The impact of foreign direct investment, foreign aid and trade on poverty reduction: Evidence from Sub-Saharan African countries

Anetor, Friday Osemenshan; Esho, Ebes; Verhoef, Grietjie

doi:10.1080/23322039.2020.1737347

Cited by 77 publications

(47 citation statements)

References 62 publications

(118 reference statements)

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“…It suggests that FDI inflow in the country does not have the potential of reducing poverty; rather, it increases it over the short and long period of time. This negative impact of FDI inflows though contrary to a priori expectation of study and the studies of Fowowe and Shuaibu (2014) and Ahmad et al (2019), it is however consistent with the findings of Huang et al (2010), Ali et al (2010), andAnetor et al (2020) that FDI inflows led to an increase in poverty levels, which in this study is through reduction in per capita expenditure. A possible explanation for this is the noncomplementary nature of FDI with domestic firm (De Mello 1999), near absolute crowding out of domestic investment by foreign investment and high level of advanced technology employed by foreign firms, such that employment generation that could stimulate consumption expenditure is impeded (Calvo and Hernandez 2006;Magomgeyi and Odhiambo 2018).…”

Section: Ardl Long-run and Ecm Estimation Resultssupporting

confidence: 90%

Effectiveness of fiscal federalism for poverty reduction in Nigeria: an analysis of federal and state governments’ expenditures

Samuel

Sanusi²

2021

SN Bus Econ

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One of the sustained political and economic strategies that have been adopted by various countries over 3 decades to achieve the desired level of development is fiscal federalism. Through this economic development strategy, various levels of government within an economy have been involved in the pursuit of reducing poverty overtime. The purpose of this study is to examine the relationship between government expenditure on poverty reduction with respect to federal and state government expenditures, respectively. The study employed the auto-regressive distributed lag (ARDL) estimation technique to establish long-run relationship, and to examine the magnitude of the effect of federal and state government expenditures in both the short-run and long-run periods using time-series data for the period 1981-2018. Results obtained indicate that only state government expenditure has positive effect on poverty reduction in Nigeria. The findings of this study, therefore, support the need for greater decentralization and increase in fiscal expenditure responsibilities and strengthening revenue capability in favor of state governments, giving that achieving desired poverty reduction could be achieved through increased state government spending on developmental projects.

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Section: Ardl Long-run and Ecm Estimation Resultssupporting

confidence: 90%

Effectiveness of fiscal federalism for poverty reduction in Nigeria: an analysis of federal and state governments’ expenditures

Samuel

Sanusi²

2021

SN Bus Econ

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“…This is in line with the results finding by [ 26 , 52 , 68 ]. Similarly, we see the benefit of foreign aid received and the remittances in the region and supported by the studies [ 2 , 6 , 49 , 60 ]. In poor countries in the MENA region, we see more poverty gap and headcount ratio, highlighting the fact that the non-poor countries did a great job in reducing inequality and poverty in the region.…”

Section: Resultssupporting

confidence: 85%

“…Although a positive influence was suggested of foreign aid on poverty reduction, the impact was found out to be insignificant. [ 49 ] analyzed the impact of foreign direct investment, trade, and foreign aid on poverty alleviation for Sub-Saharan African (SSA) countries. The study used data from 1990–2017 and employed the Feasible Generalised Least Square (FGLS) technique.…”

Section: Nexus Between Different Macroeconomic Indicatorsmentioning

confidence: 99%

How foreign aid and remittances affect poverty in MENA countries?

et al. 2022

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Foreign aid and remittances augment the income of economies. The present study examines the relationship between economic growth, poverty, inequality, remittances, and foreign aid in the Middle East and North Africa (MENA) countries using panel data methods from 1991 to 2019. The study focuses on the MENA region due to the rise in labor immigration and significant foreign aid. The empirical findings reveal that remittances, foreign aid, and economic growth play a significant role in bringing down the MENA region’s poverty levels. Besides, a rise in income share accruing to the lowest quintile is observed despite the negative income growth, which indicates that on average, the income increased more rapidly of the poor in comparison to the non-poor households. Thus, the study finds evidence supporting the hypothesis that remittances and foreign aid augment per capita income and income share in the MENA member countries.

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“…Dhrifi et al (2020) show the poverty-reducing effect of FDI in a sample of 98 developing economies from 1995 to 2017. Anetor et al (2020) explored the impact of trade and FDI on poverty using panel data of 29 Sub-Saharan economies from 1990 to 2017. Their findings suggest that FDI has a negative impact on poverty reduction while trade has a positive impact on poverty reduction.…”

Section: Theoretical Links Of Globalization and Povertymentioning

confidence: 99%

An Empirical Analysis of Globalization-Poverty Nexus: Evidence from Pakistan

Majeed

Farooq

2021

READS

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Despite the significant progress that has been observed towards the Millennium goals, more than one billion people still live on less than 1.25 US dollars per day. A large body of the literature has focused on the growth effects of globalization and generally documents favourable effects of globalizing on economic growth. Does globalization reduce poverty? This question has received relatively less attention and the available evidence is not conclusive. This study investigates the impact of globalization on poverty in Pakistan using annual time series data from 1975 to 2018. The empirical analysis for the effect of globalization on poverty is based on the ARDL approach to cointegration. The empirical findings show that globalization exerts a significant adverse influence on the annual poverty of Pakistan. It implies that the ongoing process of globalization is leaving the poor of Pakistan behind. Globalization accentuates not ameliorates poverty and thus marginalizes the poor of Pakistan.

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The impact of foreign direct investment, foreign aid and trade on poverty reduction: Evidence from Sub-Saharan African countries

Cited by 77 publications

References 62 publications

Effectiveness of fiscal federalism for poverty reduction in Nigeria: an analysis of federal and state governments’ expenditures

Effectiveness of fiscal federalism for poverty reduction in Nigeria: an analysis of federal and state governments’ expenditures

How foreign aid and remittances affect poverty in MENA countries?

An Empirical Analysis of Globalization-Poverty Nexus: Evidence from Pakistan

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