Loading...
|
Please use this identifier to cite or link to this item:
https://nccur.lib.nccu.edu.tw/handle/140.119/36748
|
| Title: | Foreign Direct Investment and its Implications for Economic Growth and Poverty Alleviation in Southern Africa |
| Authors: | Gladys Chimpokosera |
| Contributors: | Yen,Chen-shen
Gladys Chimpokosera |
| Keywords: | Foreign Direct Investment
Implications for Economic Growth
Poverty Alleviation |
| Date: | 2002 |
| Issue Date: | 2009-09-18 19:26:24 (UTC+8) |
| Abstract: | One of the most visible indicators of the increasing global integration of the world economy over the past decade or so has been the phenomenal growth of Foreign Direct Investment (FDI) flows and expansion of cross-border activities of multinational enterprises. FDI inflows are considered as channels of entrepreneurship, technology, management skills, and resources that are scarce in developing countries and Southern Africa in particular. Recent developments in growth theory highlight the importance of improvements in technology, efficiency and productivity in simulating growth. In this regard, FDI’s contribution to growth comes through its role as a conduit for transferring its advanced technology from the industrialized to the developing economies and as such FDI inflows could help in the industrialization of the host countries. For instance, Findlay (1978) postulates that FDIs increases the rate of technical progress in the host country through a “contagion” effect from the more advanced technology and management practices used by foreign firms.
Since FDI is said to be the most stable source of private capital for developing and transition economies, attracting FDI is at the top of the agenda of such economies around the world as they aim to reduce poverty that is deep and widespread.
The paper will look at FDI and its contributions; discuss the relationship between FDI and economic growth; explore the determinants of FDI and economic growth; consider the implications of FDI to economic growth and poverty alleviation; examine Taiwan’s experience when its development was closer to current levels in Africa and Southern Africa in particular; and explore how the Southern African region can attain economic growth through FDI and alleviate its deep and widespread poverty. In trying to assess the extent to which FDI contributes to construction of production facilities, infusion of innovative technologies, management strategies, workforce practices, new employment, and skill transfer, the paper seeks to shed light on appropriate policies to pursue in order to encourage high volumes of FDI and their likely implications for economic growth and poverty alleviation.
While economic growth is not synonymous with economic development, it is at least necessary. Provided that mechanisms exist to facilitate some trickle-down of the benefits of economic growth to the impoverished, economic growth can aid in poverty reduction. The most important mechanism by which trickle-down occurs is via employment-creating economic growth. In this way, it is possible that, if FDI serves as a catalyst for economic growth, it will stimulate development and contribute to alleviating poverty (Lipsey, R., 2000).
David Dollar (2001) states that Globalization has been a force for growth and poverty reduction in a diverse group of countries and defines globalization as the growing integration of economies and societies around the world as a result of flows of goods and services, capital, people, and ideas. He claims that integration accelerates development and reduces gaps between the developed and developing countries by raising productivity in the developing world. In this way globalization can be a powerful force for poverty reduction. FDI is one element that links the Southern part of Africa to the global economy and as a World Bank report (2001) shows that rapid economic growth and poverty reduction are positive aspects of globalization, the volume of FDI attracted will have an influence on whether the Southern Africa’s poor can benefit from the globalization of markets.
