AGDI currently has about 300 publications.
2015 |
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681. | Asongu, Lieven De Moor Simplice A Recent advances in finance for inclusive development: a survey 2015. Abstract | Links | BibTeX | Tags: Finance; Inclusive growth; Economic development @workingpaper{Asongu2015b_34, title = {Recent advances in finance for inclusive development: a survey}, author = {Lieven De Moor Simplice A. Asongu}, editor = {African 2015 Governance and Development Institute WP/15/005}, url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Recent-advances-in-finance-for-inclusive-development.A-survey.pdf}, year = {2015}, date = {2015-03-01}, abstract = {The policy debate has been shifting from the finance-growth nexus to the finance-inequality relationship. In the transition from Millennium Development Goals (MDGs) to Sustainable Development Goals (SDGs), there has been an urgent policy challenge of putting some structure on recent advances in finance for more inclusiveness. The overarching question tackled in this paper is: to what degree has financial development contributed to providing opportunities of human development for those in the low-income strata and by what mechanisms? We survey about 170 recently published papers to provide recent advances in finance for inclusive development. The analytical approach consists of first, situating issues of exclusive growth in the context of the literature and then reviewing recent financial inclusion growth strategies. Developed and developing countries are separately engaged in some currents to account for heterogeneity in financial development benefits. Retained financial innovations are structured along three themes, notably: the rural/urban divide, women empowerment and human capital in terms of skills & training. The financial instruments are articulated with case studies, innovations and investment strategies with particular emphasis, inter alia on: informal finance, microfinance, mobile banking, crowdfunding , Islamic finance, remittances, Payment for Environmental Services (PES) and the Diaspora Investment in Agriculture (DIA) initiative.}, keywords = {Finance; Inclusive growth; Economic development}, pubstate = {published}, tppubtype = {workingpaper} } The policy debate has been shifting from the finance-growth nexus to the finance-inequality relationship. In the transition from Millennium Development Goals (MDGs) to Sustainable Development Goals (SDGs), there has been an urgent policy challenge of putting some structure on recent advances in finance for more inclusiveness. The overarching question tackled in this paper is: to what degree has financial development contributed to providing opportunities of human development for those in the low-income strata and by what mechanisms? We survey about 170 recently published papers to provide recent advances in finance for inclusive development. The analytical approach consists of first, situating issues of exclusive growth in the context of the literature and then reviewing recent financial inclusion growth strategies. Developed and developing countries are separately engaged in some currents to account for heterogeneity in financial development benefits. Retained financial innovations are structured along three themes, notably: the rural/urban divide, women empowerment and human capital in terms of skills & training. The financial instruments are articulated with case studies, innovations and investment strategies with particular emphasis, inter alia on: informal finance, microfinance, mobile banking, crowdfunding , Islamic finance, remittances, Payment for Environmental Services (PES) and the Diaspora Investment in Agriculture (DIA) initiative. |
682. | Asongu, Simplice A Rational Asymmetric Development, Piketty and the Spirit of Poverty in Africa 2015. Abstract | Links | BibTeX | Tags: Capital flight, Development, Foreign aid, Inequality, Piketty @workingpaper{Asongu2015b_35, title = {Rational Asymmetric Development, Piketty and the Spirit of Poverty in Africa}, author = {Simplice A Asongu}, editor = {African 2015 Governance and Development Institute WP/15/006}, url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Rational-Asymmetric-Development-Piketty-and-the-Spirit-of-Poverty-in-Africa.pdf}, year = {2015}, date = {2015-03-01}, abstract = {The study extends the implications of Piketty’s celebrated literature from developed countries to the nexus between developed nations and African countries by building on responses from Rogoff (2014) & Stiglitz (2014), post Washington Consensus paradigms and underpinnings from Solow-Swan & Boyce-Fofack-Ndikumana. The central argument presented is that the inequality problem is at the heart of rational asymmetric development between rich and poor countries. Piketty has shown that inequality increases