Abdel Aal Mahmoud, Ashraf (2010): FDI, local Financial Markets, employment and poverty alleviation.
Download (1141Kb) | Preview
This paper examines the precise links between foreign direct investment (henceforth, FDI) and poverty alleviation, where so far there are few studies attempted to analyze empirically this relationship. The FDI inflows vary across international borders, therefore FDI reduces poverty only under certain circumstances. “Roll out the red carpet for foreign investors and they will come” ; Countries with better financial systems, and healthy business environment are able to attract more FDI, exploit it more efficiently and reduce poverty. Empirical analysis using panel data of 62 countries, from 1996 to 2007, shows that FDI appears regularly to be a key source of employment for women in Non OECD countries and has a favorable effect on poverty reduction in the host country if interacted with monetary and nonmonetary variables.
|Item Type:||MPRA Paper|
|Original Title:||FDI, local Financial Markets, employment and poverty alleviation|
|Keywords:||FDI; Financial market ; Poverty ; Employment|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
I - Health, Education, and Welfare > I3 - Welfare and Poverty > I32 - Measurement and Analysis of Poverty
F - International Economics > F3 - International Finance > F36 - Financial Aspects of Economic Integration
|Depositing User:||Ashraf Abdelaal|
|Date Deposited:||04. Jul 2010 17:50|
|Last Modified:||12. Feb 2013 21:57|
Aaron, C. (1999:25) “The contribution of FDI to poverty alleviation” Report, the Foreign Investment Advisory Service, Singapore
Alfaro, L. and A. Charlton (2007:20), ‘Growth and the Quality of Foreign Direct Investment: Is All FDI Equal?’, Harvard Business School Working Paper 07-072.
Alfaro L, Chanda A, Kalemli-Ozcan S, Sayek S (2004:372) FDI and economic growth: the role of local financial markets. Journal of international Economics 64:89–112
Anil Kumar,( 2007:7) ,Does Foreign Direct Investment Help Emerging Economies? Economic Letter federal reserve bank of dallas vol. 2, NO. 1
Bagehot, W.  1962 Lombard Street: a Description of the Money Market (with a New Introduction by Frank C. Genovese), Homewood, Ill. Richard Irwin.
Balasubramanyam, M. Salisu and David Sapsfor (1996:596), ‘’Foreign Direct Investment and Growth in EP and IS Countries’’ The Economic Journal, No. 106, pp. 92-105
Barro, Robert (1991:7070). ‘Economic Growth in a Cross Section of Countries’. The Quarterly Journal of Economics, 106: 407-43.
Barro, R., Sala-i-Martin, X., (1997:378). Technology diffusion, convergence and growth. Journal of Economic Growth 2, 1 –26.
Barro, R.J. and Becker, G.S. (1989:453) ‘Fertility choice in a model of economic growth’, Econometrica 57(2): 481-501.
Beck, T., Levine, R., and N. Loyaza (2000:1281) Finance and the Sources of Growth. Journal of Financial Economics 58, 261–300.
Becker, G.S., Murphy, K.M. and Tamura, R. (1990:1094) ‘Human capital, fertility, and economic growth’, Journal of Political Economy, 98(5): S12-S37.
Bhargava, A., Jamison, D., Lau, L., & Murray, C. (2001:205). Modeling the effects of health on economic growth. Journal of Health Economics, 20(3), 423–440.
Bloom, D. E., Canning, D., & Sevilla, J. (2004:192). The effect of health on economic growth: A production function approach. World Development, 32(1), 1–13.
Bloom, D. E., Canning, D., & Jamison, D. (2004:68). Health, wealth and welfare. Finance and Development, 41(1), 10–15.
Bloom, D. E. (2005:9). Education and public health: Mutual challenges worldwide. Comparative Education Review, 49(4), 437–451.
Blomstrom, Magnus, and Ari Kokko (1996:115), The Impact of Foreign Investment on Host Countries: A Review of the Empirical Evidence, Policy Research Working Paper 1745. Washington DC: World Bank.
Borensztein, E., De Gregorio, J., Lee, J.-W., (1998:1828). How does foreign direct investment affect economic growth. Journal of International Economics 45, 115– 135.
Carkovic, M., Levine, R., (2003:387). Does Foreign Direct Investment Accelerate Economic Growth? University of Minnesota, Working Paper.
Caves , Richard E. ,(1974:739). Multinational Firms, Competition, and Productivity in Host-Country Markets, The London School of Economics and Political Science.
Caves, Richard E. (1998:990), “Industrial Organization and New Findings on the Turnover and Mobility of Firms”, Journal of Economic Literature, 36(4).