Table 1: Foreign Direct Investments Before and After Regional Integration Arrangements in per cent of GDP……………………………………………………………………….33
Table 2: GDP per capita for SADC Member States in 2002……………………………40
Table 3: Average GDP Growth rate for 1990-1999……………………………………..42
Table 4: GDP Composition of SADC Member States by Sector……………………….44
Table 5: Exports, Imports, Gross Capital Formation and Total Debt Service…………..46
Map
Map of Southern Africa …………………………………………………………………52
Table of Content
Abstract……………………………………………………………………………......i
Acknowledgements…………………………………………………………………...iv List of Tables……………………………………………………………………...…..v
Map………………………………………………………………………………...….v
CHAPTER 1…………………………………………………………………………1
INTRODUCTION…………………………………………………………………....1
CHAPTER 2……………………………………………………….………………...7
LITERATURE REVIEW ON FDI…………………………………………………...7
2.1 Relationship between FDI and Economic Growth………………………...8
2.2 Determinants of FDI……………………………………………………. .16
2.3 Dependency Theory…………………………………………………….. .34
CHAPTER 3………………………………………………………………………. .36
ECONOMIC REALITY OF SOUTHERN AFRICA ……………………………….36
3.1 Major Economic Indices………………………………………………….36
3.2 Major FDI Indices………………………………………………………...47
3.3 Regionalism………………………………………………………………49
CHAPTER 4………………………………………………………………………..66
ECONOMIC AND POLITICAL CONCERNS OF FDI……………………………66
4.1 Dependency School………………………………………………………66
CHAPTER 5………………………………………………………………………. 74
COMPARABLE STUDY: TAIWAN’S EXPERIENCE………………………….. 74
5.1 Preconditions for Industrial Development………………………. ………75
5.2 Policies for Industrial Development in Taiwan ………………………… 79
5.3 The State as Agent………………………………………………………. 85
5.4 Summary of the Comparable Study…………………………….……….. 85
CHAPTER 6……………………………………………………….……………….87
CONCLUSION……………………………………………………….……………. 87
6.1 Measures to be Taken to Ensure Positive Aspects of FDI………………. 87
6.2 Concluding Remarks …………………………………………………. 92
References………………………………………………………………………….. 95
There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in swallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
William Shakespeare, from Julius Caesar |
| Reference: | 1. Agodo, O. (1978), “The Determinants of U.S. Private Manufacturing Investments in Africa,” Journal of International Business Studies, pp. 95-107.
2. Aitken, B., G. H. Hanson and A. Harrison (1997), “Spillovers, Foreign Investment, and Export Behavior,” Journal of International Economics, Vol. 43, pp. 103-132.
3. Arpegis, N. and C. Katrakilidis (1998), “Does Inflation Uncertainty Matter in Foreign Direct Investment Decisions? An Empirical Investigation for Portugal, Spain, and Greece,” Rivisita Internazionale Di Science Economiche E Commerciale, Vol. 45, pp. 729-744
4. Balasubramanyam, V. N., M. Salisu, and D. Sapsford (1996), “Foreign Direct Investment and Growth in EP and IS Countries,” Economic Journal, Vol. 106, pp. 92-105.
5. Balasubramanyam, V. N., M. Salisu, and D. Sapsford (1999), “Foreign Direct Investment as an Engine of Growth,” Journal of Economic Trade and International Development, Vol. 8, No. 1, pp. 27-40.
6. Beamish, P. (1988), Multinational Joint Ventures in Developing Countries. London: Routledge.
7. Bhagwati, J. N. (1978), “Anatomy and Consequences of Exchange Control Regimes” Studies in International Economic Relations, Vol. 1, No. 10, New York: NBER.
8. Billington, N. (1999), “The Location of Foreign Direct Investment: An Empirical Analysis,” Applied Economics, Vol. 31, pp. 65-76.
9. Blomstrom, M. (1986), “Foreign Investment and Productive Efficiency: The Case of Mexico,” Journal of Industrial Economics, Vol. 15, pp. 97-110.
10. Blomstrom, M., S. Globerman, and A. Kokko (2000), The Determinants of Host Country Spillovers From Foreign Direct Investment. New York: Centre for Economic Policy Research, No. 2350.
11. Blomstrom, M., and A. Kokko (1997), Regional Integration and Foreign Direct Investment. New York: NBER Working Paper No. 6019.
93. Stopford, J. and L. T. Wells, Jr. (1972), Managing the Multinational Enterprise, New York: Basic Books.
94. Taiwan Statistical Data Book (1976), Taipei: Council for Economic Planning and Development.
95. Taiwan Statistical Data Book (1989). Taipei: Council for Economic Planning and Development.
96. Todaro, Michael (1997), Economic Development. London: Longman.
97. Trotsenburg Van A. & A. Mac Arthur (1999), The HIPC Initiative: Delivering Debt Relief to Poor Countries. Washington, DC & New York: World Bank and IMF.
