Foreign Direct Investment and the Natural Resource Curse; what is the relationship to Economic Development, Income Inequality and Poverty? Do institutions and Good Governance matter?

Bannerman, Efua (2007): Foreign Direct Investment and the Natural Resource Curse; what is the relationship to Economic Development, Income Inequality and Poverty? Do institutions and Good Governance matter?

Abstract

The aim of this study is to econometrically investigate whether the Dutch Disease and Rent Seeking effects related to the Natural Resource Curse, undermine Foreign Direct Investment’s effect on Economic Development, Income Inequality and Poverty. This involves a cross-country analysis of 69 developing countries over two decades, 1970-1990

• Item Type: MPRA Paper
• Language: English
• Keywords: Foreign Direct Investment; Natural Resource Curse; Economic Growth; Income Inequality; Poverty; Dutch Disease; Rent Seeking
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; F - International Economics > F2 - International Factor Movements and International Business; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

References

Aisbett, E "Why are the Critics so convinced that globalization was bad for the poor.” NBER Working Paper No. W11066, 2005.

Aitken, B, and A. Harrison.“Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela,” The American Economic Review, 89 (3), 605-618, 1999

Appleyard, D and Field, A. International Economics. McGraw Hill, 2001.

Asiedu, E. “Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability” World Development, No. 2005/24. 2005.

Barrell, R., and N. Pain. “ Foreign Direct Investment, Technological Change, and Economic Growth within Europe”. The Economic Journal, Vol 107, No. 445. pp. 1770-1786, Nov 1997.

Barro, R. “Inequality and Growth in a Panel of Countries”. Journal of Economic Growth, 5: 5-32, March 2000.

Barro, R. Determinants of Economic Growth: A Cross-Country Empirical Study. Cambridge: MIT Press, 1997. Blomstrom, M. “Foreign Investment and Spillovers,” New York: Routledge, 1989 Blonigen, B and Wang, M. “Inappropriate pooling of wealthy and poor countries in empirical FDI studies”. NBER Working Paper No. 10378, March 2004.

Borensztein, E., J. De Gregorio, J.W. Lee, “How does Foreign Direct Investment affect Economic Growth”, Journal of International Economics, 45, 115-135, 1998.

Bornshier, V. Chase-Dunn, and Rubinson . “Cross- national Evidence of the Effects of Foreign Investment and Aid on Economic Growth and Inequality: A Survey of Findings and a Reanalysis.” American Journal of Sociology,1978. Bornschier,

V and T. Ballmer-Cao. “Income Inequality: A Cross-National Study of the Relationships Between MNC Penetration, Dimensions of the Power Structure and Income Distribution.” American Sociological Review, Vol. 44, No. 3. pp. 487-506, June 1979.

Brown, D. K., A. V. Deardorff, and R. M. Stern. “The Effects of Multinational Production on Wages and Working Conditions in Developing Countries.” RSIE Discussion Paper No. 483, 2002.

Caves, Richard E. “Vent for Surplus Models of Trade and Growth”, in R.E Baldwin et. A. Trade Growth and Balance of Payments, Chicago 1965

Deininger, K. and L. Squire. “A new data set measuring income inequality’, World Bank Economic Review.” 10, 565-91, 1996.

Firebaugh, G., and F. Beck. “Does Economic Growth Benefit the Masses?: Growth, Dependence, and Welfare in the Third World”. .American Sociological Review, 59, 631-653, 1994.

Galbraith, J., and H. Kum. “Inequality and Economic Growth: A global View based on Measures of Pay.” CESIFO Economic Studies, Vol. 49, 527-556 , 2003.

Goldberg, P., and N.Pavcnik. “Distributional Effects of Globalization in Developing Countries”, Journal of Economic Literature, vol xlv , pp.39-82, March 2007.

Hood, N. and S. Young. “ The Economics of Multinational Enterprise.” Longman Group 1979. International Monetary Fund. Balance of Payments Manual (Washington), 2005

Kentor, J. "The Long-Term Effects of Foreign Investment Dependence on Economic Growth, 1940-1990, The American Journal of Sociology, Vol, 103, No. 4, pp. 1024-1046,1984.

King, R. G., and R.. Levine. “Finance and Growth: Schumpeter might be right.” Quarterly Journal of Economics, Vol. 108, No. 3, pp. 717-737, 1993 Klein.,A and Hadjimichael. “ Foreign Direct Investment and Poverty reduction.” Policy Research Working Paper, 2613. World Bank, June 2001.

Kobrin, S.J. “The Environmental Determinants of Foreign Direct Manufacturing Investment”. Massachusetts Institute of Technology.

Lewis, A.W. “The Industrialization of the British West Indies.” Caribbean Economic Review 2 , 1-39, 1950.

Lichtenberg F., and B. van Pottelsberghe de la Potterie. “International R& D spillovers: A comment.” European Economic Review, 8, pp.1483-1491, 1998.

Lipsey, R. E. “Foreign Direct Investment and the Operation of Multinational Firms: Concepts, History and Data.” NBER Working Paper No. 8665, 2001.

Routledge., P. Mallampaly and K. Sauvant. “Foreign Direct Investment in Developing Countries.” Finance and Development 36, no.1 March 1999.

Rothgeb, J.M. “The Effects of Foreign Investment on Overall and Sectoral growth in Third World States”. Journal of Peace Research 1984.

Sachs, J., and A. “Sources of Slow Growth in African Economies.” Journal of African Economies, vol 6, no 3, pp335-376, December 1997. Sachs, J., and A. “Natural Resource and Economic Growth..” NBER Working Paper No. 5398, December 1997.

Tietenberg, T. Environmental and Natural Resource. Pearson Inc, 1998.

United Nations. World Investment Report 2004.UNCTAD, United Nations, New York, 2004.

United Nations. World Investment Report 2005.UNCTAD, United Nations, New York, 2005.

Van Den Berg, H. “International Trade and Economic Growth.” International Economics, Chapter 5, McGraw-Hill Higher Education, 1 edition, 2003

Winters, L., N. McCulloch, A. Mckay. “Trade Liberalization and Poverty: The Evidence so Far.” Journal of Economic Literature, Vol. 42, No. 1.,pp. 72-115, 2004.

World Bank. World Development Indicators, CD-Rom. Washington, DC: World Bank 2005