Governance infrastructure and FDI flows in developing countries

Ross, Andrew

doi:10.1080/19186444.2019.1640572

Cited by 38 publications

(27 citation statements)

References 39 publications

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“…Kolstad & Wiig (2009) also argued that transparency is the most significant component to improve the governance environment and reduce corruption. Furthermore, the current findings also support the evidence presented by Ross (2019) that ease of governance has a significant favorable impact on FDI productivity development, expenditure, industrial production, and economic growth in 122 nations. Also, Cardenas et al (2017) demonstrated that effective governance promotes infrastructure development to some extent when they investigated the relationship between governance and infrastructure in the context of low and middle-income countries.…”

Section: Resultssupporting

confidence: 88%

Building Critical Infrastructures: Evaluating the Roles of Governance and Institutions in Infrastructural Developments in Sub-Sahara African Countries

2022

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Background The Sub-Saharan African (SSA) region has notably been in the limelight of infrastructural deficit discussions over the decades. Although the region’s infrastructural development is gradually improving, the levels and pace of development remain generally poor compared to the rest of the world. Objectives This study thus aims to empirically examine the roles of governance and institutions in infrastructural developments in the Sub-Sahara African (SSA) region toward addressing the pressing needs for critical infrastructures for the region. Research Designs The empirical strategies utilized in the study include the Common Correlated Efficient Mean Group (CCEMG) and Dynamic CCEMG methods among others. These empirical approaches were applied to analyze data on governance and institutional quality proxies for the SSA region to achieve the study’s objectives while controlling for the effects of industrial value-added, foreign capital inflow (FDI), and overall economic growth for the understudied period (1990–2019). Results The results reflect the essence of governance and institutional quality as these variables significantly boost infrastructural development in SSA. In addition, industrialization and growth also show a favorable impact on the development of infrastructure thus reflecting that the transition from agrarian to industrial economies occurs in parallel with infrastructure development in the SSA. However, FDI inflows were not found to be significantly instrumental to infrastructural development in the region. Conclusions Hence, the SSA must strive to strengthen institutions and harmonize their industrial and economic push with infrastructural developments while encouraging potential foreign investors to diversify investments to infrastructural projects beyond the usual primary sector/resource-based activities.

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Section: Resultssupporting

confidence: 88%

Building Critical Infrastructures: Evaluating the Roles of Governance and Institutions in Infrastructural Developments in Sub-Sahara African Countries

2022

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“…Similarly, political stability and regulatory quality had a positive impact on FDI inflows, while corruption, absence of governance effectiveness and rule of law had a negative influence (Shah and Samdani, 2015). This is in line with the study of 122 developing countries from 2002 to 2017 that revealed that governance effectiveness and regulatory quality were essential factors in attracting FDI inflows (Ross, 2019). In addition, political stability had a significant positive effect in the case of developing countries (Baek and Qian, 2011;Zheng, 2011), while in the case of emerging countries, control of corruption has had a positive and significant effect on inward FDI (Mathur and Singh, 2013).…”

Section: Linkages Between Good Governance and Fdi Inflowssupporting

confidence: 79%

Increasing Profitability of the Halal Cosmetics Industry using Configuration Modelling based on Indonesian and Malaysian Markets

Dalir¹,

Al-Ansi²,

Rahim³

et al. 2020

J Korea Trade

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Purpose -This paper examines how differently output and input tariffs affect domestic employment across industrial characteristics of comparative advantage such as labor quality and capital intensity. Design/methodology -The paper focuses on 453 Korean industries from 2007 to 2014 because Korea is a typical example of a natural resource-scarce open economy and experienced the transition of the export pattern from labor intensity to technology intensity during this period. Findings -The results show that input tariff reduction stimulated total employment, focusing on the early 2010s, while the effects of output tariff reduction were statistically insignificant in general. However, the stimulation effects of output tariff reduction on employment were found in comparative advantage industries with greater labor quality and capital intensity. As for input tariff reduction, its stimulation effects on employment were more prominent in comparative disadvantage industries with lower labor quality and capital intensity. Originality/value -These results provide significant implications for natural resource-scarce open economies which are experiencing the transition of the export pattern from labor intensity to technology intensity and the unequal distribution of income after trade liberalization: imported intermediate inputs has become increasing important, leading to trade effects on employment and alleviation of income inequality.

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“…Besides, Non-financial direct investment by Chinese companies also mainly flows to Asian countries, where more than half of the industrial parks along the “Belt and Road” are concentrated. However, in OFDI, firms will be affected by the host country governance [ 4 ]. There are numerous cases where poor governance reduces the investment confidence of Chinese overseas companies, e.g.…”

Section: Introductionmentioning

confidence: 99%

Governance, financial development and China’s outward foreign direct investment

Gao

Wen²,

Yang³

2022

PLoS ONE

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Deeply investigating the relationship between governance, financial development, and outward foreign direct investment (OFDI) is beneficial to formulating effective policies to accelerate Chinese firms’ pace of overseas expansion. Based on the theoretical mechanism analysis, this paper empirically analyzes the impact of Asian governance and financial development on China’s OFDI using the panel data of 37 Asian countries from 2003 to 2017. The results show that the host country governance has a negative and statistically significant impact on China’s direct investment in Asia. The conclusion remains valid even after overcoming the interference of endogenous and economic cycle fluctuations. Moreover, using the mediating effect model, we find that financial development is an important channel through which host country governance affects China’s OFDI. In further discussion, the findings suggest that with the scale of OFDI expanding, the role of governance takes an inverted "U" shape, and the "Belt and Road" initiative (BRI) weakens the negative impact of governance quality on China’s OFDI. Furthermore, governance has shown more remarkable restraint on China’s OFDI in neighboring, coastal, and low-income countries in the heterogeneity test. From the perspective of host country governance, this paper provides more specific guidance to formulate China’s direct investment policy in Asia.

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Governance infrastructure and FDI flows in developing countries

Cited by 38 publications

References 39 publications

Building Critical Infrastructures: Evaluating the Roles of Governance and Institutions in Infrastructural Developments in Sub-Sahara African Countries

Building Critical Infrastructures: Evaluating the Roles of Governance and Institutions in Infrastructural Developments in Sub-Sahara African Countries

Increasing Profitability of the Halal Cosmetics Industry using Configuration Modelling based on Indonesian and Malaysian Markets

Governance, financial development and China’s outward foreign direct investment

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