Education and development in the caribbean: a cointegration and causality approach

This paper uses cointegration and vector error-correction models to analyse the causal relationship between education and development in Barbados, Jamaica, and Trinidad and Tobago using annual time series data from 1964 to 1998. Expenditure on education per capita is used as the proxy for education, while gross national income (GNI) per capita is the proxy for development. The empirical results provide some evidence of bi-directional causality in the short in Jamaica. There is no evidence of causation running from per capita expenditure on education to per capita gross national income in either the short or long run in Barbados, and Trinidad and Tobago. A major policy implication of the findings is that countries with higher per capita gross national income (GNI) seem to be spending more per capita on education.

Foreign direct investment (FDI) and the global food crisis. A study of the Windward Islands' agricultural sector.

Using panel data unit root tests and Johansen Co-integration tests, as well as the Engle-Granger -correction model to test for causality, this study examines the effect of FDI on agriculture sector productivity (x6), market size (x2), macroeconomic performance (x3), infrastructure (x4), competitiveness (x5), financial performance (x7) and governance (x8), in a sample of five Caribbean countries over the period 1970-2006. According to UNCTAD (2008), FDI is defined as investment made from outside of the economy of the investor with the objective of acquiring a lasting interest in or effective control over an enterprise. The results suggest that in general when evidence of causality is observed it runs from FDI to (x4). No causality was detected in either direction for (x2), (x5), (x6) and (x8). However, causality runs from FDI to (x3). A major policy implication of the findings is that the agriculture sector does not impact significantly on the attraction of FDI in these countries.FDI

Do exchange rates in caribbean and latin american countries exhibit nonlinearities?

This paper applies the recently developed Kapetanios et al. (2003) nonlinear stationary test to annual time series data on real exchange rates in selected Caribbean and Latin American countries over the period 1980-2003, to determine whether or not these real exchange rates exhibit nonlinearities. Generally, the ADF rejects the null hypothesis of a unit root in real exchange rates for most of the countries in our study, whereas the Kapetanios et al. (2003) test fails to reject the null hypothesis of a unit root in real exchange rates for most countries. The fact that the real exchange rates in most of the countries included in our study are nonlinear stationary implies that the nominal exchange rate and relative price are cointegrated irrespective of which price indices are used to compute the real exchange rate.

The impact of foreign direct investment on the development of manufacturing industries in the Nigerian economy

The present study investigates the impact of foreign direct investment (FDI) on the development of manufacturing industries in Nigeria. The Study first reviews previous work on the developed countries (LDCs). Second, the study describes and analyses the changes in Nigeria's economic structure as a result of the establishment and growth of manufacturing industries between 1960 and 1974. Third, the study examines the comparative behaviour of foreign and local firms. in Nigerian manufacturing industries, with respect of employment policy, technology choice, industrial concentration, output growth, technical efficiency and their balance of payments impact. This examination is undertaken through the testing of specific hypotheses to highlight the impact of ownership characteristics in the above areas. In brief, the conclusions are: Empirical results, based on discriminant analysis and non-parametric tests indicate that nationally of ownership is significantly related to the choice of technology, employment policy, industrial concentration and output growth. Further, the production function analysis shows that separate production functions do exist for both foreign and local firms. However, foreign firms are not seen to possess greater levels of technical efficiency than local firms. Second, this study has shown that the potential for technological flexibility does appear to be present and therefore policies that affect incentives and that can potentially affect foreign and local investors' behaviour are certainly important. These include policies affecting relative prices as well as the general competitive environment