98. UNCTC (1991), The Impact of Trade-Related Investment Measures on Trade and Development, New York: United Nations
99. Wheeler, D. and A. Mody (1992), “International Investment Location Decisions: The Case of U.S. Firms,” Journal of International Economics, Vol. 33, pp. 57-76.
100. Woodward, D. P. and R. J. Rolfe, (1993), “The Location of Export-Oriented Foreign Direct Investment in the Caribbean Basin,” Journal of International Business Studies, Vol. 24, pp. 121-144.
101. World Bank (1987), World Development Report. New York: Oxford University Press.
102. World Development Report (1997), Washington, DC: World Bank.
103. www.cia.gov/cia/publications/factbook
104. www.imf.org
105. www.mbendi.co.za
106. www.sadcreview.com
107. www.sadc.int
108. www.worldbank.org
12. Blomstrom, M., A. Kokko and M. Zenjan (1994), “Host Country Competition and Technology Transfer by Multinationals,” Weltwirtschaftliches Archive, Band 130, pp. 521-533.
13. Blomstrom, M., R. E. Lipsey, and M. Zenjan (1994), What Explains Developing Country Growth? New York: NBER Working Paper No. 4132.
14. Borenzstein, E., J. De Gregorio, and J. W. Lee (1995), How Does Foreign Direct Investment Affect Economic Growth? New York: NBER Working Paper No. 5057.
15. Borrus, M. (1994), “Left for Dead: Asian Production Networks and The Revival of U.S. Electronics,” in Japanese Investment in Asia: International Production Strategies in a Rapidly Changing World, ed. by Eileen Doherty. San Francisco: The Asia Foundation and Berkeley Roundtable on International Economics.
16. Bosworth, B. and S. Collins (1999), “Capital Inflows, Investment, and Growth,” Tokyo Club Papers, Vol. 12, pp. 55-72.
17. Branard, S. L. (1997), “An Empirical Assessment of the Proximity-Concentration Trade-Off between Multinational Sales and Trade,” American Economic Review, Vol. 87, No. 4, pp. 520-544.
18. Brautigam, D. A. (1994), “What Can Africa Learn From Taiwan? Political Economy, Industrial Policy, and Adjustment,” Journal of Modern African Studies, Vol. 32, No. 1, pp.111-138.
19. Caves, R. E. (1974), “Multinational Firms, Competition, and Productivity in Host-Country Markets,” Economica, Vol. 41, pp. 176-193.
20. Changes in Agriculture in 26 Developing Nations 1948 to 1963. (1965), New York: U.S. Department of Agriculture.
21. Contractor, F. (1991), Government Policies and Foreign Direct Investment, New York: United Nations Centre for Transnational Corporations, Series A, No. 17.
22. Crowling, Keith and Roger Sugden (1987), Transnational Monopoly Capitalism. New York: Wheatsheaf.
23. Daniels, J. D. and Lee. H. Radebaugh (2001), International Business: Environments and Operations, 9th ed. Englewood Cliffs, NJ: Prentice Hall.
24. Davidson, B. (1983), Modern Africa. New York: Harper Perennial.
25. Debt Relief and Poverty Reduction: Meeting the Challenge (1999). New York: UNICEF and Oxfam International.
26. De Mello, L. R. (1996), Foreign Direct Investment, International Knowledge Transfers, and Endogenous Growth: Time Series Evidence, mimeo. Kent, England: Department of Economics, University of Kent.
27. Dees, S. (1998), “Foreign Direct Investment in China: Determinants and Effects,” Economics of Planning, Vol. 31, pp. 175-194.
28. Dixit, A. K. and R. S. Pindyck (1994), Investment under Uncertainty. Princeton, NJ: Princeton University Press.
29. Dollar, D. (2001), Globalization, Inequality and Poverty Since 1980. New York: World Bank, Development Research Group.
