The study aims to use individuals using the internet and fixed broadband subscriptions as a proxy for digitalization to empirically assess the effects of Foreign Direct Investment…
Abstract
Purpose
The study aims to use individuals using the internet and fixed broadband subscriptions as a proxy for digitalization to empirically assess the effects of Foreign Direct Investment (FDI), digitalization and their interaction on income inequality in developed and developing countries from 2002 to 2019.
Design/methodology/approach
The paper used the system general method of moments estimators for 30 developed and 35 developing countries.
Findings
FDI increases income inequality in developed countries but decreases it in developing countries, digitalization reduces income inequality in both groups and interaction term narrows income inequality in developed countries but widens it in developing countries.
Originality/value
The paper is the first to introduce digitalization into the FDI – income inequality relationship. Furthermore, it provides empirical evidence to show the difference in the role of digitalization in this relationship between developed and developing countries.
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Both income inequality and inflation can lead to social instability. Does inflation impact income inequality differently between advanced and developing countries? This paper…
Abstract
Purpose
Both income inequality and inflation can lead to social instability. Does inflation impact income inequality differently between advanced and developing countries? This paper delves into this question by analyzing the effects of inflation on income inequality across a sample of 34 advanced countries and 44 developing nations from 2010 to 2023.
Design/methodology/approach
Employing both the two-step system GMM estimator and PMG estimation, the study reveals intriguing insights.
Findings
Firstly, while inflation exacerbates income inequality in advanced countries, it narrows the gap in developing nations. Secondly, economic growth mitigates income inequality in advanced nations but widens it in developing ones. However, infrastructure development increases income inequality in advanced countries but alleviates it in developing ones. Thirdly, trade openness correlates with reduced income inequality across both groups of countries.
Originality/value
So far, no existing studies empirically approve the opposite effects of inflation on income inequality between developing and advanced economies. The findings offer valuable policy insights for governments in advanced and developing nations in the fight against income inequality.
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The paper attempts to empirically examine the difference in the foreign direct investment (FDI) – private investment relationship between developed and developing countries over…
Abstract
Purpose
The paper attempts to empirically examine the difference in the foreign direct investment (FDI) – private investment relationship between developed and developing countries over the period 2000–2013.
Design/methodology/approach
The paper uses the two-step GMM Arellano-Bond estimators (both system and difference) for a group of 25 developed countries and a group of 72 developing ones. Then, the PMG estimator is employed to check the robustness of estimates.
Findings
First, there is a clear difference in the FDI – private investment relationship between developed countries and developing ones. Second, governance environment, economic growth and trade openness stimulate private investment. Third, the effect of tax revenue on private investment in developed countries is completely opposite to that in developing ones.
Originality/value
The paper is the first to provide empirical evidence to confirm the dependence of FDI – private investment relationship on governance environment. In fact, contrary to the view (arguments) in Morrissey and Udomkerdmongkol (2012), the paper indicates that FDI crowds out private investment in developed countries (good governance environment), but crowds in developing countries (poor governance environment).
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Van Ha, Mark J. Holmes and Gazi Hassan
This study focuses on the linkages between foreign direct investment and the research and development (R&D) and innovation activity of domestic enterprises in Vietnam.
Abstract
Purpose
This study focuses on the linkages between foreign direct investment and the research and development (R&D) and innovation activity of domestic enterprises in Vietnam.
Design/methodology/approach
The Heckman selection model approach is applied to a panel dataset of nearly 7,000 Vietnamese firms for the 2011–2015 study period to investigate the impact of foreign presence on the R&D of local firms through horizontal and vertical linkages. Probit model estimation is employed to examine how foreign investment influences the innovation activity of local companies.
Findings
While there are a small number of firms carrying out R&D activities in Vietnam, foreign or joint domestic–foreign venture firms are less inclined than domestic firms to undertake R&D. Domestic factors that include capital, labor quality, location and export status of firm have a significant effect on the decision of domestic firms to participate in R&D activity. Only forward linkages and the gross firm output are found to have an impact on the R&D intensity of domestic enterprises, while other factors appear to have no significant influence on how much firms spend on R&D activities.
Practical implications
In order to promote the R&D activity of domestic firms, policy should focus on (1) the backward linkages between local firms in downstream sectors with their foreign suppliers in upstream sectors, and (2) the internal factors such as labor, capital or location that affect the decisions made by domestic firms.
Originality/value
Given that foreign investment may affect R&D and innovation activity of local firms in host countries, the impact is relatively unexplored for many emerging economies and not so in the case of Vietnam. The availability of a unique survey on Vietnamese firm technology and competitiveness provides the opportunity to address this gap in the literature.
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Abubakar Musah, Godfred Aawaar and Eric Nkansah
This paper investigates the moderating role of institutional quality in the relationship between public education financing and educational quality in Sub-Saharan Africa (SSA).
Abstract
Purpose
This paper investigates the moderating role of institutional quality in the relationship between public education financing and educational quality in Sub-Saharan Africa (SSA).
Design/methodology/approach
This paper uses a two-step system generalised method of moments (GMM) to investigate the dynamic relationships among the variables using data from the World Bank covering the periods 2002–2020 for 46 SSA countries.
Findings
The results show that institutional quality moderates the effect of public education financing on educational quality at SSA’s primary, secondary and tertiary levels. This finding shows that improved institutional quality enhances the effectiveness of public educational investments.
Practical implications
The findings of this study imply that policymakers seeking to enhance educational quality must not only increase educational investments but also institute measures to improve institutional quality.
Originality/value
Prior studies fail to examine the moderating role of institutional quality in the nexus between public education financing and educational quality. This study analyses the role of institutional quality in the public education financing–educational quality nexus in SSA. The findings of this study contribute to improving the return on public education financing in SSA.
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Roots of global Terrorism are in ‘failed’ states carved out of multiracial empires after World Wars I and II in name of ‘national self‐determination’. Both sides in the Cold War…
Abstract
Roots of global Terrorism are in ‘failed’ states carved out of multiracial empires after World Wars I and II in name of ‘national self‐determination’. Both sides in the Cold War competed to exploit the process of disintegration with armed and covert interventions. In effect, they were colluding at the expense of the ‘liberated’ peoples. The ‘Vietnam Trauma’ prevented effective action against the resulting terrorist buildup and blowback until 9/11. As those vultures come home to roost, the war broadens to en vision overdue but coercive reforms to the postwar system of nation states, first in the Middle East. Mirages of Vietnam blur the vision; can the sole Superpower finish the job before fiscal and/or imperial overstretch implode it?
Globalisation is generally defined as the “denationalisation of clusters of political, economic, and social activities” that destabilize the ability of the sovereign State to…
Abstract
Globalisation is generally defined as the “denationalisation of clusters of political, economic, and social activities” that destabilize the ability of the sovereign State to control activities on its territory, due to the rising need to find solutions for universal problems, like the pollution of the environment, on an international level. Globalisation is a complex, forceful legal and social process that take place within an integrated whole with out regard to geographical boundaries. Globalisation thus differs from international activities, which arise between and among States, and it differs from multinational activities that occur in more than one nation‐State. This does not mean that countries are not involved in the sociolegal dynamics that those transboundary process trigger. In a sense, the movements triggered by global processes promote greater economic interdependence among countries. Globalisation can be traced back to the depression preceding World War II and globalisation at that time included spreading of the capitalist economic system as a means of getting access to extended markets. The first step was to create sufficient export surplus to maintain full employment in the capitalist world and secondly establishing a globalized economy where the planet would be united in peace and wealth. The idea of interdependence among quite separate and distinct countries is a very important part of talks on globalisation and a significant side of today’s global political economy.