when the return of capital is higher than the growth rate, because the poor cannot catch-up with the rich. We argue that, when the return of political economy (or capitalism-fuelled illicit capital flight) is higher than the growth rate in African countries, inequality in development increases and African may not catch-up with the developed world. As an ideal solution, Piketty has proposed progressive income taxation based on automatic exchange of bank information. The ideal analogy proposed in tackling the spirit of African poverty is a holistic commitment to fighting illicit capital flight based on automatic exchange of bank information. Hence, contrary to theoretical underpinnings of exogenous growth models, catch-up may not be so apparent. Implications for the corresponding upward bias in endogenous development and catch-up literature are discussed.}, keywords = {Capital flight, Development, Foreign aid, Inequality, Piketty}, pubstate = {published}, tppubtype = {workingpaper} } The study extends the implications of Piketty’s celebrated literature from developed countries to the nexus between developed nations and African countries by building on responses from Rogoff (2014) & Stiglitz (2014), post Washington Consensus paradigms and underpinnings from Solow-Swan & Boyce-Fofack-Ndikumana. The central argument presented is that the inequality problem is at the heart of rational asymmetric development between rich and poor countries. Piketty has shown that inequality increases when the return of capital is higher than the growth rate, because the poor cannot catch-up with the rich. We argue that, when the return of political economy (or capitalism-fuelled illicit capital flight) is higher than the growth rate in African countries, inequality in development increases and African may not catch-up with the developed world. As an ideal solution, Piketty has proposed progressive income taxation based on automatic exchange of bank information. The ideal analogy proposed in tackling the spirit of African poverty is a holistic commitment to fighting illicit capital flight based on automatic exchange of bank information. Hence, contrary to theoretical underpinnings of exogenous growth models, catch-up may not be so apparent. Implications for the corresponding upward bias in endogenous development and catch-up literature are discussed. |
683. | EFOBI, Simplice ASONGU & Ibukun BEECROFT Uchenna Foreign Direct Investment, Aid and Terrorism: Empirical Insight Conditioned on Corruption Control 2015. Abstract | Links | BibTeX | Tags: Foreign investment; Foreign aid; Terrorism @workingpaper{EFOBI2015, title = {Foreign Direct Investment, Aid and Terrorism: Empirical Insight Conditioned on Corruption Control}, author = {Simplice ASONGU & Ibukun BEECROFT Uchenna EFOBI}, editor = {African 2015 Governance and Development Institute WP/15/007}, url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Foreign-Direct-Investment,-Aid,-Terrorism-and-corruption-control.pdf}, year = {2015}, date = {2015-03-01}, abstract = {This study checks the effect of foreign aid on terrorism and FDI, conditioned on domestic levels of corruption-control (CC). The empirical evidence is based on a sample of 78 countries for the period 1984-2008. The following findings are established: the negative effect of terrorism on FDI is apparent only in higher levels of CC; foreign aid dampens the negative effect of terrorism on FDI only in higher levels of CC; when foreign aid is subdivided into its bilateral and multilateral components, the result is mixed. While our findings are in accordance with the stance that bilateral aid is effective in reducing the adverse impact of transnational terrorism, the position that only multilateral aid is effective at mitigating the adverse impact of domestic terrorism on FDI is not confirmed because multilateral aid also curbs the adverse effect of transnational terrorism on FDI. Moreover, multilateral aid also decreases the adverse effect of unclear and total terrorisms on FDI. Policy implications are discussed.}, keywords = {Foreign investment; Foreign aid; Terrorism}, pubstate = {published}, tppubtype = {workingpaper} } This study checks the effect of foreign aid on terrorism and FDI, conditioned on domestic levels of corruption-control (CC). The empirical evidence is based on a sample of 78 countries for the period 1984-2008. The following findings are established: the negative effect of terrorism on FDI is apparent only in higher levels of CC; foreign aid dampens the negative effect of terrorism on FDI only in higher levels of CC; when foreign aid is subdivided into its bilateral and multilateral components, the result is mixed. While our findings are in accordance with the stance that bilateral aid is effective in reducing the adverse impact of transnational terrorism, the position that only multilateral aid is effective at mitigating the adverse impact of domestic terrorism on FDI is not confirmed because multilateral aid also curbs the adverse effect of transnational terrorism on FDI. Moreover, multilateral aid also decreases the adverse effect of unclear and total terrorisms on FDI. Policy implications are discussed. |