30. Dunning, J. H. (1997), “Trade, Location, Economic Activity, and the MNE: A Search for an Eclectic Approach,” in The International Allocation of Economic Activity, ed. by B. Ohlin, P.O. Hesselborn, and P.M. Wijkman. Proceedings of a Nobel Symposium held in Stockholm, pp. 395-418.
31. Dunning, J. H., (1988), “The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions,” Journal of International Business Studies, Vol. 19, No. 1, pp. 1-31.
32. Education in the Sub-Saharan Africa: Policies for Adjustment, Revitalization, and Expansion (1998). Washington, DC: World Bank.
33. Ekholm, K. (1998), “Proximity Advantages, Scale Economies, and The Location of Production,” in The Geography of Multinational Firms, ed. by P. Braunerhjelm and K. Ekholm, Dordrecht, the Netherlands: Kluwer, pp. 59-76.
34. Ekins, Paul. (1992), A New World Order: Grasshopper Movements for Change. London: Routledge.
35. Ernst, D. (1994), What Are the Limits to The Korean Model? The Korean Electronics Industry under Pressure. Berkeley, CA: University of California at Berkeley, Berkeley Roundtable on the International Economy Research Paper.
36. Estrin, Saul., Kirsty Hughes, Sarah Todd (1997), Foreign Direct Investment in Central and Eastern Europe: Multinationals in Transition. London: Royal Institute of International Affairs.
37. Feenstra, R. C. and G. H. Hanson (1997), “Foreign Direct Investment and Relative Wages: Evidence from Mexico’s Maquiladoras,” Journal of International Economics, Vol. 42, pp. 371-393.
38. Findlay, R. (1978), “Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model,” Quarterly Journal of Economics, Vol. 92, pp. 1-16.
39. Franklin R. Root (1973), International Trade & Investment: Theory, Policy, Enterprise. London: Southern-Western.
40. From Crisis to Sustainable Growth (1988), Washington, DC: World Bank.
41. Fung, K. C., H. Iizaka, J. Lee, and S. Parker (2000), Determinants of U.S. and Japanese Foreign Direct Investment in China, Working Paper No. 456. Santa Cruz, California: University of California at Santa Cruz, Department of Economics.
42. George, Susan (1991), How the Other Half Dies: The Real Reasons for World Hunger. England: Penguin.
43. Gittelman, M. and J. H. Dunning (1992), “Japanese Multinationals in Europe and in the United States: Some Comparisons and Contrasts,” in Multinationals in the New Europe and Global Trade, ed. by M. Klein and P. Welfens. Berlin and Heidelberg: Springer-Verlag.
44. Globerman, S. (1979), “Foreign Direct Investment and Spillover Efficiency Benefits in Canadian Manufacturing Industries,” Canadian Journal of Economics, Vol. 12, pp. 42-56.
45. Imbriani, C. and F. Reganati (1997), “International Efficiency Spillovers into the Italian Manufacturing Sector – English Summary,” Economica Internazionale, Vol. 50, pp. 583-595.
46. International Finance Corporation (1997), Foreign Direct Investment: Lessons of Experience No. 5, Washington, DC: World Bank.
47. Ito, Takatoshi and Anne O. Krueger (2000), The Role of Foreign Direct Investment in East Asian Economic Development. London: University of Chicago Press.
48. Jackman, R. (1982), “Dependence on Foreign Investment and Economic Growth in the Third World,” World Politics, Vol. 34, No. 1, pp. 175-196.
49. Jacoby N. H. (1966), US Aid to Taiwan: A Study of Foreign Aid Self Help in Development. New York, Praeger.
50. Johnston, Bruce F., Allan Hoben and William K. Jaeger (1992), “United States Activities to Promote Agricultural and Rural Development in Sub-Saharan Africa,” in Aid to African Agriculture: Lessons from two Decades of Donors’ Experience, ed. by Uma Lele. London: Harper Collins.
51. Julius, D. A. (1990), Global Companies and Public Policy: The Growing Challenge of Foreign Direct Investment. London: Beihaven.
52. Kaminsky, B. and M. Ribound (1999), Foreign Investment and Restructuring: The Evidence from Hungary. Washington, DC: World Bank.
