the analysis of the analyzes were carried out in 2 months, the interpretation of the findings and the development of policy recommendations were carried out within a period of 1 month. The entire study was completed in a total of 5 months.FindingsResults showed that “Terror” has a negative impact on “Growth Rate” in the long term while “External Balance” and “Foreign Direct Investment” positively affect the Growth Rate. The coefficients for the short term are not statistically significant.Research limitations/implicationsThe sample is only limited to Big Ten including China, India, Indonesia, South Korea, Argentina, Brazil, Mexico, Turkey, Poland and South Africa. The period for annual data collection covers the years between 2002 and 2019 and due to the unavailability of data.Practical implicationsConsidering the risks and the mutual negative effect that turns into a vicious circle between terrorism and the economy, it is necessary to eliminate the problems that cause terrorism in the mentioned countries, on the one hand, and to develop policies that will improve economic performance on the other.Social implicationsTrustful law enforcement bodies have to be established and supported by all technological means to prevent terror. The conditions causing terror have to be investigated carefully and the problems causing terror or internal conflict have to be solved. International cooperation against terrorism has to be strengthened and partnerships, information, experience sharing have to be supported at the maximum levels.Originality/valueIt is certain that terror might have a negative influence on the performance of economies. But the limited number of studies within this vein and the small size of their sample groups mostly including single-country case studies require conducting a study by using a larger sample group of countries. Big Ten here represents at least half of the population of the world and different regions of the Globe.

Does The Foreign Direct Investment Affect Economic Growth in Jordan in Light of Commercial Openness

Purpose: This paper aims to examine the effect of foreign direct investment on economic growth in Jordan in light of the trade openness, during the period from 1999 to 2019. Theoretical Framework: This paper discusses how Jordan, as a developing country, has worked over the years to attract foreign investment by creating an environment of incentives, benefits, and legislation that encourages such investments; taking advantage of low local labor wages, high administrative costs, and great commercial openness. Design/methodology/approach: To achieve the objectives of the study and to construct the statistical model the study used analytical methodology. The following statistical methods were applied; Hausman, Wald Test, F-Test Statistic, Granger, Multicollinearity test, Normality Test, Lagrange Test, Multiplier Test, and Causality Test. Findings: After conducting the analysis tests, the results showed a statistically significant impact of open trade direct investment on economic growth, Moreover, findings showed a positive impact on the degree of economic growth, whenever the degree of trade openness and the flow of foreign investment increase. Research, Practical & Social implications: The independent variables in the study model were measured by the ratio of foreign direct investment from the nominal GDP. The variable (the degree of trade openness) was expressed as the ratio of exports and imports to trade volume. The generalized Method of Moments (GMM) was used in this study. Originality/value: In light of Jordan's extensive commercial openness, This investigation looked at the impact of FDI on economic expansion. The study's findings are in line with theoretical research and other studies that hold that a country's level of economic growth is not adversely affected by significant trade openness because foreign investments are not less effective.

The Role of Research and Development (R&D) on Gross Domestic Products (GDP) (Case Study USA, China, Japan, Germany and the UK)

Research and Development (R&D) is an activity that is considered to be able to increase the country's productivity. R&D activities can produce the latest technological findings supporting the output production process. This research uses the USA, China, Japan, Germany, and the UK as research objects or case studies with 1996-2018 observation years. These five countries are developed countries and are the top five countries with the highest nominal GDP in the world. The main objective of this study is to examine the role of R&D in economic growth as measured by GDP. The dependent variable in this study is economic growth (GDP). In contrast, the independent variables include the ratio of R&D spending to GDP, the number of patents, the number of workers, the ratio of foreign direct investment to GDP, and total factor productivity. By using the standard effect model, this study confirms that all independent variables simultaneously have a positive and significant effect on economic growth in the five countries that are the research object. As for partially, the ratio of R&D expenditure to GDP and the number of patents does not have a positive and significant effect on economic growth.