Chuhan, Punam & Perez-Quiros, Gabriel & Popper, Helen, (1996:81). "International capital flows : do short-term investment and direct investment differ?," Policy Research Working Paper Series 1669, The World Bank
Chee-Keong Choong & Zulkornain Yusop & Siew-Choo Soo, (2005:5). "Foreign Direct Investment And Economic Growth In Malaysia: The Role Of Domestic Financial Sector," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 50(02), pages 245-268
George Papaconstantinou, (1995) “Globalisation, Technology, and Employment: Characteristics and Trends,” STI Review, No. 15, 1995, p. 177. Cotton, L and V Ramachandran, (2001:9) ‘Foreign Direct Investment in Emerging Economies: Lessons from sub-Saharan Africa’ WIDER Discussion Paper No. 2001/82
Davis E.P., Karim D., (2008:26), Comparing early warning systems for banking crises, Journal of Financial Stability, 4, 89-120.
Deininger, K. dan L.Squire (1996:2002), "A New Data Set for Measuring Income Inequality", The World Bank Economic Review, No.10.
De Mello, M. (1996:25) “Foreign Direct Investment, International Knowledge Transfers and Endogenous Growth: Time Series Evidence” Mimeo. Department of Economics, University of Kent, Kent.
De Mello L. R. (1999:393). Foreign direct investment-led growth: evidence from time series and panel data., Oxford Economic Papers, No. 51, pp. 133-151.
Dees, Stephane, (1998:120). " Foreign Direct Investment in China: Determinants and Effects," Economic Change and Restructuring, Springer, vol. 31(2-3), pages 175-94.
Demirguc-Kunt A., Detragiache E., (1998:713), The Determinants of Banking Crises in Developing and Developed Countries, IMF Staff Papers, 45, 81-109.
Dollar, David, and Aart Kraay (2001:2102). ‘Growth is Good for the Poor’. Washington DC: World Bank, Development Research Group
Durham, J. B. (2004:122) Absorptive Capacity and the Effects of Foreign Direct Investment and Equity Foreign Portfolio Investment on Economic Growth. European Economic Review. 48, 285–306.
Dutta, Nabamita and Roy, Sanjukta (2008:4): Foreign Direct Investment, Financial Development and Political Risks. Forthcoming in: Journal of Developing Areas
Erdil, E. and Yetkiner, I.H. (2008:1), “The Granger-causality between health care expenditure and output: a panel data approach”, Applied Economics, first published on 23 June 2008.
Filer, R., O. Schneider and J. Svejnar (1995:7). Wage and non-wage labour cost in the Czech Republic: The impact of fringe benefits, CERGE-EI Working Paper No. 77,
Fisher, R.A., (1932: ). Statistical Methods for Research Workers, 4th Edition. Oliver & Boyd, Edinburgh.
Greenwood J, Jovanovic B (1990:1346) Financial development, growth, and the distribution of income. Journal of Political Economy 98:1076–1107
Globerman, S., & Shapiro, D. (2002:154). Global foreign direct investment flows: The role of governance infrastructure. World Development, 30(11), 1899–1919.
Gurley JG, Shaw ES (1955:606) Financial aspects of economic development. American Economic Review 45:515–538
Goldsmith RW (1969) Financial structure and development. Yale University Press, New Haven
Hermes, Niels and Lensink, Robert(2003:129) 'Foreign direct investment, financial development and economic growth', Journal of Development Studies,40:1,142 — 163
Hicks JR (1969) A theory of economic history. Oxford University Press, Oxford
Hurlin C, Venet B. (2001:77). Granger causality tests in panel data models with fixed coefficients. Working Paper. EURIsCO, Universit´e Paris IX Dauphin.
James Ang,( 2009:6). "Financial development and the FDI-growth nexus: the Malaysian experience," Applied Economics, Taylor and Francis Journals, vol. 41(13), pages 1595-1601
Jenkins, Carolyn and Lynne Thomas (2002:42), “Foreign Direct Investment in Southern Africa: Determinants, Characteristics and Implications for Economic Growth and Poverty Alleviation”, Final Report, October, Globalization and Poverty Project, Centre for the Study of African Economies, University of Oxford
King RG, Levine R (1993b:1153) Finance, entrepreneurship, and growth: theory and evidence. Journal of Monetary Economics. 32:513–542
Kawai, H., (1994:72). “International Comparative Analysis of Economic Growth: Trade Liberalization and Productivity”, Developing Economies 32, pp. 372-397.
Kaufmann, D., Kraay, A., Mastruzzi, M., (2005:775 ). Governance Matters IV: governance indicators for 1996–2004. World Bank Policy Research Working Paper, vol. 3630. World Bank, Washington, D.C
Kyung So Im, M. Hashem Pesaran, Yongcheol Shin, Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics, 2003, 115, 53-74. Earlier version available as unpublished Working Paper, Dept. of Applied Economics, University of Cambridge, Dec 1997, (http://www.econ.cam.ac.uk/faculty/pesaran/lm.pdf)
Larrain G, Reisen H, Maltzan J. (1997:122). Emerging market risk and sovereign credit ratings. OCED development Centre Technical Paper No. 124.
Lipsey, Robert E.,( 2001:119), “Foreign Direct Investors in Three Financial Crises,” NBER Working Paper No. 8084 (Cambridge, Massachusetts: National Bureau of Economics Research).
Levin, Andrew, Lin, Chien-Fu and Chia-Shang James Chu,(2002:1967) Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties. Journal of Econometrics,108, 1-24, 2002.
