THEORIES ON ECONOMIC DEVELOPMENT AND FDI

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Foreign Direct Investment (FDI) Types and Theories: The Significance of Human Capital

Foreign Direct Investment (FDI) Types and Theories: The Significance of Human Capital

attraction should be (apart from monetary and fiscal incentives) accompanied by development and an increase in the level of human capital, as a prerequisite to attract the right FDI and not every kind of foreign investment – something that happened in Kosovo. Determining which kind of foreign investments a country will attract is a very important step in terms of development and orientation of available human capital stock. Because of structural problems with human capital, Kosovo and other countries that have high unemployment sometimes attempt to attract every kind of FDI, even if it proves to be of limited help, but decreases high unemployment. Such investments (rent seekers) are not necessarily long term oriented and do not create long-term employment and sustainable development of human capital. Moreover, according to Hoti (2005), these investments, in short term, also push wage inequality hence placing strong pressure on the public sector for wage increases (Hoti, 2005). In the beginning of transition from communism to capitalism, many researchers argued that the average level of education embodied in human capital within transition economies was relatively high (Duczynski, 2001; Druska et al., 2002, Spagat, 2006). However, later on, a number of researchers and empirical studies from well-known international institutions suggested that transition economies lag behind compared with industrialized countries in terms of the quality of their workforce (EBRD 2008). One of them is a supply of trained and educated human capital (UNDP 2010). Since attracting FDI has prerequisites, no doubt, such situation acted as a big barrier to attract higher and qualitative FDI in these countries. Because of this, in the case of Kosovo, which is heavily populated by young people and high unemployment, it is very important to make strong bridges between education and economic development, hence FDI attraction.
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Theories of International Economic Development (Case Study: Economic Development in Kosovo)

Theories of International Economic Development (Case Study: Economic Development in Kosovo)

In 1992 the value of FDI-s was about 2 trillion USD. Profit from sales of these investments was around 5.5 trillion USD that is quite larger than the global value of exports of goods and services with the amount to 4 trillion dollars. FDI are not the only realm of big business or of some big powers. Also note that the trend of FDI directed to developing countries rather than to the rich countries of the industrialized world. In 1991, they were in developing countries 26% of FDI-s or 42 billion USD, while in 1997 the figures are considerably higher, respectively 37% and 149 billion USD. Data collected evaluated by the OECD and the IMF, suggest that FDI have increased dramatically. The total value of such global investments in 1967, RA was estimated to be USD 105 billion, went up to 596 billion by 1984. FDI appear to be making important way for the of sales in foreign markets. Only in America, in the period 1960-1985, the FDI increased from 6.9 to 183 billion USD. 30
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The role of FDI in economic growth in Namibia

The role of FDI in economic growth in Namibia

The growth of private foreign direct investment (FDI) in the developing world has been extremely rapid in recent times. FDI flows to developing economies in 2012 for the first time ever exceeded those to developed countries by some US$130 billion (James, 2013). According to the Bank of Namibia Data Catalogue, foreign direct investment, net outflows (% of GDP) in Namibia was 0.16 as of 2011. Its highest value over the past 6 years was 2.58 in 2006, while its lowest value was -0.55 in 2007.The value for Foreign direct investment, net (BoP, current US$) in Namibia was ($950 million) as of 2011. Over the past 6 years, the value for this indicator has fluctuated between ($403 million) in 2005 and ($950 million) in 2011.The value for Foreign direct investment, net inflows (BoP, current US$) in Namibia was $968,867,300.00 as of 2011. Over the past 25 years, the value for this indicator has fluctuated between $968million in 2011 and ($1, 5 million) in 1988. Foreign direct investment, net inflows (% of GDP) in Namibia was 7.74% as of 2011. Its highest value over the past 25 years was 8.4%9 in 2008, while its lowest value was -0.07 in 1988. Virtually all developing countries today make a strong claim on the role of FDI in economic growth and development. Although FDI flows to developing countries are small in absolute terms, they can, it is argued nonetheless, constitute a significant proportion of the overall capital formation. In addition, the theories behind FDI and growth revolve around their role in providing badly-needed additional capital in capital- scarce developing economies and access to technology and know-how as well as to international trade.
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Analysing the theories explaining the pattern of FDI in China and assessing the impact of such FDI upon the Chinese economy

