Foreign Direct Investment And Poverty Reduction

Magombeyi, Mercy T; Odhiambo, Nicholas M.

doi:10.1515/cer-2017-0013

Cited by 32 publications

(43 citation statements)

References 25 publications

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“…Furthermore, the results validate a few prior assumptions that FDI has substantial impacts on poverty reduction in emerging countries such as the Western Balkan region as compared to wealthier countries like the central European region. Magombeyi and Odhiambo (2017) present a comprehensive survey of the literature on the impact of FDI and poverty reduction. The study outlines the empirical and theoretical relationship between FDI and poverty reduction.…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

Direct impact of inflow of foreign direct investment on poverty reduction in Pakistan: a bonds testing approach

Khan

Xie

Saleem

2019

Economic Research-Ekonomska Istraživanja

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This empirical study examines the relationship between foreign direct investment (FDI) and poverty reduction using some control variables in the context of Pakistan. The time-series data has been used to cover the period 1985-2016. The study found robust results of co-integration between FDI and poverty reduction in the long-run analysis. Moreover, to find the correlation between FDI and poverty reduction, this study used autoregressive distributed lag (ARDL) technique to check the co-integration between FDI and poverty. The short-run and long-run analysis results indicate that FDI, the mobile phone users (per 100 inhabitants), life expectancy, and government expenditure contributes to poverty reduction. The results of variance decomposition method showed that bidirectional causality found between FDI and poverty reduction or both are Granger cause of each other. The ratio of inflow of FDI is not too high in Pakistan, so government with scared financial resources should improve the policies regarding FDI inflow. This analysis suggests policymakers divert their attention towards the betterment of institutions, establish FDI attractive inflow trading zones like other emerging economies. ARTICLE HISTORY

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Section: Empirical Literature Reviewmentioning

confidence: 99%

Direct impact of inflow of foreign direct investment on poverty reduction in Pakistan: a bonds testing approach

Khan

Xie

Saleem

2019

Economic Research-Ekonomska Istraživanja

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“…While substantial research has thoughtfully investigated the effects of FDI on economic growth in developing countries, the conclusion surrounding the relationship between FDI and poverty reduction remains open to question. The arguments regarding the role of FDI and poverty used here build on studies of Andrew (2004) and Magombeyi and Odhiambo (2017). The researchers provide surveys of the relevant literature and consider both the positive and negative impacts of FDI to the poor -indirectly by growth-enhancing effects, and directly by distributional effects.…”

Section: The Role Of Fdi In Poverty Reductionmentioning

confidence: 99%

Distributional effects of foreign direct investment on poverty: the case of Vietnam

Ngo

2019

IJTGM

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In this paper, we examine the impacts of foreign direct investment (FDI) on poverty reduction in Vietnam. The influences of FDI on the poor can be categorised into two types -growth-enhancing effects and distributional effects. This empirical study analyses the two effects through a sub-national data of 63 provinces and three regions of Vietnam from 2005 to 2015, using Driscoll-Kraay regression and the Sobel-Goodman mediation bootstrapping test. We measure the role of FDI as a synthetic contribution of FDI capital inflow, FDI productivity, and FDI labour creation. Results of this analysis suggest that FDI could reduce poverty throughout these regions of Vietnam since it stimulates productivity and job creation with foreign enterprises. Government bodies, therefore, need to prioritise the regulation of FDI enterprises over calling for FDI inflow at both the national and provincial levels. Additionally, differences in FDI distributions exist between Northern, Central, and Southern Vietnam.

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“…Wang and Wong (2012) posit that technological transfer from one country to another is possible through the instrument of FDI. The transfer of technology into different sectors of economy through FDI has enabled some developing and emerging economies to achieve sustained economic growth and development in the recent time (see Nunnenkamp, 2004;Gohou, and Soumare, 2012;Anyanwu, 2017;and Magombeyi and Odhiambo, 2017).…”

Section: Introductionmentioning

confidence: 99%

“…This study identifies four gaps in the literature in which it contributes to fill. First, previous studies have centred mainly on either FDI-economic growth link (Akinlo, 2004;Alfaro, 2003& Alfaro, et al 2004Durham, 2004;Viu and Noy, 2009;Azman-Saini, et al 2010;Choong et al 2010;Balloumi 2014;Iamsiraroj, 2016), or FDI-poverty link (Jalilian and Weisis, 2002;Basu and Guariglia, 2007;Loayza and Raddata, 2010;Gohou and Soumane, 2012;Wu and Hsu, 2012;Magombeyi and Odhiambo, 2017) or growth-poverty link (Schneider and Gugarthy (2011). However, little or no study has explored the three links simultaneously despite the need for a comprehensive analysis (taking account of the direct and indirect impacts of FDI on output growth and welfare) 3 for evidence-based policy making.…”

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confidence: 99%

The Effects of Foreign Direct Investment (FDI) on Sectoral Growth and Poverty in Africa

Chukwu

Adewuyi

2020

Preprint

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Background This study examines the effects of foreign direct investment (FDI) on sectoral growth and poverty reduction in Africa. The transfer of technology into different sectors of economy through FDI has enabled many developing and emerging economies to achieve sustained economic growth and development. However, this is not the case with Africa’s growth architecture and poverty levels. A look at the region’s growth and welfare structure revealed that the FDI-growth-welfare relationship is weak when compared with those of other developing continents such as Asia and Latin America. Methods The study adopted recent causality method and simultaneous equation as well as dynamic threshold models to analyze the effect of FDI on sectoral growth and poverty. We accounted for sectoral spillover effect, heterogeneity, simultaneity and cross section dependence in our modeling. Results Main findings from our results suggest that FDI promotes outputs of manufacturing and service sectors, but hinders that of agricultural sector, while it fosters human development. Also, the results showed that, while human development promotes output of the agricultural sector, it deters output of manufacturing and service sectors. Further results revealed that only agricultural output improves human development and welfare among countries. The dynamic threshold regression analysis showed that FDI promotes output growth in all sectors with larger effect at levels beyond the optimal HDI. Conclusions Africa’s growth architecture is weak to stimulate poverty reduction. For the region to improve its sectoral output growth and welfare using the FDI as a catalyst, a policy framework towards attracting more FDI into the three key productive sectors (especially in the manufacturing and services) is desirable for increased output and poverty reduction. However, to achieve the desired level of poverty reduction, policies should be targeted to sectors with inter-sectoral linkages especially between agricultural and manufacturing sectors along the local and international value chain.

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Foreign Direct Investment And Poverty Reduction

Cited by 32 publications

References 25 publications

Direct impact of inflow of foreign direct investment on poverty reduction in Pakistan: a bonds testing approach

Direct impact of inflow of foreign direct investment on poverty reduction in Pakistan: a bonds testing approach

Distributional effects of foreign direct investment on poverty: the case of Vietnam

The Effects of Foreign Direct Investment (FDI) on Sectoral Growth and Poverty in Africa

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