Foreign direct investment, income inequality and country risk

Wang, Enze

doi:10.1002/ijfe.2542

Cited by 18 publications

(9 citation statements)

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“…Various studies, e.g., [10,13,21,[64][65][66][67], have assessed the efficacy of GI to improve GP. Robinson and Stubberud [66] explored whether the influence of GI on GP is consistent across small, medium and large enterprises, which confirmed that large organizations seek to protect and preserve the environment by fostering the GI process.…”

Section: Green Innovation and Green Performancementioning

confidence: 99%

The Mediating Effects of Green Innovation and Corporate Social Responsibility on the Link between Transformational Leadership and Performance: An Examination Using SEM Analysis

et al. 2022

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Since the inauguration of the United Nations Sustainable Development Goals (UNSDGs), environmental performance and sustainability have become more important to decision makers, scientists and leaders of organizations than before. In response to this, leaders of different organizations spend all endeavors conserving resources and ensuring environmental sustainability. In this context, transformational leaders have the capacity to ensure the green performance of their organization. The purpose of this study is to test the link between green transformational leadership (GTL), green innovation (GI), corporate social responsibility (CSR) and green performance (GP) in the hotel industry in the Kingdom of Saudi Arabia (KSA). The study empirically tests the mediating effect of GI and CSR on the link between GTL and GP. The study used a quantitative research method via a pre-test instrument, self-distributed and collected from employees in large hotels at different regions of the KSA. The findings from 732 valid responses, analyzed with structural equation modeling (SEM) showed that GTL had a significant effect on GI (β = +0.72, t-value = 14.603, p < 0.001), CSR (β = +0.58, t-value = 8.511, p < 0.001) and GP (β = +0.17, t-value = 2.585, p < 0.001). Moreover, GI and CSR had a direct positive effect on GP (β = +0.10, t-value = 2.866, p < 0.01 and β = +0.61, t-value = 4.358, p < 0.001, respectively). GI had a partial mediation effect (p = 0.048 < 0.05) on the link between GTL and GP. On the other hand, CSR had a perfect mediation effect (p = 0.077 > 0.05) on the link between GTL and GP. This reflects the vital part that CSR plays in this relationship, which can be changed based on the status of CSR. In addition, this reflects the value of CSR in achieving GP, which contributes to the achievement of environmental sustainability at a national level (i.e., the Green Saudi Initiative) at a regional level (i.e., the Green Middle East Initiative) and at an international level (i.e., UNSDGs).

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Section: Green Innovation and Green Performancementioning

confidence: 99%

The Mediating Effects of Green Innovation and Corporate Social Responsibility on the Link between Transformational Leadership and Performance: An Examination Using SEM Analysis

et al. 2022

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“…To do so, we must first optimally select the number of clusters by using three kinds of information criteria (i.e., Akaike information criterion (AIC), Bayesian information criterion (BIC), corrected Akaike information criteria (CAIC)) that are commonly used in the literature on FMM applications (Zuo, 2016;Ouédraogo, Sawadogo R., and Sawadogo H., 2020;Wang and Lee, 2021). Table 3 demonstrates the results from these criteria for each number of clustered models.…”

Section: Resultsmentioning

confidence: 99%

“…This method chooses a threshold for the conditioning factor to split the sample into different subgroups. The main concern of this supervised methodology is that it relies on subjective decisions on the choice of threshold for the conditioning factor (Wang and Lee, 2021).…”

Section: Introductionmentioning

confidence: 99%

“…3 Before FMM analysis, however, the study takes into account cross-sectional dependency in the model by augmented mean group estimation technique (AMG) since common global shocks due to political and financial events and unobserved factors may lead to the co-movement of income inequality across countries (Acemoglu and Robinson, 2002;Bumann and Lensink, 2016;Sayed and Peng, 2021). FMM is a data-driven methodology that endogenously identifies clusters based on the similarity of the conditional distributions of income inequality and thus avoids the arbitrary choice of threshold problem encountered in previous studies (Ouédraogo, Sawadogo, R. and Sawadogo H., 2020;Wang and Lee, 2021). FMM allows us to capture varying effects of FDI on inequality across the clusters and hence enables us to investigate the question of whether the absorptive capacity of countries plays a prominent role in assigning the membership for countries where FDI has a favorable or adverse effect on inequality.…”

