FDI and economic growth: the role of natural resources?

Hayat, Arshad

doi:10.1108/jes-05-2015-0082

Cited by 78 publications

(58 citation statements)

References 33 publications

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“…More specifically, the literature consistently points to declining factor productivity as a cause and characteristic of the MIT (Martin, 2017). Other contributing factors include: slow growth and the composition of investment (particularly where previous high and unsustainable government or foreign investment rates are not supported by domestic savings) (Hayat, 2014); heavy reliance on FDI to fund exports; lagging educational attainments of the labor force (Leibfritz & Roeger, 2008); a failure to develop new technologies and products; overreliance on imports of capital and technology intensive goods (Mishal & Abulaila, 2007); insufficient R&D; a lack of export diversification; and limited product complexity. In addition, the slow development of modern infrastructure, weak institutions (including the legal environment), and unfavorable demographics are cited as potential factors hampering sustainable development and growth (North, 1989).…”

Section: Controversy Over Mit In the Literaturementioning

confidence: 99%

Middle-Income Trap: The Case of Poland

Leven¹

2020

berj

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The middle-income trap (MIT) describes systemic growth obstacles shared by various countries that occur typically at the middle-income level of their development. The following analysis relies on Rostow's classification of the stages of economic development. We focus on Rostow stages three and four, where moving from labor intensive, import and foreign direct investment (FDI) driven growth to reliance on high value-added output and exports with embedded high content of capital and technology can render sustainable long-term growth problematic. To examine MIT we study Poland, which has relied on relatively low labor costs, imported technologies, funding from the European Union and FDI to attain middle-income status. A recent slowing in Poland's growth may signal that it has exhausted some of these growth factors and is more vulnerable to MIT. To assess this vulnerability, we analyze changes in Poland's factor productivity, investment patterns, FDI, labor force educational attainments, new technology/product development, imports, export diversification, product complexity, and other factors. We conclude that certain conditions consistent with MIT are gaining importance in Poland and represent a challenge to its future economic growth.

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Section: Controversy Over Mit In the Literaturementioning

confidence: 99%

Middle-Income Trap: The Case of Poland

Leven¹

2020

berj

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“…In an examination by Hayat (2018), he investigated if the natural resource wealth influences the FDI growth relationship. Utilizing panel data for an example the period 1993-2012, the paper utilizes fixed effects model and presume that FDI inflow quickens financial progress of the host nation.…”

Section: Literature Reviewmentioning

confidence: 99%

Foreign Direct Investment Flow to Africa: Does Natural Resources Matter？

Peprah¹,

Yao²,

Dankyi³

2019

IJEF

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In this study, it explored connections between FDI inflows and natural resource. The paper is an effort to investigate a sample of 10 most resourced sub-Sahara African countries and examine the influence of natural resources on FDI inflow. Further, natural resource wealth is reflected to weaken the FDI inflow. This study discovers if the natural resource overflow affects the FDI inflows. By means of panel data for a sample dated 1990-2017, the paper employed fixed effects method and settles that natural resource slows down FDI inflow of the host nation. The results indicate that economic growth, labor force, trade openness and financial development framework promote FDI inflow in Sub-Sahara Africa countries. The study proposes that FDI inflow to SSA is not only driven by the availability of natural resources in a country but by some exogenous factors, countries with non-existence of natural resources and can obtain FDI by cultivating their bodies and policy environment. Second, multifaceted organizations like the IMF and the World Bank can play a significant role in assisting FDI by encouraging good organisations in SSA.

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“…Chen et al (2015) argue that the motive is indifferent from Western investors. Generally, FDI earmarked for natural resources is considered unhealthy for the host economy due to resource curse (Hayat 2014) however, the threshold of the case is not known. Hence, future researches can look at this aspect and take natural resource factor as a threshold variable.…”

Section: Conclusion and Recommendationsmentioning

confidence: 99%