Does stock market performance have a long effect on economic growth: Evidence from MENA

Financial market has a close relationship with economic growth because increasing economic growth, representing the real gross domestic product (GDP), will enhance the efficiency and develop the stock market. On the other hand, the good performance of the stock market will affect economic growth positively. This paper aims to investigate the impact of stock market performance on the economic growth of a group of MENA countries during the time period 2000–2019. This study uses unbalanced panel data, unit root test, co-integration test, and autoregressive distributed lag (ARDL) model for data analysis (Kao, 1999; Pesaran, Shin, & Smith, 2001). The findings report that the stock market index, banking sector development, the ratio of foreign direct investment (FDI) to the GDP, and the consumer price index, as a proxy of inflation, have a significant positive long-run effect on the economic growth, while the ratio of broad money supply (M2) to the GDP has a significant negative long-run effect on the economic growth. The policymakers and government can based on the results of the study in developing and adopting policies to improve and enhance the efficiency of the stock market and attracting new investors inside and outside the country, which results in increasing the economic growth.

ENSURING COORDINATION OF INTERREGIONAL COOPERATION AND INVESTMENT INNOVATIVE ACTIVITY

The study shows that there is the increase in foreign direct investment by type of economic activity to identify increased investment attractiveness. It is investigated that the trend of efficiency of foreign direct investment in Ukraine in relation to economic development is negative for revealing the level of economic development. Article analyzes the growth of the ratio of foreign direct investment per capita in percent in order to identify the need to increase the international investment attractiveness of Ukraine. Author considers that to increase the level of foreign investment it is necessary to promote the development of interregional cooperation: economic growth, decent working conditions, implement quality education, information-communication technologies, tourism development, foreign trade, agricultural sector, construction development, transport infrastructure, personnel training, development of industry and energy.

ТЕОРЕТИКО-МЕТОДИЧНІ АСПЕКТИ ВИЗНАЧЕННЯ ВПЛИВУ ГЛОБАЛІЗАЦІЙНИХ ПРОЦЕСІВ НА РОЗВИТОК ЕКОНОМІКИ УКРАЇНИ

The paper proposes a scientific approach to determining the impact of globalization processes on the development of Ukraine’s economy based on the analysis of the dynamics and modeling of indicators of the degree of integration of Ukraine’s economy into the system of world economic relations. Globalization is seen as a modern trend in the world economy as a system of interconnected and interdependent economic entities, among which a significant place is occupied by countries. The authors determine the degree of Ukraine's integration into the world economic space by its place in the ratings of globalization and economic openness. Analysis of the dynamics of the degree of integration of Ukraine's economy into the global economy is based on GDP, export and import quotas during 2006 – 2020. Based on the results of the analysis, the authors developed an econometric model for assessing the impact of factors on the globalization index of Ukraine, identified the most significant positive factors, namely the volume of exports of goods and services as a percentage of GDP, GDP, the ratio of foreign direct investment to GDP, the share of innovative exports export of goods and services of the country. The import quota and the corporate income tax rate have been identified as negative factors. Based on the results obtained during the modeling, the authors have developed and proposed a sequence of measures to increase the level of openness of Ukraine's economy in the context of its globalization. Perspective forms of globalization in the context of forming a new perspective of the international community on changing the vector of world economy - from globalization to regionalization and nationalization which have materialized in increasing the volume and diversification of the structure of international trade, intensification of international financial transactions, the emergence of transnational business, a sharp increase in foreign direct investment and intensification of international labor migration.

An Assessment of Global Formula Apportionment

Formula apportionment as a way to attribute taxable profits of multinationals across jurisdictions is receiving increased attention. This paper reviews existing literature and discusses experiences in selective federal states to evaluate the economic properties of formula apportionment relative to the current international tax regime that is based on separate accounting. It highlights major advantages, such as the elimination of profit shifting within multinational groups; and it discusses new distortions and the impact on tax competition. The analysis exploits different datasets to assess the direct revenue implications for individual countries under alternative formulas. The distributional effects across countries are found to be large, reflecting major discrepancies between where profits are currently attributed and where factors of production are located or sales take place. The largest losses appear in investment hubs (i.e. countries with a disproportionate ratio of foreign direct investment to GDP), while several large advanced countries are likely to gain. Developing countries gain most likely if employment receives a large weight in the formula; they also tend to benefit, on average, from a formula based on sales by destination.