684. | Asongu, Simplice A 2015. Abstract | Links | BibTeX | Tags: Foreign aid; Piketty; Kuznets; Development @workingpaper{Asongu2015b_36, title = {Reinventing foreign aid for inclusive and sustainable development: Kuznets, Piketty and the great policy reversal}, author = {Simplice A Asongu}, editor = {African 2015 Governance and Development Institute WP/15/008}, url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Reinventing-foreign-aid-for-inclusive-and-sustainable-development.Piketty,Kuznets.pdf}, year = {2015}, date = {2015-03-01}, abstract = {This survey essay reviews over 200 papers in arguing that in order to achieve sustainable and inclusive development, foreign aid should not orient developing countries towards industrialisation in the perspective of Kuznets but in the view of Piketty. Abandoning the former’s view that inequality will fall with progress in industrialisation and placing more emphasis on inequality in foreign aid policy will lead to more sustainable development outcomes. Inter alia: mitigate short-term poverty; address concerns of burgeoning population growth; train recipient governments on inclusive development; fight corruption and mismanagement and; avoid the shortfalls of celebrated Kuznets’ conjectures. We discuss how the essay addresses post-2015 development challenges and provide foreign aid policy instruments with which discussed objectives can be achieved. In summary, the essay provides useful policy measures to avoid past pitfalls. ‘Output may be growing, and yet the mass of the people may be becoming poorer’ (Lewis, 1955). ‘Lewis led all developing countries to water, proverbially speaking, some African countries have so far chosen not to drink’ (Amavilah, 2014). Piketty (2014) has led all developing countries to the stream again and a challenging policy syndrome of our time is how foreign aid can help them to drink.}, keywords = {Foreign aid; Piketty; Kuznets; Development}, pubstate = {published}, tppubtype = {workingpaper} } This survey essay reviews over 200 papers in arguing that in order to achieve sustainable and inclusive development, foreign aid should not orient developing countries towards industrialisation in the perspective of Kuznets but in the view of Piketty. Abandoning the former’s view that inequality will fall with progress in industrialisation and placing more emphasis on inequality in foreign aid policy will lead to more sustainable development outcomes. Inter alia: mitigate short-term poverty; address concerns of burgeoning population growth; train recipient governments on inclusive development; fight corruption and mismanagement and; avoid the shortfalls of celebrated Kuznets’ conjectures. We discuss how the essay addresses post-2015 development challenges and provide foreign aid policy instruments with which discussed objectives can be achieved. In summary, the essay provides useful policy measures to avoid past pitfalls. ‘Output may be growing, and yet the mass of the people may be becoming poorer’ (Lewis, 1955). ‘Lewis led all developing countries to water, proverbially speaking, some African countries have so far chosen not to drink’ (Amavilah, 2014). Piketty (2014) has led all developing countries to the stream again and a challenging policy syndrome of our time is how foreign aid can help them to drink. |
685. | Asongu, Simplice A Drivers of Growth in Fast Emerging Economies: A Dynamic Instrumental Quantile Approach 2015. Abstract | Links | BibTeX | Tags: Economic Growth; Emerging countries; Quantile regression @workingpaper{Asongu2015b_37, title = {Drivers of Growth in Fast Emerging Economies: A Dynamic Instrumental Quantile Approach}, author = {Simplice A Asongu}, editor = {African 2015 Governance and Development Institute WP/15/009}, url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Drivers-of-Growth-in-Fast-Emerging-Economies.An-instrumental-quantile-approach.pdf}, year = {2015}, date = {2015-03-01}, abstract = {This study complements the scarce literature on growth determinants in fast emerging economies of the BRICS and MINT by assessing the determinants throughout the conditional distributions of the growth rate and real GDP output for the period 2001-2011. An instrumenal variable (IV) quantile regression approach is complemented with Two-Stage-Least Squares and IV Least Absolute Deviations. The instrumentation process is dynamic. The following findings are established. First, while Gross FDI has a negative effect on economic growth, the impact of