International audience ; FDI is crucial in the process of development, and offers wide scope for backward linkages to the broader economy. In expectance of such role and benefits, governments all over the world have engaged in various kinds of productive policy measures including Export Processing Zones (EPZs) or Free Industrial Zones (FIZs). However, the costs of races to the bottom to integrate and accommodate foreign entrepreneurs and potential investors may outweigh the benefits. This study used a vector autoregressive (VAR) model to empirically investigate finds that without a broader supportive policy environmental thrust; such a policy may lead to enclave development rather than provide a foundation for broad-based economic development. Hence countries need to develop strategies that attract firms that seek competitiveness on the basis of factors beyond low costs and tax breaks.
The topic of EPF sustainability has gained considerable attentions among the governments worldwide. In the wake of growing elderly population, improving life expectancy and declining mortality rate particularly in Malaysia over the years, concerns arise on the EPF's failure to fully commit the retirement incomes provision to the elderly population in the post-retirement periods. Specifically, this paper examines the short run and long run relationships between EPF balances and its determinants; investment earnings, nominal income, elderly population, life expectancy and mortality rate from 1960 to 2014. Of the findings, elderly population and mortality rate are unfolded to represent key deterrents of EPF balances, which acts as the proxy for the EPF sustainability, both in the short run and long run cycles. Thus, new improvements to the existing EPF scheme are recommended as means to alleviate the poverty problems among the elderly population besides addressing other economic and social fronts.
The current study measures the causal association between inflation and unemployment employing Phillips Curve approach from 1990 until 2016 for selected MENA countries. Granger causality and the heterogeneous causality methods for Panel are employed by this study as proposed by Dumitrescu and Hurlin. This causality test has an advantage over the panel Granger causality as it considers two dimensions of heterogeneity. The finding revealed a unidirectional causality between unemployment and inflation with Panel Dumitrescu and Hurlin Granger causality but not in the panel Granger causality test. Therefore, the governments should choose to stabilize inflation rate or reduce unemployment rate.
It is difficult to neglect the prominence of socio-economic factors that dampen the flow of Foreign Direct Investment (FDI) to a country, inspite of either being developed or developing. This study, however, looked into such factors that affect FDI inflows towards Pakistan.This study gains appreciable position due to an attempt of looking into the theoretical perception, some of whom are tested while others are not, that explain such determinants of FDI.Exercising Auto Regressive Distributed Lag (ARDL) technique of investigation on data ranging from 1974 to 2014 along with Error Correction Model (ECM) and bound test, some interesting facts, apart from conventional, though not in Pakistan or either quite rare, are found on the socioeconomic variables mix chosen in this research.It is suggested that the government is to look for specific policies to cater the problem of corruption that is found as a major hinge in the way of FDI inflows.
Sustained economic growth is a trance of all the developing and developed countries of the world. The need is not just a fetch of economic growth rather is a realization of a fact that the why some economies that receive heavy amount of foreign capital inflows in term of foreign direct investment (FDI) still find hard to capture the economic growth targets.This research captures for the state of the position of economic growth in terms of FDI and other internal factors in Pakistan. The study is based on the time series analysis covering the range of data from 1972 to 2014. Johansen Juselius technique of co-integration is employed for the precise statistical findings.Unit root test is computed in terms of Augmented Dickey Fuller Test (ADF). Granger Causality test and Error Correction Model (ECM) is employed to test for the short-run and long-run relationships and causality between the variables selected in the equation of growth. The results of the study show that FDI and GDP possess positive association in short-run as well as in long-run. Unidirectional causality is also found on account of FDIand GDP. The study suggests that the government of Pakistan is to further pave off the ways that it already practices to attract FDI that is prerequisite for sovereign upcoming scenery of the country.
Over the years, Malaysia has progressively accelerated its economic development, thanks to the adherence to high rates of domestic savings and investment. Of which, the Employees Provident Fund (EPF) is one of the schemes that caters for the private sector workers. Specifically, this paper investigates the relationship between economic growth and EPF investment in Malaysia for the period of 1970 – 2014. The model, which is derived from the Cobb-Douglas production function, is tested by econometric techniques; Johansen cointegration and Granger causality within VECM. While the EPF investment is proven statistically insignificant in the short run, there is evidence of the saving/investment-led-growth hypothesis being the long run phenomenon for Malaysia. In view of the possible over-dependence on investment funds in generalgoing forward, the policy makers are recommended to reinforce the government's initiative in facilitating more business ventures as means to attract incoming funds, including FDI flows, towards streaming into the country.
PurposeThis paper measures the impacts of foreign direct investment (FDI), globalisation and political governance on economic growth in West Africa. The empirical analysis also includes the interaction effect of political governance and FDI on the growth of the sub-region, over the period of 1996–2016.Design/methodology/approachThe study employs the autoregressive distributed lag technique on data obtained from the World Bank and the KOF institute.FindingsThe study findings suggest a positive relationship between globalisation and political governance on economic growth. Even though there have been inconclusive results on the FDI–growth nexus, the authors found that FDI stimulates the growth of the sub-region, while political governance enhances the positive impact of FDI on economic growth. The other factors of growth included are labour, capital and government size, whose effects on growth are, respectively, negative, negative and positive.Practical implicationsThe governments of the West African countries promote policies that attract FDI into the sub-region, so that economic performances may be enhanced. In addition, the governments of the West African sub-region should work to reap the benefits of globalisation, by promoting the competitiveness of their local economies in order to keep pace with the global markets. Finally, the political-governance infrastructures should be overhauled; the culture of accountability and transparency should be promoted, while all efforts should be made to improve stability in the political environment in order to increase investors' confidence in the West African economy.Originality/valueThis study is the first to single out the impacts of political governance, as categorised by the World Bank, through both direct and interactive measures. This is necessary in view of the assertion that political governance largely accounts for improved economic performance in an economy. The use of the Pesaran (2007) technique of unit root is also a deviation from existing studies. This is in view of the fact that it tests variable unit root in the presence of cross-sectional dependence; thus, controlling for contemporaneous correlation which was not considered in the first-generation tests.