Modeling the impact assessment of agricultural sector on economic development as a basis for the country’s investment potential

In the context of countries integration into the world economic space, agricultural sector is one of the priorities and strategically important sectors of the national economy. Development of instruments aimed to increase investment potential of this sector is therefore an important component of the country’s economy growth. The article proposes a science-based model of the impact of the agricultural sector on the economic development level of countries trying to move towards European integration.It was found that the employment rate (+58.4) has the largest influence on the rate of GDP change in the studied group of countries (Ukraine, Moldova, Georgia, Armenia). The impact of the gross value added of the manufacturing sector on its economic growth is positive (+44.6). The negative foreign direct investment ratio in the model (–40.3) may be due to the fact that the indicator in the studied countries is still largely influenced by the intervention of the state mechanism, significant uncertainty and risk, which is a deterrent to the overall economic development. An important result of the study was that foreign direct investment had a negative impact on economic growth in developing countries. Further development of the investment potential of a country’s agricultural sector provides for a radical acceleration of scientific and technological progress and, on this basis, a reduction in the cost of a unit of agricultural products and food and an increase in their competitiveness in the domestic and world markets.

Corporate Social Responsibility in Pakistan: A Legal Perspective with Reference to MNEs

It is no secret that many multinational enterprises have annual revenues higher than that of the GDP of a significant number of less developed countries put together. This fact puts them in a position not only to influence the host country's policies and but also lives of the people. With the rise of Multi-National Enterprises and foreign investments, the concept of Corporate Social Responsibility, theoretically a self-regulatory mechanism to ensure the active participation of corporations for betterment of society in general, has gained importance in International Law. Given the fact that a huge capital is flowing in Pakistan, it is significant to understand and evaluate the extent to which the principles of CSR are being followed in Pakistan, with a special reference to foreign investment. High ratio of Foreign Direct Investment to the annual budget of Pakistan in recent years coupled with the fact that CSR is still relatively a new concept in Pakistan amplifies the importance of CSR in Pakistan in relation to Foreign Investments. Since CSR, as per OECD guidelines, requires the international corporations to take certain measures to ensure the betterment of the locality and community, the research shall attempt to find out whether the foreign companies working in Pakistan are complying with the norms of CSR and if they do, to what extent those principles are being followed. To do that, we shall try to understand the concept of CSR, to trace down its origins, and to study its elements and key drivers. Moreover, the impacts of compliance of CSR especially on the people, environment and goals of sustainable development shall also be taken into account. The study shall try to search relevant laws, rules, regulations and guidelines, both in international and domestic legal skeletons, which emphasize the significance of CSR and its implementation. We shall try to find out whether any legal recourse or remedies are available to the people and the State of Pakistan in case foreign MNEs do not implement the CSR regulations.

The Determinants of FDI in Sub-Saharan Economies: A Study of Data from 1990–2017

Foreign Direct Investment (FDI) can bring in much needed capital, particularly to developing countries, help improve manufacturing and trade sectors, bring in more efficient technologies, increase local production and exports, create jobs and develop local skills, and bring about improvements in infrastructure and overall be a contributor to sustainable economic growth. With all these desirable features, it becomes relevant to ascertain the factors which attract FDI to an economy or a group of adjacent economies. This paper explores the determinants of FDI in ten sub-Saharan economies: Liberia, Sierra Leone, Ivory Coast, Ghana, Nigeria, Mali, Mauritania, Niger, Cameroun, and Senegal. After an extensive literature review of theories and empirical research, using a set of cross-sectional data over the period 1990–2017, two econometric models are estimated with FDI/GDP (the ratio of Foreign Direct Investment to Gross Domestic Product) as the dependent variable, and with inflation, exchange rate changes, openness, economy size (GDP), income levels (GNI/capita (Gross National Income) per capita), and infrastructure as the independent variables. Over the period, higher inflows of FDI in relation to GDP appear to be have been attracted to the markets with better infrastructure, smaller markets, and lower income levels, with higher openness and depreciation in the exchange rate, though the coefficients of the last two variables are not significant. These results show the type of FDI attracted to investments in this region and are evaluated from theoretical and practical viewpoints. FDI is an important source of finance for developing economies. On average, between 2013 and 2017, FDI accounted for 39 percent of external finance for developing economies. Policy guidelines are formulated for the enhancement of FDI inflows and further economic development in this region. Such a study of this region has not been made in the recent past.