Net FDI is positive, with a higher magnitude in top quantiles of the distributions. Second, the positive effect of natural resources is more apparent in countries with low initial growth levels. Third, the impact of telecommunications infrastructure is not very significant. Fourth, whereas the incidence of bank credit is positive for GDP growth, it is negative for real GDP output. Fifth, while trade openness is positive in bottom quantiles of GDP growth, but for the highest quantile in real GDP output, it is consistently negative on real GDP output. Sixth, while the incidence of political stability is negative on GDP growth, it is positive on real GDP output, with the negative (positive) effect apparent only in top (bottom) quantiles of GDP growth (real GDP output). Policy implications are discussed.}, keywords = {Economic Growth; Emerging countries; Quantile regression}, pubstate = {published}, tppubtype = {workingpaper} } This study complements the scarce literature on growth determinants in fast emerging economies of the BRICS and MINT by assessing the determinants throughout the conditional distributions of the growth rate and real GDP output for the period 2001-2011. An instrumenal variable (IV) quantile regression approach is complemented with Two-Stage-Least Squares and IV Least Absolute Deviations. The instrumentation process is dynamic. The following findings are established. First, while Gross FDI has a negative effect on economic growth, the impact of Net FDI is positive, with a higher magnitude in top quantiles of the distributions. Second, the positive effect of natural resources is more apparent in countries with low initial growth levels. Third, the impact of telecommunications infrastructure is not very significant. Fourth, whereas the incidence of bank credit is positive for GDP growth, it is negative for real GDP output. Fifth, while trade openness is positive in bottom quantiles of GDP growth, but for the highest quantile in real GDP output, it is consistently negative on real GDP output. Sixth, while the incidence of political stability is negative on GDP growth, it is positive on real GDP output, with the negative (positive) effect apparent only in top (bottom) quantiles of GDP growth (real GDP output). Policy implications are discussed. |
686. | Asongu, Simplice A 2015. Abstract | Links | BibTeX | Tags: Economic Growth; emerging countries; governance @workingpaper{Asongu2015b_38, title = {Determinants of Growth in Fast Developing Countries: Evidence from Bundling and Unbundling Institutions}, author = {Simplice A Asongu}, editor = {African 2015 Governance and Development Institute WP/15/010}, url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Determinants-of-Growth-in-Fast-Developing-Countries.-Evidence-from-Bundling-and-Unbundling-Institutions.pdf}, year = {2015}, date = {2015-03-01}, abstract = {Purpose – We assess growth determinants in the BRICS (Brazil, Russia, India, China and South Africa) and MINT (Mexico, Indonesia, Nigeria and Turkey) fast-developing nations for the period 2001-2011. Particular emphasis is laid on the bundling and unbundling of ten governance dynamics. Design/methodology/approach- Contemporary and non-contemporary Fixed- and Random-Effects regressions are employed as empirical strategies. GDP growth and real GDP output are used as dependent variables. The governance variables are bundled by means of principal component analysis. Findings- The following are some findings. First, governance is more positively significant in non-contemporary specifications as opposed to contemporary regressions. Second, there is some interesting evidence on the heterogeneity of political governance as a driver. Political governance and its constituents (political stability and voice & accountability) are significantly positive in GDP growth but insignificant in real GDP output regressions. Third, the other governance dynamics are more significant determinants of real GDP output, as opposed to GDP growth. Accordingly, they are insignificant in contemporary regressions and negatively significant in non-contemporary regressions for GDP growth. Fourth, the constituents of economic governance have the highest magnitude in the positive effects of governance dynamics on real GDP output. Practical implications- The following are some practical implications. First, lag determinants are necessary for growth targeting or timing of growth dynamics. Growth drivers for the most part are more significantly determined by past information. Second, political governance is the most important driver of economic growth, with the significance of effects more apparent in non-contemporary regressions. Third, economic governance and institutional governance are more positively predisposed to driving real GDP output than GDP growth. Originality/value- As far as we have reviewed, it is the first study to investigate growth determinants in the BRICS and MINT nations. It has strong implications for other developing countries on the contemporary and non-contemporary dynamics of governance in driving economic prosperity.