Analysing the theories explaining the pattern of FDI in China and assessing the impact of such FDI upon the Chinese economy

Foreign direct investment is undoubtedly one of the most popular area of interest of scholars given the sheer level of importance countries attach to it to develop their economies. Nevertheless, various scholar theories and debates have mushroomed across the globe explaining the pattern of FDI around the world and questioning the efficiency of FDI as a viable development tool for nations. Hence, this paper aims to provide an in-depth analysis as to what are the most viable theories explaining FDI activities, more specifically upon the Chinese economy and whether such FDI has been an antidote to the problems faced by China during its transition towards a robust economic power. The work of famous scholars including Dunning (1973, 1980, 1998) and Hymer (1977) amongst others was fundamental in providing a deep understanding to the theories of FDI in China. The impact of FDI upon China macroeconomic indicators not restricted to employment, gross domestic
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Multinationals in economic development: the benefits of FDI

Multinationals in economic development: the benefits of FDI

1 concentrate on four issues: the role of multinational enterprises in promoting technology transfer; the extent to which foreign firms act as "export catalysts" for domestic firms; the [r]

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Does FDI cause Economic Growth?

Does FDI cause Economic Growth?

Gross domestic product is a very strong measure to gauge the economic health of a country and it reflects the sum total of the production of a country and as such comprises all purchases of goods and services produced by a country and services used by individuals, firms, foreigners and the governing bodies (Jain, Nair & Jain, 2015). It is used as an indicator by almost all governments and economic decision- makers for planning and policy formulation. It enables one to judge whether the economy is contracting or expanding, whether it needs a boost or restraint, and if a threat such as a recession or inflation looms on the horizon. When government officials plan for the future, they consider the various economic sectors’ contribution to the gross domestic product (GDP). GDP was first developed by Simon Kuznets for a US Congress report in 1934 (Jain et al., 2015). The volume of GDP is the sum of value added, measured at constant prices, by households, government, and industries operating in the economy. GDP accounts for all domestic production, regardless of whether the income accrues to domestic or foreign institutions (Jain et al., 2015). Figure 2 below shows Zimbabwe`s FDI inflows as a percentage of GDP and GDP annual growth from 1970 to 2017. Zimbabwe recorded some significant GDP annual growth rates since 1970, that is, 1970 (22.6%), 1980 (14.42%), 1981 (12.53%), 1996 (10.36%), 2009 (12.02), 2010 (19.68%), 2011 (14.19%) and 2012 (16.67%). However, negative GDP annual rates were recorded in the following years, 1977 (-6.86%), 1992 (-9.02%), 2002 (-8.89%), 2003 (-17%) and 2008 becoming the worst year in the history of Zimbabwe after recording -17.67%. This was, however, due to a number of macroeconomic and political challenges. These
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FDI and Economic Growth, the Case of Romania

FDI and Economic Growth, the Case of Romania

In order to determine the impact using econometric models, we used data regarding the annual evolution of variable gross domestic product (GDP) and the independent variables, foreign direct investment inflows (FDI), government expenditure (GE) and gross fixed capital formation (GFCF). Data were taken from the World Bank database and are expressed in millions. By gross domestic product, we understand total value of goods and services produced by all economic agents operating within the borders of a country, irrespective of their nationality. It is calculated as the difference between the total value of goods and services produced in a given period (gross global product) and total value of intermediate consumption (economic goods and services produced in order to achieve other economic goods and services); Vasilescu, 2003. Public expenditure expresses social and economic relations in cash, which occurs between the state, on the one hand, and individuals and businesses, on the other hand, when the allocation and use of financial resources of the state to fulfill its functions Văcărel, 2007. Gross fixed capital formation represents the value of durable goods acquired by units resident in order to be used later in the production process NBS 2013. Current account balance expresses the effects resulting from exports and imports, foreign income and net current transfers Voinea, 2008.
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What Are the Impact of FDI to Economic Growth?

What Are the Impact of FDI to Economic Growth?

