66 research outputs found
Multilateral Trade Liberalisation and FDI: An Analytical Framework for the Implications for Trading Blocs
Get PDFThe proliferation of regional integration agreements (RIAs) over the past several years has led to significant changes in the global configuration of trade and investment activity. Multinational enterprises now face the prospect of multilateral trade liberalisation that could significantly affect the foreign direct investment (FDI) incentive structures that were established within the range of current RIAs. RIAs that provide preferential market access to member countries modify firms’ incentives to undertake FDI activities and can lead to various permutations of trade and investment creation and diversion. This article provides an analytical framework for understanding the implications of multilateral trade liberalisation for the incentive structures of firms to conduct FDI and discusses how multilateral liberalisation could undo many of the FDI activities that were initiated in response to previous RIAs.foreign direct investment, incentives, multilateral trade liberalisation, regional integration agreements, Demand and Price Analysis, Financial Economics, International Relations/Trade, Political Economy,
Inflows of foreign direct investment to ECOWAS countries: an empirical analysis
No full textThe importance of Foreign Direct Investment (FDI) for economic growth and development is much discussed in the economic growth and development literature. Inward FDI provides a source of capital for host countries, and it is particularly beneficial for developing countries through knowledge spillover, advanced technology transfers, and employment creation. The Economic Community of West African States (ECOWAS) is one of the main regional trade blocs in Sub-Saharan Africa (SSA), and it is primarily distinguished by having the greatest levels of FDI inflows among geo-economic regions in SSA. While there have been general increases in inward FDI over time, there remain various economic and political challenges and broad potentials to stimulate inward FDI to the ECOWAS region. This thesis investigates the determinants of FDI inflows to ECOWAS countries using panel dataset covering various countries and spanning from 2001 to 2019. The empirical research particularly focuses on the effects of trade openness and economic growth, among other factors, on FDI inflows to the ECOWAS region. Pooled Ordinary Least Squares (OLS), panel data random effect, and panel data fixed effect estimators are used to implement the regressions, and various empirical equations are specified. The empirical analysis initially executes the regressions for a sub-dataset that exclusively covers ECOWAS countries. Then, the empirical analysis is implemented for a broad dataset that covers a range of developed and developing countries to benefit from variations in the dataset. The main empirical results show important positive effects of trade openness on FDI inflows to the ECOWAS region. It also shows positive effects of economic growth, economic development, and infrastructure on FDI inflows to the ECOWAS region. These findings highlight the particular significance of trade openness and economic growth policies in stimulating FDI inflows to the ECOWAS region. Also, ECOWAS countries should adopt policies to achieve higher levels of economic development that is accompanied with improvement in economic and financial institutions, increases in human capital, and more developed infrastructure.
Determinants of international peace : an empirical analysis
Get PDFThis thesis examines the direct implications of political, economic, and socio-economic determinants of peace on the global peace level using a panel dataset covering 162 countries over the time period 2007-2016. The empirical analysis is carried out through different empirical specifications and econometric strategies. The benchmark empirical results suggest that countries with higher economic development levels, education, trade openness, and those that enjoy a democratic political system are expected to be more peaceful. On the other hand, countries endowed with natural resources are expected to be less peaceful, which supports the resource curse hypothesis. Supplementary empirical results show that the effects of some peace determinants (GDP per capita, trade openness, and democratic freedom) did not significantly change across the whole-time period 2007-2016, unlike other peace determinants such as primary education and natural resources which exhibited different significance levels over different time intervals. Other supplementary empirical results indicate that the effects of peace determinants on GPI’s (Global Peace Index) sub-components are mostly consistent with their effects on GPI itself. Results from alternative empirical specifications indicate that the presence of a democratic political system would increase the positive effects of economic development on peace levels, reduce the negative effects of natural resource endowment on nations’ peace levels, and that a larger natural resource endowment has a higher effect on increasing peace levels in rich nations compared to poor nations. Finally, the empirical analysis shows that regional alliances do indeed improve nations’ peace levels and that their effects on peace vary greatly across different geo-economic regions
The effects of democracy on National GDP per Capita: an empirical investigation