}, keywords = {Economic Growth; emerging countries; governance}, pubstate = {published}, tppubtype = {workingpaper} } Purpose – We assess growth determinants in the BRICS (Brazil, Russia, India, China and South Africa) and MINT (Mexico, Indonesia, Nigeria and Turkey) fast-developing nations for the period 2001-2011. Particular emphasis is laid on the bundling and unbundling of ten governance dynamics. Design/methodology/approach- Contemporary and non-contemporary Fixed- and Random-Effects regressions are employed as empirical strategies. GDP growth and real GDP output are used as dependent variables. The governance variables are bundled by means of principal component analysis. Findings- The following are some findings. First, governance is more positively significant in non-contemporary specifications as opposed to contemporary regressions. Second, there is some interesting evidence on the heterogeneity of political governance as a driver. Political governance and its constituents (political stability and voice & accountability) are significantly positive in GDP growth but insignificant in real GDP output regressions. Third, the other governance dynamics are more significant determinants of real GDP output, as opposed to GDP growth. Accordingly, they are insignificant in contemporary regressions and negatively significant in non-contemporary regressions for GDP growth. Fourth, the constituents of economic governance have the highest magnitude in the positive effects of governance dynamics on real GDP output. Practical implications- The following are some practical implications. First, lag determinants are necessary for growth targeting or timing of growth dynamics. Growth drivers for the most part are more significantly determined by past information. Second, political governance is the most important driver of economic growth, with the significance of effects more apparent in non-contemporary regressions. Third, economic governance and institutional governance are more positively predisposed to driving real GDP output than GDP growth. Originality/value- As far as we have reviewed, it is the first study to investigate growth determinants in the BRICS and MINT nations. It has strong implications for other developing countries on the contemporary and non-contemporary dynamics of governance in driving economic prosperity. |
687. | Asongu, John Ssozi Simplice A Sino-African relations: some solutions and strategies to the policy syndromes 2015. Abstract | Links | BibTeX | Tags: Economic relations; China; Africa @workingpaper{Asongu2015b_39, title = {Sino-African relations: some solutions and strategies to the policy syndromes}, author = {John Ssozi Simplice A. Asongu}, editor = {African 2015 Governance and Development Institute WP/15/013}, url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Sino-African-relations.some-solutions-and-strategies-to-the-policy-syndromes.pdf}, year = {2015}, date = {2015-03-01}, abstract = {We survey about 110 recently published studies on Sino-African relations; put some structure on the documented issues before suggesting some solutions and strategies to the identified policy syndromes. The documented issues classified into eight main strands include, China: targeting nations with abundant natural resources; focusing on countries with bad governance; not hiring local workers; outbidding other countries by flouting environmental and social standards; importing workers that do not integrate into domestic society and living in extremely simple conditions; exhibiting low linkages between her operations and local businesses; exporting low quality products to Africa; and the emergence of China hindering Africa’s development.}, keywords = {Economic relations; China; Africa}, pubstate = {published}, tppubtype = {workingpaper} } We survey about 110 recently published studies on Sino-African relations; put some structure on the documented issues before suggesting some solutions and strategies to the identified policy syndromes. The documented issues classified into eight main strands include, China: targeting nations with abundant natural resources; focusing on countries with bad governance; not hiring local workers; outbidding other countries by flouting environmental and social standards; importing workers that do not integrate into domestic society and living in extremely simple conditions; exhibiting low linkages between her operations and local businesses; exporting low quality products to Africa; and the emergence of China hindering Africa’s development. |