From these facts, neo classical theories for FDI have shown the following advantages that rise from FDI. (a) It introduces new technology from developed countries to developing countries. Moreover, introduce new managerial skills training of workers (b) generate employment (c) foreign exchange and (d) improve balance of payment (e) rise competition which lead to proper utilization of resources and increase productivity (Bergten et al, 1978; Kojima, 1978; Kojima 1975; Reuber et al, 1973). However, neo classical theories of FDI give less attention to whole macroeconomic relationship with economic growth factors in their analysis.
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The Impact of FDI on the Economic Growth of Serbia

The Impact of FDI on the Economic Growth of Serbia

According to the Development Report of Serbia 2010 (2011), the economic growth of Serbia is based on do- mestic demand, imports and the need for foreign funds. In the period 2001-2008 the average rate of eco- nomic growth was 4.9%. The achieved economic growth was a consequence of the process of undergoing economic and social policy changes, institutional reforms and a favorable environment in the international capital market ( orđević and Veselinović, 2010). However, Serbia established a new model of growth. The new growth model was changed to pro-investment strategy and export-oriented economic growth. The new growth is based on the reform of the public sector, restructuring and infrastructure development. The main objectives of this model are correlated with the EU’s goals – reduction in unemployment rate, human capi- tal improvement, investing in knowledge and technology, export-based growth, rational energy use and poverty reduction. Accomplishing such objectives depends on – fixed investment increase, reducing the share of public consumption in the GDP, raising the share of exports in the GDP and reducing the current account deficit (Jednak et al., 2013). Although Serbia implemented the new model of economic growth, the rise in production output was not achieved. The possible reasons could be the lack of domestic capital, fewer foreign investments in comparison with the 2000s due to the global economic crisis, a previously un- stable political and business environment, insufficiently developed institutions, small domestic market or the distance from investing countries (Erstin and Uvalic, 2013). Further on, the exports are not high enough because the most investments are made in the service sector which does not have a large share in Serbian exports. During the time period 2000 – 2014, the FDI in Serbia differed in volume and trend. The majority of inflows of FDI were through the privatization and acquisitions in the banking sector, while the greenfield in- vestments were very low.
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FDI in Colombia. Policy and Economic Effects

FDI in Colombia. Policy and Economic Effects

7 Summary and conclusions There are two main objectives of this study. First, the policies used by Colombia to attract FDI are examined. Policies play an important role not only in attracting FDI, but also in making the host economy benefit the most from it. The FDI regime in Colombia has gone through a modernization process in which entry and protection rules have been improved since the early 1990s. Recent reforms have eased business establishment and improved guarantees to investors through legal stability contracts. Further, the reconstruction of the free trade zones is a positive initiative that improves the attractiveness of Colombia as a FDI host country. Despite these developments, in order to maximize FDI’s contribution to economic development, more efforts need to be made when it comes to attracting quality FDI. Several areas need to be upgraded to internationally competitive levels. First, the local science and technology capacity needs to be improved. The low expenditure on R&D is alarming and should be increased. Further, transport infrastructure is poor and is a hindrance for export-oriented FDI. It is important that the planned public-private partnership investments on road infrastructure actually will take place. Finally, promotion of linkages between local supplier firms and multinationals are recommended.
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To What Extent Foreign Direct Investment (FDI) Affect in Economic Development of Pakistan

To What Extent Foreign Direct Investment (FDI) Affect in Economic Development of Pakistan

In the compare, the New Theory of Economic Growth, however, it concludes that FDI may affect not only the level of output per capita but also affect its rate of growth. This literature has developed several different arguments that explain why FDI may potentially increase the growth rate of per capita income in the host country, and these identified channels to boost economic growth which include increased capital accumulation in the recipient economy, improved efficiency of locally owned host country firms via contract and protest effects, and their exposure to aggressive competition, scientific change, and human capital growth and increased exports. However, the level to which FDI contributes to growth depends on the economic and social condition or in short, the quality of environment of the receiver country (Buckley, et al. 2002). This environment relates to the rate of savings in the receiver country, the degree of openness and the level of technological development. Receiver countries with high rate of savings, open trade system and high technological product would benefit from increased FDI to their economies.
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Review of Economic Theories of Regulation

