Effects of Foreign Direct Investment on Inclusive Growth and Employment

This dissertation studies the effects of foreign direct investment (FDI) on inclusive growth and employment. The first chapter examines the conditions under which FDI can effectively lead to inclusive growth. By using a fixed effects regression with annual data for 67 countries from 1990 to 2015, we find that FDI has a positive effect on inclusive growth when there is a sufficiently large manufacturing sector and infrastructure base in the host country. We also indirectly find that FDI has a positive effect on inclusive growth when the host country has a large service sector. These not very optimistic results emphasize the critical importance of the host country’s absorptive capacity. A smaller technological or knowledge gap with the foreign firms is required for FDI to lead to more linkages and spillovers, and ultimately job creation for the poor. The second chapter looks at the effect of manufacturing FDI on manufacturing employment in Sub-Saharan African countries, by using annual data for 16 manufacturing industry sectors in 15 SSA countries from 2003 to 2018. In the first analysis, we find that manufacturing FDI has a positive effect on manufacturing employment at the industry sector level. In the second analysis, we look at how the effect of manufacturing FDI on manufacturing employment differs by groups of industry sectors. The results show that the effect of manufacturing FDI on employment creation varies by industry sector groups; automotive related industries create the most, followed by business machines/electronics related industries, and lastly metals/minerals related industries. The result reflects both direct and indirect employment effects via spillovers and forward and backward linkages

Human Development Report 2013 - The Rise of the South: Human Progress in a Diverse World

The 2013 Human Development Report -- "The Rise of the South: Human Progress in a Diverse World" -- examines the profound shift in global dynamics driven by the fast-rising new powers of the developing world and its long-term implications for human development.China has already overtaken Japan as the worlds second biggest economy while lifting hundreds of millions of its people out of poverty. India is reshaping its future with new entrepreneurial creativity and social policy innovation. Brazil is lifting its living standards through expanding international relationships and antipoverty programs that are emulated worldwide.But the "Rise of the South" analyzed in the Report is a much larger phenomenon: Turkey, Mexico, Thailand, South Africa, Indonesia and many other developing nations are also becoming leading actors on the world stage

Malaysian bilateral trade relations and economic growth

This paper examines the structure and trends of Malaysian bilateral exports and imports and then investigates whether these bilateral exports and imports have caused Malaysian economic growth. Although the structure of Malaysia’s trade has changed quite significantly over the last three decades, the direction of Malaysia’s trade remains generally the same. Broadly, ASEAN, the EU, East Asia, the US and Japan continue to be the Malaysia’s major trading partners. The Granger causality tests have shown that it is the bilateral imports that have caused economic growth in Malaysia rather than the bilateral exports

Exchange rate misalignments in ASEAN-5 countries

The purpose of this paper is to estimate the exchange rate misalignments for Indonesia, Malaysia, Philippines, Singapore and Thailand before the currency crisis. By employing the sticky-price monetary exchange rate model in the environment of vector error-correction, the results indicate that the Indonesia rupiah, Malaysian ringgit, Philippines peso and Singapore dollar were overvalued before the currency crisis while Thai baht was undervalued on the eve of the crisis. However, they suffered modest misalignment. Therefore, little evidence of exchange misalignment is found to exist in 1997:2. In particular, Indonesia rupiah, Malaysia ringgit, Philippines peso and Singapore dollar were only overvalued about 1 to 4 percent against US dollar while the Thai baht was only 2 percent undervalued against US dollar

Innovation-ICT-cybersecurity: The triad relationship and its impact on growth competitiveness

This study examines the global growth competitiveness of countries using the dynamics of growth, ICT, and innovation. It also introduces a new dynamic, cybersecurity, and argues that within a growth competitiveness framework, ICT, innovation, and cybersecurity mechanisms allow some countries to achieve higher ranks on the competitiveness ladder than others. Based on a theoretical framework that encompasses the economic growth model, the complementarity theory, and the international law theory, a model that integrates ICT, innovation, and cybersecurity, depicts the relationships amongst them and with growth competitiveness, and incorporates complementary factors with possible moderating effect is presented. The model proposed relationships are then tested using PLS-PM. The model proves to have adequate goodness-of-fit as well as predictive validity. Results support most hypotheses showing: (1) a positive relationship between ICT and innovation; (2) a positive relationship between each of innovation and ICT with growth competitiveness; (3) a mediating effect of innovation has in the ICT – growth competitiveness relationship; (4) a positive relationship between ICT and innovation on one hand and cybersecurity on the other; (5) a mediating role of cybersecurity in the ICT – growth as well as the innovation – growth relationships; and the (6) moderating effect that human capital has in the above relationships. Cyber threats, however, do not have a moderator role in these relationships. These findings are interpreted in relation to the extant body of knowledge related to ICT, innovation, and cybersecurity. Moreover, the theoretical and the practical implications are discussed and the practical significance is shown. Finally, the study limitations are listed, the recommendations are presented, and the direction for future work is discussed

The drivers of Corporate Social Responsibility in the supply chain. A case study.

