Does Economic Freedom Enhance the Impact of Foreign Direct Investment on Economic Growth in North African Countries? A Panel Data Analysis

Zghidi, Nahed; Sghaier, Imen Mohamed; Abida, Zouheir

doi:10.1111/1467-8268.12167

Cited by 60 publications

(59 citation statements)

References 43 publications

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“…The work of Nistor (2014) confirmed the FDI and economic progress association for Romania. Abbes et al (2015) and Omri and Kahoulib (2013) conducted a panel research comprising of 65 countries where the overall outcome indicates that FDI inflow is a key promoter of economic growth confirming the work of Tang et al (2008), Malikane and Chitambara (2017), Zghidi et al (2016), Nasrin and Khan (2016), Almfraji and Almsafir (2014), Inekwe (2013), and Ayadi (2010). Additionally, Adams (2009) submits that the relationship between FDI and economic growth is positive only in the long run.…”

Section: Review Of Literaturementioning

confidence: 72%

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

Joshua

Bekun

Adedoyin

2020

Environ Sci Pollut Res

102

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This study examines the role of industrialization in the energy-growth-FDI nexus for the case of South Africa using data over the period 1970 to 2018. The empirical exercise was conducted using Pesaran Autoregressive Distributed Lag (ARDL) bounds testing approach. To accomplish our study objective, we analyze stationarity properties of the series using the unit root test after which we applied Bayer-Hanck (B-H) combined technique to cointegration to assess whether a long-run relationship exists among the series. Empirical results show that a 1% change in FDI account for 0.002% and 0.013% increase in economic expansion in the short-and long-run respectively. Also, a 1% increase in coal consumption influence GDP negatively by 0.083% and 0.207% in the short and long run respectively. Furthermore, a 1% increase in total natural resource rent positively affects GDP by 0.02% and 0.05% respectively in the short and long run. Industrialization, on the other hand, demonstrates a positive and significant impact on the economic growth process both in the short and long run. Industrialization contributes 0.506% and 1.274% to economic expansion both in the short and long run respectively. The causality tests suggest that a one-way causal link running from FDI to industrialization and from industrialization to coal consumption exists. Finally, FDI inflow drives total natural resource rents in South Africa. This study also gives reliable growth and energy policy proposals to policymakers applicable to countries around the globe.

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Section: Review Of Literaturementioning

confidence: 72%

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

Joshua

Bekun

Adedoyin

2020

Environ Sci Pollut Res

102

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“…Environmental regulation affects the technology spillover effect, absorptive capacity, and capital accumulation effect of foreign direct investment [33]. It increases the cost of foreign-funded enterprises and restricts research and development investment, neither of which is conducive to the spread of advanced technology.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Environmental Regulation on Total Factor Energy Efficiency: A Cross-Region Analysis in China

Lin

2017

Energies

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Environmental regulations are the key measure by which governments achieve sustainable environmental and economic development. This study aimed to determine the direct and indirect impacts of environmental regulations on total factor energy efficiency of regions in China. Since regions have different levels of economic development and resource endowment, we used the slacks-based measure (SBM)-undesirable model to calculate total factor energy efficiency considering regional technology heterogeneity and examined the regional impacts of environmental regulation on this efficiency using the Tobit regression model. A positive direct impact was generated in the eastern region of China by the forced mechanism, which forced enterprises to reduce fossil fuel energy demand and increase clean energy consumption; whereas a negative direct impact was generated in the middle and western regions owing to the green paradox, which is the observation that expected stringent environmental regulation prompts energy owners to accelerate resource extraction. Moreover, indirect impacts through technological progress and foreign direct investment were taken into account in the model, and the results show that the indirect impacts vary across regions. A logical response to these findings would be to develop different policies for different regions.

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“…Azman-Saini et al (2010), for instance, used data from 85 countries and concluded that FDI itself does not matter for economic growth unless it does not go with the security of ownership, freedom of exchange, and market regulations. Zghidi et al (2016), however, documented that the growthenhancing role of FDI is positively related with economic freedom, but only for a smaller sample of four North African countries. Such differences have two implications.…”

Section: Literature Reviewmentioning

confidence: 83%

A provincial analysis of formal economic institutions and private investment in Vietnam

Luat

Trung

2019

JABES

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Does Economic Freedom Enhance the Impact of Foreign Direct Investment on Economic Growth in North African Countries? A Panel Data Analysis

Cited by 60 publications

References 43 publications

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

The Impact of Environmental Regulation on Total Factor Energy Efficiency: A Cross-Region Analysis in China

A provincial analysis of formal economic institutions and private investment in Vietnam

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