Section: Introductionmentioning

confidence: 99%

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Doğrudan Yabancı Yatırım-Gelir Eşitsizliği Bağlamı ve Özümseme Kapasitesinin Rolü: Bir Sonlu Karışım Model Yaklaşımı

SARSILMAZ

2023

Politik Ekonomik Kuram

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The income inequality-FDI nexus is ambiguous on theoretical grounds, as several opposing mechanisms relating FDI to inequality are put forward in the theoretical literature. Empirical studies also produce mixed results. It might suggest a heterogeneous response of income inequality to FDI inflows conditional on distinct characteristics in recipient countries. Although unobserved country-specific characteristics are considered by fixed or random effects modeling in panel regression applications, some studies incorporate observable country-specific factors such as absorptive capacity as a conditioning factor to explain the reasons for conflicting findings. Therefore, the existing studies employ threshold panel regression models that split the sample based on the outcome (supervised learning). Differently from the previous ones, this study takes a distinct empirical strategy by adopting a finite mixture model (FMM) as an unsupervised model-based clustering technique to scrutinize distributional heterogeneity in the linkage between FDI and income inequality. The study then questions the role of absorptive capacity as a conditioning factor with varying effects on the inequality of FDI. Our empirical results, based on panel data from 26 developing countries between 2004-2019, explain the varying effects of FDI on income inequality according to three different country clusters. FDI improves income inequality in the first cluster, while it does not significantly affect income inequality in the second and deteriorates income inequality in the third cluster. Furthermore, our empirical findings reveal that a country's high absorptive capacity, especially its high level of human capital, prevents the negative impact of FDI on income distribution.

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“…The study recommended that these countries should adopt policies to encourage foreign direct investment. Wang and Lee (2021) explored the relationship between FDI, inequality and nation risk for the period 1998 to 2014. This study developed a finite mixture model that takes nation risk into account.…”

Section: Literature Reviewmentioning

confidence: 99%

Assessing the role of information and communication technology in reducing the gap between rich and poor: the case of South Asia

Ahmad

Khan

Haq

2022

IJSE

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PurposeThe widening income gap between rich and poor has gained worldwide recognition in recent decades. This income gap between rich and poor is defined as the extent of income unevenly distributed in a host country. This study provides an empirical view of the association between information and communication technology and the widening of the income gap.Design/methodology/approachThe study used panel data from 2005 to 2019. To detect unit root issues, Levin and Lin (LL) and Im, Pesaran and Shin (IPS) tests were first employed. The pooled mean group and mean group estimators were employed to investigate the short and long -term impact of information and communication technology and other control factors on reducing the gap between rich and poor in South Asia.FindingsThe results showed that the Pooled mean group's findings are more efficient and consistent as compared to mean group estimators. The results of the paper showed that the greater penetration of information and communication technologies in the economy negatively and significantly affects income inequality. Moreover, the information and communication technology, foreign remittances and foreign direct investment (FDI) significantly reduce the gap between rich and poor in the long run.Practical implicationsAt last, the findings of the study serve as an excellent roadmap for policymakers seeking to address the issue of growing income inequality in the South Asian regions and worldwide.Originality/valueBased on the findings of this study, South Asia can reduce the gap between rich and poor by investing more in the information and communication technology sector.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2021-0638

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Foreign direct investment, income inequality and country risk

Cited by 18 publications

References 60 publications

The Mediating Effects of Green Innovation and Corporate Social Responsibility on the Link between Transformational Leadership and Performance: An Examination Using SEM Analysis

The Mediating Effects of Green Innovation and Corporate Social Responsibility on the Link between Transformational Leadership and Performance: An Examination Using SEM Analysis

Doğrudan Yabancı Yatırım-Gelir Eşitsizliği Bağlamı ve Özümseme Kapasitesinin Rolü: Bir Sonlu Karışım Model Yaklaşımı

Assessing the role of information and communication technology in reducing the gap between rich and poor: the case of South Asia

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