Loewendahl, Henry, (2001:56). A Framework for FDI Promotion. Transnational Corporations, 10(1), 1-42
Lucas, R. E. Jr., (1990:1238). Why doesn’t capital flow from rich to poor countries? American Economic Review, 80(2), 92–96.
Mauro, P. (1995:3412) “Corruption and Growth.” Quarterly Journal of Economics 110 (3): 681–712.
Marcella alsan, David e. bloom and David canning,(2006:42) The Effect of Population Health on Foreign Direct Investment Inflows to Low- and Middle-Income Countries World Development Vol. 34, No. 4, pp. 613–630, 2006
McKinnon RI (1973) Money and capital in economic development. Brookings Institution, Washington, D.C.
Miyamoto, K. (2003:48). Human capital formation and foreign direct investment in developing countries. Technical Paper No. 211, OECD, Paris.
Nair-Reichert, Usha & Weinhold, Diana,( 2001:178). " Causality Tests for Cross-Country Panels: A New Look at FDI and Economic Growth in Developing Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(2), pages 153-71, May.
Nigh, D. (1985:134), “The Effect of Political events on US Foreign Direct Investment”: A polled Time Series Cross Sectional Analysis, Journal of International Business Studies, 16, 1-17.
Noorbakhsh, F., Paloni, A., & Youssef, A. (2001:200). Human capital and FDI inflows to developing countries: New empirical evidence. World Development, 29(9), 1593–1610.
Nunnenkamp, Peter, and Julius Spatz (2004:16) FDI and Economic Growth in Developing Economies: How Relevant are Host-Economy and Industry Characteristics? Transactional Corporations 13:3, 53–83.
Omran M. & Bolbol A. (2003:10) . Foreign Direct Investment, Financial Development, and Economic Growth: Evidence from the Arab Countries Review of Middle East Economics and Finance, Vol. 1, No. 3, pp. 231-249
Proksch, Marc (2004). Selected Issues on Promotion and Attraction of Foreign Direct Investment in Least Developed Countries and Economies in Transition, Investment Promotion and Enterprise Development Bulletin for Asia and the Pacific, 2, 1-17, United Nations Publications
Ravallion, Martin & Shaohua Chen, (1996:541). "What can new survey data tell us about recent changes in distribution and poverty?," Policy Research Working Paper Series 1694, The World Bank
Rappaport, J.,( 2000:27). How Does Openness to Capital Flow Affect Growth? Mimeo, Federal Reserve Bank of Kansas City, June.
Rebecca M. Neumann, a, , Ron Penla and Altin Tankua (2009:7) . Volatility 27of capital flows and financial liberalization: Do specific flows respond differently? International Review of Economics & Finance Volume 18, Issue 3, June 2009, Pages 488-501
Robert Hoffmann & Chew-Ging Lee & Bala Ramasamy & Matthew Yeung, (2005:19). "FDI and pollution: a granger causality test using panel data," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(3), pages 311-317.
Romer, P., (1993:618). Idea Gap and object gaps in economic development. Journal of Monetary Economics 32 (3), 543-573
Roemer, Michael, and Mary Kay Gugerty (1997:118), "Does Economic Growth Reduce Poverty", CAER I Discussion Paper No. 5, Cambridge, MA.: Harvard Institute for International Development.
Sarno, Lucio, and Mark P. Taylor, (1999:131), “Hot Money, Accounting Labels and the Permanence of Capital Flows to Developing Countries: an Empirical Investigation,” Journal of Development Economics, Vol. 59, No. 2, pp. 337–64.
Scholl hammer, H. and D. Nigh (1984), “the Effect of Political event on Foreign Direct Investments by German Multinational Corporations”, Management International Review, 24, 18-40.
Singh,Harinder,and Kwang W.(1995:172). Some New Evidence on Determinants of Foreign Direct Investment in Developing. Policy Research Working Paper WPS 1531,Washington:World Bank
Shaw ES (1973) Financial deepening in economic development. Oxford University Press, New York
Stiglitz, Joseph E. (1998:884), More Instruments and Broader Goals: Moving Toward the Post-Washington Consensus, The 1998 WIDER Annual Lecture, Helsinki, Finland, January 7, 1998.
Tybout, James (2000:677), “Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?”, Journal of Economic Literature. 38(1).
Wei, Shang-Jin, (2001:53). "Domestic Crony Capitalism and International Fickle Capital: Is There a Connection?," International Finance, Blackwell Publishing, vol. 4(1), pages 15-45, Spring
Zhang, K.H. (2001:129), Does foreign direct investment promote economic growth? Evidence from East Asia and Latin America ,journal Contemporary Economic Policy, 19(2), 175-185
Zhang, K., and Markusen, J. (1999:163). Vertical multinationals and host-country characteristics. Journal of Development Economics,59, 233-25
- Abdel Aal Mahmoud, Ashraf FDI, local Financial Markets, employment and poverty alleviation. (deposited 04. Jul 2010 17:50) [Currently Displayed]