53. Kawaguchi, Osamu (1994), Foreign Direct Investment in East Asia: Trends, Determinants, and Policy Implications. Washington, DC: World Bank.
54. Kawai, H. (1994), “International Comparative Analysis of Economic Growth: Trade Liberalization and Productivity,” Developing Economies, Vol. 32, pp. 372-397.
55. Kokko, A. (1994), “Technology Market Characteristics, and Spillovers,” Journal of Development Economics, Vol. 43, pp. 279-293.
56. Kokko, A. and M. Blomstrom (1995), “Policies to Encourage Inflows of Technology through Foreign Multinationals,” World Development, Vol. 23, No. 3, pp. 459-468.
57. Kokko, A., R. Tansini, and M. Zejan (1996), “Local Technological Capability and Spillovers from FDI in The Uruguyuan Manufacturing Sector,” Journal of Development Studies, Vol. 34, pp. 602-611.
58. Kravis, I. B. and R. E. Lipsey (1982), “The Location of Overseas Production and Production for Export by U.S. Multinational Firms,” Journal of International Economics, Vol. 12, pp. 201-223.
59. Lall, S. (1980), “Vertical Interfirm Linkages in LDCs: An Empirical Study,” Oxford Bulletin of Economics and Statistics, Vol. 42, pp. 203-223.
60. Lecraw, D. (1991), Factors Influencing FDI in Host Developing Countries: Preliminary Report, in Multinational Enterprises in Less Developed Countries, ed. by P. J. Buckley and J. Clegg. London: Macmillan, pp. 163-180.
61. Linden, G. (1996), Japan and the United States in the Malaysian Electronics Sector. Berkeley, California: Berkeley Roundtable on International Economics.
62. Little, Ian M. D. (1979), “An Economic Reconnaissance,” in The Economic Growth and Structural Change in Taiwan: The Postwar Experience of the Republic of China, ed. by Walter Galenson. New York: Cornell University Press, pp. 448-507
63. Loree, D. W. and S. E. Guisinger (1995), “Policy and Nonpolicy Determinants of U.S. Equity Foreign Direct Investment,” Journal of International Business Studies, Vol. 26, No. 2, pp. 281-299.
64. Lou Anne A. Barclay (2000), Foreign Direct Investment in Emerging Economies: Corporate Strategy and Investment Behavior in the Caribbean. London: Routledge.
65. Mody, A., S. Dasgupta and S. Sinha (1998), “Japanese Multinationals in Asia: Drivers and Attractors,” Oxford Development Studies, Vol. 27, No. 2, pp. 149-164.
66. Moran, T. (1998), Foreign Direct Investment and Development: The New Policy Agenda for Developing Countries and Economies in Transition. Washington, DC: Institute for International Economics.
67. Nadiri, M. I. (1991), Innovations and Technological Spillovers. New York: New York University.
68. Nigh, D. (1986), “Political Events and the Foreign Direct Investment Decision: An Empirical Examination,” Management Decision Economics, Vol. 7, pp. 99-106.
69. Nigh, D. and H. Schollharmer (1987), “Foreign Direct Investment, Political Conflict, and Cooperation: The Asymmetric Response Hypothesis,” Management Decision Economics, Vol. 8, pp. 307-312.
70. Ostry, S. (1997), A New Regime for Foreign Direct Investment. Washington, DC: Group of Thirty.
71. Pain, N. (1997), “Continent Drift: European Integration and the Location of U.K Foreign Direct Investment,” The Manchester School Supplement, Vol. 65, pp. 94-117.
72. Pain, N. and M. Lansbury (1997), “Regional Economic Integration and Foreign Direct Investment: The Case of Germany Investment in Europe,” National Institute Economic Review, No.160, pp. 87-99.
73. Perez Nunez, W. (1990), Foreign Direct Investment and Industrial Development in Mexico. Paris: Organization for Economic Cooperation and Development.
74. Peters, Beverley L. and Gareth Elliot (2000/2001), “Challenges to Political and Economic Development in Africa,” in the South African Yearbook of International Affairs 2000/01, Johannesburg, South Africa: South African Institute of International Affairs, pp. 247-258.