688. | Asongu, Rangan Gupta Simplice A Trust and Quality of Growth: A Note 2015. Abstract | Links | BibTeX | Tags: Trust; Inclusive Growth; Conditional Effects @workingpaper{Asongu2015b_40, title = {Trust and Quality of Growth: A Note}, author = {Rangan Gupta Simplice A. Asongu}, editor = {African 2015 Governance and Development Institute WP/15/026}, url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Trust-and-Quality-of-Growth.-A-Note.pdf}, year = {2015}, date = {2015-03-01}, abstract = {The transition from Millennium Development Goals (MDGs) to Sustainable Development Goals (SDGs) has substantially shifted the policy debate from growth to inclusive growth. In this short note, we revisit the trust-growth nexus by exploiting a dataset on quality of growth (QG), recently made available to the scientific community. The empirical evidence is based on interactive contemporary and non-contemporary quantile regressions. Inequality and human development modifying variables are used as additional controls. The findings broadly support the positive role of trust in QG. In addition, relatively high thresholds of inequality are needed to change this positive trust-QG nexus in some distributions.}, keywords = {Trust; Inclusive Growth; Conditional Effects}, pubstate = {published}, tppubtype = {workingpaper} } The transition from Millennium Development Goals (MDGs) to Sustainable Development Goals (SDGs) has substantially shifted the policy debate from growth to inclusive growth. In this short note, we revisit the trust-growth nexus by exploiting a dataset on quality of growth (QG), recently made available to the scientific community. The empirical evidence is based on interactive contemporary and non-contemporary quantile regressions. Inequality and human development modifying variables are used as additional controls. The findings broadly support the positive role of trust in QG. In addition, relatively high thresholds of inequality are needed to change this positive trust-QG nexus in some distributions. |
689. | Asongu, Vanessa Tchamyou Simplice S A Journal of Entrepreneurship in Emerging Economies, 8 (1), pp. 101 - 131, 2015. Abstract | Links | BibTeX | Tags: Africa, Development, Entrepreneurship, Knowledge economy @article{Asongu_662, author = {Vanessa Tchamyou S Simplice A. Asongu}, url = {http://dx.doi.org/10.1108/JEEE-08-2015-0045}, doi = {10.1108/JEEE-08-2015-0045}, year = {2015}, date = {2015-02-05}, journal = {Journal of Entrepreneurship in Emerging Economies}, volume = {8}, number = {1}, pages = {101 - 131}, abstract = {Purpose – This paper aims to assess how entrepreneurship affects knowledge economy (KE) in Africa. Design/methodology/approach – Entrepreneurship is measured by indicators of starting, doing and ending business. The four dimensions of the World Bank’s index of KE are used. Instrumental variable panel-fixed effects are applied on a sample of 53 African countries for the period of 1996-2010. Findings – The following are some of the findings. First, creating an enabling environment for starting business can substantially boost most dimensions of KE. Second, doing business through mechanisms of trade globalization has positive effects from sectors that are not information and communication technology (ICT) and high-tech oriented. Third, the time required to end business has negative effects on KE. Practical implications – The findings confirm the narrative that the technology in African countries at the moment may be more imitative and adaptive for reverse engineering in ICTs and high-tech products. Given the massive consumption of ICT and high-tech commodities in Africa, the continent has to start thinking of how to participate in the global value chain of producing what it consumes. Originality/value – This paper has a twofold motivation. First, given the ambitions of African countries of moving towards knowledge-based economies, the line of inquiry is timely. Second, investigating the nexus may have substantial poverty mitigation and sustainable development implications. These entail, inter alia, the development of technology with value-added services; enhancement of existing agricultural practices; promotion of conditions that are essential for competitiveness; and adjustment to globalization challenges.