International synchronization of the Mexican states business cycles: Explaining factors

The aim of this paper is to identify the explaining factors of the synchronization of the business cycles of the Mexican states and those of the US economy. The cycle indicator is obtained by de-trending the series of total formal employment (Mexican states) and nonfarm employment and industrial production (US). In general, our panel data model estimations suggest the existence of spatial autocorrelation and significant time-period fixed effects. Also, the estimates indicate a significant and positive effect of the ratio of foreign direct investment to gross domestic product (GDP), which may be supplementing the impact of international trade (driven by the most internationally integrated states) and a negative effect of the ratio of remittances to GDP (driven by less integrated states). Finally, the evidence suggests that more similar productive structures yield more synchronized business cycles.

Злоупотребление налоговыми соглашениями: анализ рисков на макроуровне (на примере Республики Армения)

The article analyzes domestic tax legislation of the Republic of Armenia and main countries investing in Armenia in combination with double tax treaties concluded between Armenia and these countries. The aim of such analysis is to find out the riskiest double tax treaties in terms of tax treaty shopping potential. Research approach is based on assessment of indicator characterizing country position in the global investment and capital flows comparing to the main countries investing in Armenia. This indicator is determined as ratio of foreign direct investment to gross domestic product. Based on this assessment countries-investors were divided to two groups according to the level of tax base erosion risk. The article further presents the detailed analysis of national legislation and double tax treaties with these countries. Moreover, the authors discuss international experience of developing legal approaches towards addressing the issue of tax treaty abuse, such as Principle Purpose Test, Limitation of Benefits Rule and Concept of Beneficial Owner of Income. The authors also analyze international experience of formulating the criteria of assessment of necessary conditions for obtaining tax treaty benefits. These approaches can be used for development of international tax policy in the Republic of Armenia with the aim of defending its sovereign tax base and creating certain and sustainable business and tax rules for foreign investors and domestic taxpayers expanding overseas.

Importance of FDI on the Growth of Pakistan and Azerbaijan

In this paper, we have found out the impact of foreign direct investment on the development of Pakistan and Azerbaijan. We have utilized the secondary data for accord results. Our results showed that ratio of foreign direct investment is high in few countries and also low due to terrorism. In 1992, the inflow of foreign direct investment is high at the same year inflows in Azerbaijan were at the poor rate. In the year 2009, the inflows in Pakistan were 245.45 US dollars while in Azerbaijan the inflows were nothing. Our paper is trying to explore that most revenue area in business are education and information technology. On the other side, our paper is also trying to show that foreign direct investment is backbone of the economy. Therefore, we suggested that Pakistan and Azerbaijan should remove such factors which have an impact on the foreign direct investment.

English

Economic policies in every nation strive to attain basic macroeconomic goals, one of which is poverty reduction. The paper examines empirically whether or not financial deepening has played a significant role in poverty alleviation effort in Nigeria for the period 1990 to 2013. Utilizing both quantitative and descriptive analyses, the paper estimated three models in which poverty rates for the rural areas, urban areas as well as national poverty rates were regressed on financial development indicators. Based on the estimated parameters, the paper found that the coefficient of ratio of broad money supply to GDP reduces poverty rate in Nigeria. The ratio of market capitalization to GDP and ratio of foreign direct investment in equities to GDP have positive impact on rural and urban poverty reduction respectively. However, the ratio of credit to the private sector and the ratio of total stock traded to GDP revealed opposite impact on poverty alleviation at all levels. The descriptive analysis indicated that poverty rate in Nigeria has been unacceptably high in spite of abundant natural and human resources. The paper therefore, recommends the need for urgent reforms in the financial sector that would facilitate development in both the money and capital markets to improve liquidity; reduce interest rate spread to attract deposits and broaden financial access to the poor. Key words: Poverty rate, financial deepening, ordinary least squares(OLS).

