Foreign direct investment and income inequality: Further evidence

Tsai, Pan-Long

doi:10.1016/0305-750x(95)00136-z

Cited by 158 publications

(58 citation statements)

References 20 publications

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“…This finding on foreign direct investment is consistent with the investment-inequality literature (Pan-Long, 1995;Basu & Guariglia, 2007). In a recent study where foreign direct investment is the proxy for globalization (Kai & Hamori, 2009), its disequalizing effect depends on the level of development in the country: a conclusion that aligns with some theoretical postulations (see Greenwood & Jovanovic , 1990).…”

Section: Unrestricted 2sls Regressionssupporting

confidence: 86%

Inequality, Finance and Pro-Poor Investment in Africa

Asongu

Tchamyou

2015

SSRN Journal

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Section: Unrestricted 2sls Regressionssupporting

confidence: 86%

Inequality, Finance and Pro-Poor Investment in Africa

Asongu

Tchamyou

2015

SSRN Journal

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“…Domestic investors compare the returns to domestic and foreign investments while private investors and bank lenders will invest within the African economy only if returns are attractive enough. From a broad perspective, the results of financial openness are consistent with empirical investment-inequality literature (Pan-Long, 1995;Basu & Guariglia, 2007;Kai & Hamori, 2009;Asongu, 2011a) and theoretical postulations (Greenwood & Jovanovic ,1990). All these have pointed to the disequalizing redistributive income effect of foreign investment, which in contextual terms depict decrease in inequality adjusted human development.…”

Section: Globalization and Human Developmentsupporting

confidence: 82%

Globalization and Africa: implications for human development

Asongu

2013

International Journal of Development Issues

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in February 2012Abstract Purpose -The purpose of this paper is to assess the effects of trade and financial globalization on human development in 52 African countries using updated data (1996-2010) and a new indicator of human development (adjusted for inequality).Design/methodology/approach -The estimation technique used is a Two-Stage-Least Squares Instrumental Variable methodology. Instruments include: income-levels, legal-origins and religious-dominations. The first-step consists of justifying the choice of the estimation technique with a Hausman-test for endogeneity. In the second-step, we verify that the instrumental variables are exogenous to the endogenous components of explaining variables (globalization dynamic channels) conditional on other covariates (control variables). In the third-step, the strength and validity of the instruments are assessed with the Cragg-Donald and Sargan overidentifying restrictions tests respectively. Robustness checks are ensured by: (1) use of alternative globalization indicators; (2) endogeneity based estimation; (3) adoption of two interchangeable sets of instruments; (4) estimation with a technique that controls for timeinvariant unobservable shocks that affect openness and human development simultaneously.Findings -Findings broadly indicate that while trade globalization improves human development (consistent with the neoliberal theory), financial globalization has the opposite effect (in line with the hegemony thesis). The 'life expectancy' component of the HDI weighs most in the positive impact of trade globalization on human emancipation.Practical implications -Capital accounts should be opened in tandem with financial and institutional development. The investment atmosphere needs improvement to curtail capital flight (about 39%). Other policy implications include: adoption of openness options in a selective and gradual manner, development of some industrial backbone for an importsubstitution or export-led industry, emphasis on regional trade and building capacity, development of the agricultural sector with continuous government assistance, building of rural infrastructure, increasing adult literacy rate and developing human resources, fighting corruption and mitigating wastages in government expenditure.1 Simplice A. Asongu is Lead economist in the Research Department of the AGDI (asongus@afridev.org). 3Originality/value -These findings are based on very recent data. Usage of the in...

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“…Market size, easy accessibility to export market, government incentives, developed infrastructure, cost-effectiveness, and macroeconomic climate of China are more constructive to India attracting foreign investors. Soltani & Ochi, (2012) examine the relationship between FDI and economic growth of Tunisia for the period of 1975-2009. Cointegration and error correction models are applied to test the short and long-run relationship between the variables.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of FDI on the Economic Growth of Sri Lanka: An ARDL Approach to Co-integration

Samantha

Liu

2017

IJIED

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The impact of foreign direct investment(FDI) on host country economic growth is a debatable issue in the recent economic literature. The purpose of this study is to examine this issue for a country which practiced comparatively more liberal economic policies within the South Asian region over four decades. The ARDL approach to cointegration is applied to identify long-run relationship and short-run dynamics between selected variables for the period of 1978 to 2015 for Sri Lanka. The empirical result confirms the long run relationship between the variables. FDI is positively correlated with economic growth in the short run and long run, but it is not a significant factor for economic growth in Sri Lanka. Sri Lanka will have to undertake policy reforms related to FDI in order to attract more greenfield investments to boost economic growth creating new job opportunities and expanding exports in the manufacturing sector. These findings would be an example for other small open economies with similar economic characteristics.

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Foreign direct investment and income inequality: Further evidence

Cited by 158 publications

References 20 publications

Inequality, Finance and Pro-Poor Investment in Africa

Inequality, Finance and Pro-Poor Investment in Africa

Globalization and Africa: implications for human development

The Impact of FDI on the Economic Growth of Sri Lanka: An ARDL Approach to Co-integration

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