}, keywords = {Africa, Development, Entrepreneurship, Knowledge economy}, pubstate = {published}, tppubtype = {article} } Purpose – This paper aims to assess how entrepreneurship affects knowledge economy (KE) in Africa. Design/methodology/approach – Entrepreneurship is measured by indicators of starting, doing and ending business. The four dimensions of the World Bank’s index of KE are used. Instrumental variable panel-fixed effects are applied on a sample of 53 African countries for the period of 1996-2010. Findings – The following are some of the findings. First, creating an enabling environment for starting business can substantially boost most dimensions of KE. Second, doing business through mechanisms of trade globalization has positive effects from sectors that are not information and communication technology (ICT) and high-tech oriented. Third, the time required to end business has negative effects on KE. Practical implications – The findings confirm the narrative that the technology in African countries at the moment may be more imitative and adaptive for reverse engineering in ICTs and high-tech products. Given the massive consumption of ICT and high-tech commodities in Africa, the continent has to start thinking of how to participate in the global value chain of producing what it consumes. Originality/value – This paper has a twofold motivation. First, given the ambitions of African countries of moving towards knowledge-based economies, the line of inquiry is timely. Second, investigating the nexus may have substantial poverty mitigation and sustainable development implications. These entail, inter alia, the development of technology with value-added services; enhancement of existing agricultural practices; promotion of conditions that are essential for competitiveness; and adjustment to globalization challenges. |
690. | Asongu, Jacinta Nwachukwu Simplice C A 2015. Abstract | Links | BibTeX | Tags: emerging countries, Foreign direct investment, governance @workingpaper{Asongu2015_41, title = {Drivers of FDI in Fast Growing Developing Countries: Evidence from Bundling and Unbundling Governance}, author = {Jacinta Nwachukwu C Simplice A. Asongu}, editor = {AFRICAN GOVERNANCE and DEVELOPMENT INSTITUTE}, url = {http://afridev.org/wp-content/uploads/2016/04/Drivers-of-FDI-in-Fast-Growing-Developing-Countries.-Evidence-from-Bundling-and-Unbundling-Governance.pdf}, year = {2015}, date = {2015-02-02}, abstract = {We assess drivers of FDI in a panel of BRICS and MINT countries for the period 2001-2011. We bundle and unbundle governance determinants using a battery of contemporary and non-contemporary estimation techniques. The following findings are established. First, for both contemporary and non-contemporary specifications, while determinants for gross FDI are significant, they are not for net FDI. Second, for contemporary specifications, the significance of the governance dynamics is as follows in increasing order of magnitude: general governance, political governance, economic governance, political stability, regulation quality and government effectiveness. The motivation to bundle governance variables is articulated by the effect of political governance. Third, for non-contemporary specifications, the significance of governance variables is as follows in ascending order of magnitude: economic governance, institutional governance, general governance, corruption-control, political governance and political stability. The importance of combining governance indicators is captured by the effects of political governance, economic governance and institutional governance. The results indicate that the simultaneous implementation of the various components of governance clarifies a country’s attractiveness for FDI location. Policy implications are discussed with particular emphasis on the timing of FDI and its targeting.}, keywords = {emerging countries, Foreign direct investment, governance}, pubstate = {published}, tppubtype = {workingpaper} } We assess drivers of FDI in a panel of BRICS and MINT countries for the period 2001-2011. We bundle and unbundle governance determinants using a battery of contemporary and non-contemporary estimation techniques. The following findings are established. First, for both contemporary and non-contemporary specifications, while determinants for gross FDI are significant, they are not for net FDI. Second, for contemporary specifications, the significance of the governance dynamics is as follows in increasing order of magnitude: general governance, political governance, economic governance, political stability, regulation quality and government effectiveness. The motivation to bundle governance variables is articulated by the effect of political governance. Third, for non-contemporary specifications, the significance of governance variables is as follows in ascending order of magnitude: economic governance, institutional governance, general governance, corruption-control, political governance and political stability. The importance of combining governance indicators is captured by the effects of political governance, economic governance and institutional governance. The results indicate that the simultaneous implementation of the various components of governance clarifies a country’s attractiveness for FDI location. Policy implications are discussed with particular emphasis on the timing of FDI and its targeting. |