Get PDFThe growth democracy question has been a subject of fundamental debate for the last few decades. Political regimes seem have been evidently shaping the economic performance, by greatly affecting regulations, enhancing accountability and transparency mechanisms, promoting the well-being of the whole population, and achieving satisfactory performance for the upcoming elections. Hence, this thesis examines the role of democracy in economic growth, by examining its effects on national Gross Domestic Product per Capita (GDPC). It utilizes a novel dataset which includes several democracy variables, such as Representative Government, Fundamental Rights, Checks on Government, and Impartial Administration. We find that the impact of democracy on GDPC is positive and significant. These results come in contrast to lower democracy levels in many emerging markets with relatively high economic growth rates. Finally, the empirical evidence points out that well-established democratic institutions provide economic stability, and they have positive effects on GDPC
Women in Transition: The Dynamic Effects of Inward FDI on Female Employment in the Economy and Across Sectors
No full textThis paper examines the effects of inward Foreign Direct Investment (FDI) on the female employment rate in the economy and the share of female employment across sectors. The empirical analysis is implemented through the Generalized Method of Moments (GMM) System estimator for dynamic panel models using different empirical specifications and FDI openness indicators. The main results show that the overall effects of inward FDI on the national female employment rate are not statistically significant. However, they reveal that inward FDI has promoted the share of female employment in the service sector and has led to decreases in the share of female employment in agriculture. The FDI effects on the share of female employment in the industrial sector are found to be statistically insignificant. These results are generally supported when running the empirical analysis through alternative FDI openness indicators. Also, supplementary analysis reveals some variations in the magnitude of these effects over different national income categories. The findings in this paper emphasize FDI’s gendered influences in the labour market. They are consistent with the prevalence of macroeconomic channels through which inward FDI impacts female employment across sectors, and they encompass the underlying implications of various counteracting microeconomic factors
The effects of economic freedom on inflows of foreign direct investment
Get PDFThis thesis examines the implications of Economic Freedom (EF) for FDI inflows using the overall EF index developed by the Fraser Institute and covering the sub-components of EF including Legal System and Security of Property Rights, Access to Sound Money, Freedom to Trade Internationally, Regulation, and Size of Government. The empirical analysis is carried out through different empirical specifications and econometric strategies. The benchmark empirical results suggest that improvements in the levels of EF and in the levels of the sub-components of EF lead to increases in FDI inflows. Supplementary empirical results show that EF and the sub-components of EF do not have statistically significant implications for the effect of Domestic Investment (DI) on FDI inflows. Also, they reveal non-linear relationships between EF and FDI inflows, as well as between the sub-components of EF and FDI inflows. Finally, the empirical analysis shows that the implications of EF for FDI inflows exhibit variations across geo-economic regions
Impact of foreign direct investment on domestic investment : evidence from Sub-Saharan Africa
Get PDFThis study examines the impact of Foreign Direct Investment (FDI) on domestic investment for 36 countries in Sub-Saharan Africa (SSA) over the time period 1980–2014, and over two time sub-periods, 1980–1994 and 1995–2014. We investigate whether increased efforts in SSA to attract more FDI have resulted in positive implications of FDI on domestic investment over the years. Our results from the System Generalized Method of Moments (SYS-GMM) estimations suggest that FDI inflows have led to crowding-in of domestic investment for the total time period, and particularly in the second time sub-period. Next, we examine whether the positive effect of FDI on domestic investment occurs in the case of smaller regional groups in SSA. Therefore, we implement the empirical analysis for five selected Regional Economic Communities (RECs) in SSA, covering: Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), Economic Community of Central African States (ECCAS), Economic Community of West African States (ECOWAS), and Southern African Development Community (SADC). The results generally show positive impacts of FDI on domestic investment across these RECs, which are consistent with the results obtained for the full sample. We find significant positive effects for COMESA in the first time period, and for ECCAS, ECOWAS, and SADC in the second time period. We extend the empirical analysis by investigating the role played by three development variables (financial development, human capital, and export sector development) in the effect of FDI on domestic investment in SSA. The results show that financial development and human capital tend to lessen the crowding-in effect of FDI on domestic investment in SSA, and could eventually lead to a crowding-out of domestic investment after a certain threshold. In contrast, the results indicate that export sector development tend to augment the crowding-in effect of FDI on domestic investment in SSA.