The relation between the foreign direct investments and the economic security in Latin America

El objetivo principal del artículo es analizar la seguridad económica, entendida como estabilidad macroeconómica a través de las siguientes variables: la relación de los flujos de inversión extranjera directa en América Latina con el valor del índice de corrupción, el coeficiente GINI y el Producto Interior Bruto. La hipótesis parte del hecho de que cuanto mayor sea el coeficiente GINI y menor la puntuación en el ranking de corrupción según Transparency International, mayor inversión recibe el país y mayor es su nivel de seguridad económica aunque no es la única razón. Hemos demostrado empíricamente mediante un análisis econométrico que hay una fuerte correlación entre las variables mencionadas en caso de los países de América Latina, haciendo hincapié en los casos extremos de Uruguay y el de Venezuela y los más moderados de México y Brasil. Por lo que tenemos conocimiento no hay ningún estudio relacionado a la seguridad económica usando esta metodología para el caso de América Latina, donde al final se confirma la hipótesis planteada

Attracting Foreign Direct Investment

Like many other developing countries, South Asian nations have been experiencing increased foreign direct investment inflows over the past decade as developing countries get a larger share of cross-border investments that were once sent to developed countries. Nonetheless, South Asia’s inflows of foreign direct investment remain the lowest relative to gross domestic product among developing country regions. Why are South Asia’s foreign direct investment inflows so low and what lessons can be drawn for developing countries as a whole? The analysis in this article uses a novel empirical model that accounts for possible trends in convergence in the ratio of foreign direct investment to gross domestic product between countries and cross-sectional data for 78 countries from 2000 to 2011. The sample contains 52 developing countries. The analysis finds that two key factors are at work—high overall regulatory restrictions on foreign direct investment and specific restrictions placed on doing business with other countries. These factors include overall trade restrictiveness, which reduces the benefits to cross-border investments, and weak institutions to protect foreign investors and facilitate investment. Nonetheless, the potential for faster growth in intra- and inter-regional foreign direct investment flows is significant. The main factors leading to this conclusion are South Asia’s current low levels of foreign direct investment, the many unexploited opportunities for embodied knowledge transfer, and supply-chain linkages. The overall lessons for developing countries are that liberalizing policy constraints in both trade and foreign investment, keeping corporate tax rates modest, and improving governance and transparency could help to substantially improve foreign direct investment flows.

Foreign Direct Invesstment in Nigeria; Overcoming Legal and Regulatory Challenges to Foreign Direct Investments in Nigeria: Is the Nigerian Government Doing Enough?

Foreign Direct Invesstment in Nigeria; Overcoming Legal and Regulatory Challenges to Foreign Direct Investments in Nigeria: Is the Nigerian Government Doing Enough?

The Effect of Globalization on National Income Inequality

AbstractWe assess the effect of globalization on income inequality within countries, focusing on the influence of accumulated foreign direct investment stocks. We analyze data on inequality and foreign investment for 72 countries, 1970-90, incorporating in our tests the Kuznets (1955) curve, the character of political institutions, and various other aspects of the economy and society emphasized in previous research. Our results indicate that globalization does not increase national income inequality. The ratio of foreign direct investment to gross domestic product is unrelated to the distribution of incomes in both developing and developed countries. The share of income received by the poorest 20% of society also is unaffected by foreign investment. Nor are alternative measures of economic openness – the trade-to-GDP ratio and Sachs and Warner's (1995) measure of free trading policies – associated with greater income inequality. If foreign investment increases average incomes in developing countries, as recent research indicates, and does not increase inequality, it must benefit all strata of these societies, including the poor.