Effect of Poverty on Real Exchange Rate in Developing Countries

Gnangnon, Sèna Kimm

doi:10.21203/rs.3.rs-77155/v1

Cited by 4 publications

(4 citation statements)

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“…Countries with relatively high real per capita income experience a real exchange rate depreciation effect of poverty. On the contrary, in countries with low real per capita income, poverty is associated with an appreciation of the real exchange rate (Gnangnon, 2020 Data And Methodology…”

Section: Omodero Et Al (mentioning

confidence: 99%

Examining the asymmetric relationship between the national development plan and poverty reduction in Nigeria: Quantile analysis from 1980-2019

Zaria

2022

Preprint

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Employing quantile regression to examine the foreign assistance for development, external debt as in stock and real effective exchange rate means a consumer basket of goods and services average effect on poverty reduction in Nigeria. The result reveals the existence of an average short, medium and long term symmetric relationship. At the same time, foreign debt has a negative and significant average effect on poverty reduction in the short term. Also, shows a positive average but insignificant relationship in the short and long term. It implies the national development plan for poverty reduction is insignificant due to corruption and erratic inflation fluctuations.

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Section: Omodero Et Al (mentioning

confidence: 99%

Examining the asymmetric relationship between the national development plan and poverty reduction in Nigeria: Quantile analysis from 1980-2019

Zaria

2022

Preprint

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“…In so doing, it intends to complement the existing few studies on the macroeconomic effects of poverty. These studies include for example, the effect of poverty on human capital (e.g., Azariadis and Stachurski, 2005;Bain et al 2013;Haushofer and Fehr, 2014;Perkins et al, 2012), economic growth (e.g., Bagchi and Svejnar, 2015;Breunig and Majeed, 2020;López and Servén, 2015;Ravallion, 2012), economic development (e.g., Mehanna, 2004;Nakabashi, 2018), trade openness (Gnangnon, 2019a), export product diversification (Gnangnon, 2019b), real exchange rate (Gnangnon, 2020a), tax revenue (Gnangnon, 2020b), and services export diversification (Gnangnon, 2020c).…”

Section: Introductionmentioning

confidence: 99%

Does poverty deter foreign direct investment flows to developing countries?

Gnangnon

2022

IJEPS

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The present paper investigates the effect of poverty on foreign direct investment (FDI) inflows in developing countries. It complements the important extant literature on the effect of FDI inflows on poverty by examining the issue the other way around. The analysis is conducted using a sample of 117 countries over the period 1980-2017, and the two-step system Generalized Methods of Moments (GMM) technique. It has relied on two indicators of poverty, namely poverty headcount ratio and poverty gap. Findings indicate that over the full sample, poverty influences negatively FDI inflows, including through its adverse effect on human capital (that is, both education and health). Unsurprisingly, low-income countries (considered as poorest countries in the full sample) experience a higher negative effect of poverty on FDI inflows than other countries. On another note, participation in international trade matters for the effect of poverty on FDI inflows. In fact, an increase in poverty levels results in lower FDI inflows in countries that experience low workers' productivity, a less developed financial sector, and a low level of infrastructure development. Furthermore, the effect of poverty on FDI inflows does not depend on the prevailing economic growth rate. Finally, the analysis has revealed the existence of a non-linear effect of poverty on FDI inflows for the poverty headcount indicator, but not for the poverty gap indicator. The nonlinear effect of poverty headcount on FDI inflows is such that a rise in poverty headcount ratio results in lower FDI inflows, but an additional increase to poverty more than further discourages FDI inflows. The conclusion discusses the implications of these findings.

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Section: Introductionmentioning

confidence: 99%

Does Poverty deter Foreign Direct Investment flows to Developing Countries?

Sk¹

2020

Preprint

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The present paper investigates the effect of poverty on foreign direct investment (FDI) inflows in developing countries. It complements the important extant literature on the effect of FDI inflows on poverty by examining the issue the other way around. The analysis is conducted using a sample of 117 countries over the period 1980-2017, and the two-step system Generalized Methods of Moments (GMM) technique. It has relied on two indicators of poverty, namely poverty headcount ratio and poverty gap. Findings indicate that over the full sample, poverty influences negatively FDI inflows, including through its adverse effect on human capital (that is, both education and health). Unsurprisingly, low-income countries (considered as poorest countries in the full sample) experience a higher negative effect of poverty on FDI inflows than other countries. On another note, participation in international trade matters for the effect of poverty on FDI inflows. In fact, an increase in poverty levels results in lower FDI inflows in countries that experience low workers' productivity, a less developed financial sector, and a low level of infrastructure development. Furthermore, the effect of poverty on FDI inflows does not depend on the prevailing economic growth rate. Finally, the analysis has revealed the existence of a non-linear effect of poverty on FDI inflows for the poverty headcount indicator, but not for the poverty gap indicator. The non-linear effect of poverty headcount on FDI inflows is such that a rise in poverty headcount ratio results in lower FDI inflows, but an additional increase in poverty more than further discourages FDI inflows. The conclusion discusses the implications of these findings.

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Effect of Poverty on Real Exchange Rate in Developing Countries

Cited by 4 publications

References 75 publications

Examining the asymmetric relationship between the national development plan and poverty reduction in Nigeria: Quantile analysis from 1980-2019

Examining the asymmetric relationship between the national development plan and poverty reduction in Nigeria: Quantile analysis from 1980-2019

Does poverty deter foreign direct investment flows to developing countries?

Does Poverty deter Foreign Direct Investment flows to Developing Countries?

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