A gravity analysis of bilateral trade among ECOWAS member countries.
Get PDFThe Economic Community of West African States (ECOWAS) is one of the most prominent RTAs in Sub-Saharan Africa (SSA). The main objective of ECOWAS is to boost the economic development of member countries, reduce/eliminate trade barriers, and enhance the free movement of capital and labor among ECOWAS member countries. The ECOWAS is deemed to have important regional economic impacts on member countries, and there are important prospects to increase the effectiveness of this agreement in the future. Thus, it is important to empirically examine the magnitude of bilateral trade flows among ECOWAS member countries and to determine to what extent these trade preferences have enhanced trade flows among ECOWAS member countries. The main objective of this thesis is to examine the impact of ECOWAS on bilateral trade flows among member countries using a dataset covering bilateral trade observations among the 15 ECOWAS countries, and between ECOWAS member countries and other (non-ECOWAS) trading partners from 2000 to 2018. The empirical analysis is extended to examine the magnitude of trade flows among members of the West African Economic and Monetary Union (WAEMU), and among members of the West African Monetary Zone (WAMZ). The empirical analysis uses the conventional log-linear form of the gravity equation, and it also estimates the multiplicative form of the gravity equation using the PPML The results show positive and statistically significant coefficients on the ECOWAS binary variable, implying higher magnitudes of trade flows among ECOWAS member countries. They also show a higher magnitude of trade among WAEMU countries relative to trade among other ECOWAS members, implying that WAEMU countries have benefitted from increases in economic cooperation and coordination and the introduction of the common currency, the CFA Franc, in increasing trade among each other. They also show lower magnitudes of trade among WAMZ countries relative to trade among other ECOWAS member countries, suggesting that there is a wide margin to increase trade among WAMZ countries by increasing economic cooperation and coordination, and by introducing the common currency (ECO). Finally, regional trade flows among ECOWAS member countries could increase further by eliminating/reducing remaining trade barriers, improving infrastructure and institutions, boosting political stability, and increasing economic and political cooperation and coordination among ECOWAS member countries
Trade flows between SAFTA member countries: an empirical analysis
Get PDFThe South Asian Free Trade Agreement (SAFTA) of the SAARC is the principal regional trade agreement in South Asia. This thesis empirically examines bilateral trade flows between SAFTA member countries. The empirical analysis is executed using the gravity model to estimate the relative magnitude of bilateral trade flows between SAFTA member countries. A panel dataset presenting bilateral trade flows among SAFTA member countries and between SAFTA countries and non-SAFTA countries is used. The empirical gravity equations are estimated in the log-linear forms and estimated in multiplicative forms using the PPML estimation method. The results show that the magnitudes of trade flows among SAFTA member countries significantly fall below the magnitudes of trade flows between SAFTA and non-SAFTA member countries, ceteris paribus. They indicate that SAFTA member countries should adopt policies to reduce the significance of para-tariffs, sensitive items list, and to improve bilateral infrastructure and business networks, and settle conflicts
Did the Uruguay Round Agreement on Agriculture Affect Trade Flows? An Empirical Investigation for Meat Commodities
No full textAgricultural trade, Dynamic panel estimation, Market access, Meat commodities, Uruguay round agreement on agriculture, F14, F15,
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