Review of Economic Theories of Regulation

Assume that because of some shortage in supply in a former period, prices have risen to P 1 , which is somewhat above market equilibrium price P e . At that price, supply is Q 1 . However, at that quantity, the market can only clear at price P 2 . Suppliers will react to that price by supplying only Q 2 units in the next period. However, at these quantities, the market will clear only at very high prices, motivating suppliers in the next period to supply increasingly more, etc. Excessive or ruinous competition may also arise in a natural oligopoly setting. In a natural oligopoly situation productive efficiency is achieved if only a few companies supply the market. The small number of companies allows each of them to react to each other’s market strategies. One of the outcomes may be a persistent price war. Effects are that prices may decline below average cost and that price dispersion is increased. Both effects create inefficiencies in the allocation of resources or in consumer decision-making. Furthermore, excessive competition may be detrimental to safety and reliability when consumers cannot observe or verify the quality of goods and services (Kahn, 1988, pp. 172-178). In the past regulatory practices assumed that situations of excessive competition applied to sectors such as air travel, passenger transport, freight or transport by water (trucks, taxis, shipping). For these sectors, business licensing restrictions were devised and the capacity was rationed, sometimes in combination with minimum price regulation. Regulatory theories however, considered the collection of excessive competition-rationales of government intervention to be ‘an empty box’ (see Breyer, 1982, pp. 29-32) and regulations might better be explained from a private interest perspective. Recently, modern regulatory theories developed several instances of structural market failures in potentially competitive sectors Telser, 1978, 1994, 1996; Button and Nijkamp, 1997
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Integration theories and economic development: A case study of the political and social dynamics of ECOWAS

Integration theories and economic development: A case study of the political and social dynamics of ECOWAS

the colonialist had used quite effectively.34 The impedance o f opposition forces, such as other political parties, the judiciary, regional assemblies, and traditional authority structures by ruling governments were meant to enable the building o f structures that the incumbents saw as necessary for nation building. The undeveloped nature o f West African politics today is to an extent explained by the curbing o f political dissent in the early days o f independence. The one party state which most o f these states experimented with at one time or another is also a response by many governments to what was viewed as impediments to policy implementation and inappropriate political structures for ethnically heterogeneous political communities. Some o f the legacies of such rule is that access to the political centre became highly circumscribed and opposition, where it exists, finds it nearly impossible to operate. The military therefore became the main instrument of political transition. Many o f the member countries of ECOWAS have experienced military coups several times since independence. These have also left their mark on the politics of the region. They have impeded the development o f bureaucratic styles o f decision making and long term strategic planning is difficult because military governments tend to rule by decrees and are usually inclined to jettison the programmes o f their predecessors. They have affected intra-regional relations to the extent that they created unpredictability in regional politics and lack o f confidence in the implementation o f treaties. Repudiation of agreements by previous governments, such as Acheampong's repudiation o f loans contracted by the Busia regime in Ghana when the former overthrew the latter in 1972 is a case in point.
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FDI and Human Capital Development

FDI and Human Capital Development

language policies as a tool to Attract foreign investment to the city-state, which, in turn, provided the basis for its economic development. 4.1.1Thailand Experience: It has observed that foreign firms have lower productivity compared to their local counterparts. FDI inflow did not give rise to the transfer of technology and management techniques. No training has provided for the development of the human capital. The reason behind such a paradoxical situation in Thailand was that most of the investments in Thailand took place in the low and medium technology industry, which did not require much skill. Hence, diffusion of skill from the parent company to its subsidiary was less and minimum investment by the MNC in the human capital development. In addition, there was a wide technological gap, which inhibited the ability of the local employees to learn. The gap was either great that it was hard to bridge or MNCs deterred themselves from bridging the gap. Therefore, any investment in that sector did not materialize into growth of human capital because the gap either inhibited the workers to learn or made it impossible for the employers to bridge that gap.
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FDI Inflows in BRICS Nations and Impact of FDI in development of BRICS

FDI Inflows in BRICS Nations and Impact of FDI in development of BRICS

1041527 26 transportation which aids in completing the process of the foreign investment. For example: China created a Shenzhen Special Economic Zone, which is in a village called Shenzhen, a small village with a population of 70 thousand people and with an area of 325 Sq. miles but because of the efforts placed to renew the place, it is now one of the most modern areas in China. It itself accounts for $40 billion Gross Domestic product (GDP) and around 1,20,000 transnational companies are working in this place. It is also one of the largest ports in the world and it has its own stock exchange. This is all happened because of the strategy initiatives of China and its government. They allowed many joint ventures so that the trade could grow between the nations. China provided incentives and good wages to the workers and promoted exports on a large scale (Al-Nuemat, A., 2009).
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The origins of economic inequality between nations: An historical synthesis of Western theories on development and underdevelopment