Purpose: The paper studies the way in which a SME integrates CSR into its corporate strategy, the practices it puts in place and how its CSR strategies reflect on its suppliers and customers relations. Methodology/Research limitations: A qualitative case study methodology is used. The use of a single case study limits the generalizing capacity of these findings. Findings: The entrepreneur’s ethical beliefs and value system play a fundamental role in shaping sustainable corporate strategy. Furthermore, the type of competitive strategy selected based on innovation, quality and responsibility clearly emerges both in terms of well defined management procedures and supply chain relations as a whole aimed at involving partners in the process of sustainable innovation. Originality/value: The paper presents a SME that has devised an original innovative business model. The study pivots on the issues of innovation and eco-sustainability in a context of drivers for CRS and business ethics. These values are considered fundamental at International level; the United Nations has declared 2011 the “International Year of Forestry”

Alternative Development Strategies for the Post-2015 Era

This book is available as open access through the Bloomsbury Open Access programme and is available on bloomsburycollections.com. The global economic crisis of 2008-2009 exposed systemic failings at the core of economic policy making worldwide. The crisis came on top of several other crises, including skyrocketing and highly volatile world food and energy prices and climate change. This book argues that new policy approaches are needed to address such devastating global development challenges and to avoid the potentially catastrophic consequences to livelihoods worldwide that would result from present approaches. The contributors to the book are independent development experts, brought together by the UN to identify a development strategy capable of promoting a broad-based economic recovery and at the same time guaranteeing social equity and environmental sustainability both within countries and internationally. This new development approach seeks to promote the reforms needed to improve global governance, providing a more equitable distribution of global public goods. The contributors offer a critical evaluation of past development experiences and report on their creative search for new and well-thought out answers for the future. They suggest that economic progress, fairer societies and environmental sustainability can be compatible objectives, but only when pursued simultaneously by all

Egypt: a fluid institutional affair - an institutional theory interrogation of the Egyptian business services sector: the triad relationship of institutions, entrepreneurship and institutional intermediaries

This research is set out to examine the interrelation between high-growth entrepreneurship and institutions in Egypt. A triad relationship was identified among high-growth firms, formal institutions, and institutional intermediaries (hereafter II). Firstly, a set of institutional voids were examined on regulative, normative, and cultural aspects. The examined voids preclude entrepreneurship from achieving its full potential amid a challenging institutional framework. This gave rise to informal institutions and different forms of response behaviours while the institutional framework adjusts itself. Entrepreneurs in the meantime had to make do with what’s possible to capitalise on newly emerged market gaps following 2011. As such both market and political entrepreneurs exploited various forms of informal institutions resulting in both productive and unproductive forms of entrepreneurship. Secondly, IIs emerged as important players in the Egyptian institutional framework. This exploratory research identified five types of institutional intermediaries: user, process, regime-based, systemic, and niche. The IIs conduct an interchangeable variety of activities including institutional support, demand articulation, capacity building and knowledge brokering. The role of political economy particularly emerges when the Egyptian institutions are examined up close, especially as IIs play such salient roles. Here, the political economy interacts with the economy at large, and entrepreneurship in particular in three ways: First, the 2016 economic reform program should be questioned. Albeit positive reviews by the IMF (systemic II), and observable leaps for the economy, the Egyptian political power is still owned by an unaccountable few. A political few which are not subject to auditing, answerability, nor are they publicly voted in (or out). Secondly, Egypt has been all but receiving less development aid and concessional funding. Albeit rising voices against human rights violation and draconian crackdown on opposition, programs to promote entrepreneurship, develop technical and vocational education, female-led businesses and the like (systemic and process IIs), cannot fix the flawed institutions at their core. Thirdly, and perhaps most important, the involvement of the Egyptian military in the economy, at best as a monitoring authority, and at worst as a large market player, has been greatly disrupting the economy. State-owned and army-affiliated firms provide the market with much-needed merchandise that is both cheap and fast. This activity crowds out private investors, big and small, unless, of course, they join the military-affiliated businesses, thus exacerbating the already challenging problems of cronyism and clientelism. Finally, amid the rapid institutional changes, the Egyptian government, IIs and high-growth firms have been manifesting patterns of institutional entrepreneurship. In this sense, they do not simply react to the changes occurring in their environment. Rather, they display a variety of entrepreneurial behaviours, and rely on their good judgement to shape the institutions around them. Through collective institutional entrepreneurship market and political entrepreneurs pool their skills, resources, and power together to challenge their surrounding institutions. However, as the political economy of Egypt introduces an extra set of complications, informal institutions will remain stronger than formal ones, giving rise to evasive behaviour and unproductive entrepreneurship. Hence, institutional and regime uncertainty will deepen, and the Egyptian institutions will remain in a constant state of flux, i.e. fluidity. Accordingly, market and political entrepreneurs will keep adapting to the fluid institutions until either side subsides. Hopefully, this will not be the entrepreneurs