Foreign Direct Investment (FDI), Investment in Construction and Poverty in Economic Crises (Denmark, Italy, Germany, Romania, China, India and Russia)

Abstract

This study aims to examine the impact of foreign direct investment (FDI), investment in construction and poverty in various countries. The Russian Federation invests heavily in construction and it is located both in Europe and Asia. Russia is usually described as a European country (while 70% of its territory is in Northern Asia, 80% of the population resides in Europe). That is why in this document both developed and emerging countries are considered; the former are represented by the EU members of different economic levels and the latter by BRICS countries. We looked at economically different countries to determine the best differentiated data in order to answer the question: “Why does a high level of poverty persist in Russia if Russian officials have repeatedly reaffirmed their commitment to the implementation of the Sustainable Development Goals (SDGs) by investing heavily in construction and attracting FDI?”. For the estimation, we used an autoregressive distributed lag (ARDL), considering cointegration and heteroscedasticity, in which the current values of the series depend both on the past values of this series and on the current and past values of other time series. Having received statistical data, we were able to compare the economic development of countries with some economic growth theories. 4–5% FDI share of the GDP helps to contain the negative impact of financial crises. Investment in construction supports the economies of countries in the long term and maintains or reduces the poverty level by increasing the assets of the population. Empirical data also helped us to evaluate the economic growth patterns and poverty in these seven countries. China and the Russian Federation will find themselves at different “poles”. China uses several theories and models simultaneously for economic development and poverty reduction and the Russian Federation does not keep to an established theory or a model of economic growth.

Study on regional differences and convergence of the green development quality of the construction industry: evidence from China

“…The improvement has a promoting effect on the improvement of the green development quality at the national, central and western regions. Since the reform and opening up, the openness factor has been reflected in FDI in economic modernization (Sukhadolets et al, 2021). For the central and western regions, foreign capital and technology are more conducive to narrowing the difference in green development of construction industry (Babatunde et al, 2018).…”

Be Nice to Thy Neighbors: Spatial Impact of Foreign Direct Investment on Poverty in Africa

“…In fact, a brief review of empirical studies on the FDI-poverty nexus proved to be rather ambiguous. While some studies suggest that FDI has a positive impact on poverty reduction (Sukhadolets et al 2021;Sikandar et al 2021;Magombeyi and Odhiambo 2018;Ganić 2019), others suggest the opposite: a negative impact (Ali et al 2009). For example, Sukhadolets et al (2021) studied the relationship between GDP, FDI, investment in construction, and poverty.…”

“…While some studies suggest that FDI has a positive impact on poverty reduction (Sukhadolets et al 2021;Sikandar et al 2021;Magombeyi and Odhiambo 2018;Ganić 2019), others suggest the opposite: a negative impact (Ali et al 2009). For example, Sukhadolets et al (2021) studied the relationship between GDP, FDI, investment in construction, and poverty. The authors compared a number of countries such as the Russian Federation, including a sample of developed and developing nations.…”