75. Ranis, G. and C. Schive (1985), “Direct Foreign Investment in Taiwan’s Development,” in Foreign Trade and Investment: Economic Development in the Newly Industrializing Asian Countries, ed. by Walter Galenson, New York: Cornell University Press, pp. 85-137.
76. Rasiah, R. (1993), “Free Trade Zones and Industrial Development in Malaysia,” in Industrializing Malaysia: Policy, Performance, Prospects, ed. by K. S. Jomo, London: Routledge.
77. Rasiah, R. (1995), Foreign Capital and Industrialization in Malaysia. New York: St. Martin’s Press.
78. Reuber, G. L., H. Crookell, M. Emerson, G. Gallais-Hamono (1973), Private Foreign Investment in Development, Oxford: Clarendon Press.
79. Riegg, N. (1978), The Role of Fiscal and Monetary Policies in Taiwan’s Economic Development, Ph.D. Dissertation. Storrs, Connecticut: University of Connecticut.
80. Rodrik, Dan., (1990), How Should Structural Adjustment Programmes Be Designed in World Development? New York: World Bank.
81. Root, F. R. and A. A. Ahmed (1978), “The Influence of Policy Instruments on Manufacturing Direct Foreign Investments in Developing Countries,” Journal of International Business Studies, Vol. 9, pp. 81-93.
82. Root, F. R. and A. A. Ahmed (1979), “Empirical Determinants of Manufacturing Direct Foreign Investment in Developing Countries,” Economic Development and Cultural Change, Vol. 27, pp. 751-767.
83. Ruttan, Vernon (1984), “Integrated Rural Development Programmes: A Historical Perspective” World Development, Vol. 12, No. 4, pp. 393-401.
84. SADC Regional Human Development Report (2000), “Challenges Opportunities for Regional Integration,” Southern African Economist, Vol. 14, No. 6, pp. 30-202.
85. Scott, M. (1979), “Foreign Trade,” in Economic Growth and Structural Change in Taiwan: The Postwar Experience in the Republic of China, ed. by Walter Galenson, New York: Cornell University Press, pp. 308-383.
86. Shah, A. (1995), Fiscal Incentives for Investment and Innovation. New York: Oxford University Press.
87. Shatz, H. and A. J. Venables (2000), The Geography of International Investment, New York, Washington, DC: World Bank Policy Research Working Paper No. 2338.
88. Simon, D.F. (1988), “Technology Transfer and National Autonomy,” in Contending Approaches to the Political Economy of Taiwan, ed. by Edwin A. Winckler and Susan Greenhalgh. Armonk, New York: M. E. Sharpe, pp. 206-223.
89. Singh, H. and K. W. Jun (1995), Some New Evidence on Determinants of Foreign Direct Investment in Developing Countries. New York & Washington, DC: World Bank Policy Research Working Paper No. 1531
90. Sjoholmn, F. (1999), “Technology Gap, Competition, and Spillovers from Direct Foreign Investment: Evidence from Establishment Data,” Journal of Development Studies, Vol. 36, No.1, pp. 53-73.
91. Stallings, Barbara., (1990), “The Role of Foreign Capital in Economic Development,” in Manufacturing Miracles: Paths of Industrialization in Latin America and East Asia, ed. by Gary Gereffi and Donald L. Wyman, Princeton, New Jersey: Princeton University Press, pp. 55-85.
92. Stoneman, C. (1975), “Foreign Capital and Economic Growth,” World Development, Vol. 3, No.1, pp. 11-26. |
| Description: | 碩士
國立政治大學
國際經營管理碩士班(IMBA)
91933029
91 |
| Source URI: | http://thesis.lib.nccu.edu.tw/record/#G0091933029 |
| Data Type: | thesis |
| Appears in Collections: | [International MBA] Theses
|
Files in This Item:
| File |
Size | Format | |
|---|
| index.html | 0Kb | HTML2 | 813 | View/Open |
|
All items in 政大典藏 are protected by copyright, with all rights reserved.
|