The origins of economic inequality between nations: An historical synthesis of Western theories on development and underdevelopment

legitimate to ask whether or not poverty breeds inequality.” He surfaced with three concepts which explained for him in part the causes of the observed deterioration: environmental influence, cultural determinism, and the "soft state". The last two put him smack in the middle of an important Western intellectual stream. Cultural determinism was exemplified by religion, which, on the popular level, was "a ritualized and stratified complex of highly emotional beliefs and valuations that regularly give the sanction of sacredness, taboo, and immutability to inherited institutional arrangements, modes of living and attitudes...acts as a tremendous force for social inertia." The "soft state" was a crucial derivation from this psycho-cultural complex. Within it there was neither solidarity nor social discipline. Western juridical principles and practices were foreign or incompatible with it. But above all it was arbitrary and corrupt. And Myrdal mentioned the irony of Third World corruption: "On one hand it had proved difficult [in backward countries] to allow and encourage the operation of rational motivations with profitable ends in the social sector where these motivations function in developed countries, which is the area of private business; while on the other hand it has been seen to be equally arduous to eliminate the search for personal gain in that sector where it has been extirpated in the West, which is that of political power and public administration." Myrdal cited the case of Indonesia where corruption was reputedly absent during Dutch colonial rule but had picked up dramatically after independence. By some recondite means, climate was the ultimate cause of social and economic backwardness, but the immediate determinant influences were "reformable" social practices. The offshoot seemed to be that more could be done about underdevelopment from within than by changing the structures of international c o m m e r c e . 1^4 shall refer
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Theories of Learning and Student Development

Theories of Learning and Student Development

This article explores prevailing theories for learning and student development. Different thoughts are offered based on existing research and how they relate to the ability of students’ positive outcomes. Specific attention is paid to learning theories that utilize classical conditioning, operant conditioning, and information processing. The ideas presented are meant to guide educational leaders through the use of these cognitive structures. Specific focus is on the design of these theories and their actual application. Through a deeper understanding of these structures, educational leaders can guide their organization through the selection and implementation of these learning schemas.
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Legal Theories of Financial Development

Legal Theories of Financial Development

One may further refine the categorization of legal systems. For instance, Franks and Sussman (1999) describe differences in the adaptability of two Common law countries: the United Kingdom and the United States. Furthermore, France has partially shaken loose from the shackles of the Napoleonic legal doctrine over the last two centuries. Despite its origins, France has re-instilled jurisprudence and created a more responsive, dynamic legal system than that characterized by the theory underlying the French civil law. Moreover, different colonization strategies may have intensified differences across legal traditions. England did not try to replace Islamic, Hindu, or African law. English courts in the colonies, therefore, used local laws and customs in deciding cases. This quickly produced an Indian Common law distinct from English Common law. While perhaps chaotic, this allowed for the dynamic integration of common law with local circumstances. In contrast, the French imposed the Code although serious conflicts frequently existed between the Code and local customs. Also, legal scholars study differences across the French civil law countries of Latin America. While recognizing that each country’s legal system is special, legal theories hold that there are key differences across the major legal families. Thus, we stay with the standard classification of legal systems.
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Crime Causation: Economic Theories

Crime Causation: Economic Theories

Economists see criminal activity as being similar to paid employment in that it requires time and produces an income. Clearly, the dichotomy between either criminal activity or legal activity is an oversimplification. For example, individuals could engage in criminal activities while employed since they have greater opportunities to commit crime; similarly, some criminals may jointly supplement work income with crime income in order to satisfy their needs. A secondary problem with the economist’s choice model, which was highlighted in our opening comments, is that young people are more likely to participate in crime long before they participate in the labor market. This observation raises questions about the appropriateness of the economic model of crime in explaining juvenile crime.
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Entrepreneurship, Economic Growth and Entrepreneurship Theories

Entrepreneurship, Economic Growth and Entrepreneurship Theories

Entrepreneurial attributes such as the motive for venturing into business, obtaining business and innovative skills, having educational and networking ability, are also vital elements to consider in entrepreneurial success that can contribute to economic growth (Ekpe, 2011:288), which means that these entrepreneurial skills need to be developed if the entrepreneurs are to be successful. It is important to note that entrepreneurial skills are not inherited and unchangeable as traditional thought may lead us to believe. Research has proved that people can still change certain characteristics of entrepreneurs which were previously regarded as genetic (Nieuwenhuizen, 2004:48).
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