FDI, local Financial Markets, employment and poverty alleviation

Abdel Aal Mahmoud, Ashraf (2010): FDI, local Financial Markets, employment and poverty alleviation.

Abstract

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
• Language: English
• 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 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; O - Economic Development, Innovation, 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, Well-Being, and Poverty > I32 - Measurement and Analysis of Poverty; F - International Economics > F3 - International Finance > F36 - Financial Aspects of Economic Integration

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