Foreign Direct Investment And Poverty Reduction

Mercy T. Magombeyi; Nicholas M. Odhiambo

doi:10.1515/cer-2017-0013

Authors

Mercy T. Magombeyi University of South Africa, Economics Department
Nicholas M. Odhiambo

DOI:

https://doi.org/10.1515/cer-2017-0013

Keywords:

Foreign direct investment, poverty reduction, dynamic impact

Abstract

This paper provides a detailed survey of the literature on the impact of foreign direct investment (FDI) on poverty reduction, outlining the theoretical and empirical relationship between these variables. Although a number of studies have been done on the impact of FDI on poverty reduction, the majority of these studies have focused on the indirect impact of FDI on poverty reduction. The bulk of the literature reviewed supports the positive effects of foreign direct investment on poverty reduction, although a few studies have also found foreign direct investment to have an adverse or insignificant effect on poverty reduction. This study differs fundamentally from previous studies in that it focuses on the direct impact of FDI on poverty reduction, giving a detailed review of the nature of this relationship.

Downloads

Download data is not yet available.

References

Akinmulegun S.O. (2012), Foreign direct investment and standard of living in Nigeria, ‘Journal of Applied Finance and Banking’, no. 2(3).
Google Scholar

Alfaro L., Kalemli-Ozcan S. and Sayek S. (2009), FDI, Productivity and Financial Development. ‘The World Economy’. doi: 10.1111/j.1467-9701.2008.01159.x.
Google Scholar

Ali M., Nishat M. and Anwar T. (2010), Do foreign inflows benefit Pakistan poor?, ‘The Pakistan Development Review’, no. 48 (4).
Google Scholar

Bharadwaj A. (2014), Reviving the globalisation and poverty debate: Effects of real and financial integration on the developing world, ‘Advances in Economics and Business’ no. 2(1).
Google Scholar

Borensztein E., De Gregorio J. and Lee J.W. (1998), How does foreign direct investment affect economic growth?, ‘Journal of International Economics’, no. 45.
Google Scholar

Calvo C.C. and Hernandez M.A. (2006), Foreign direct investment and poverty in Latin America, Leverhulme Centre for Research on Globalisation and Economic Policy, University of Nottingham.
Google Scholar

Chang H. (2003), Trade and Industrial Policy Issues, [in:] Ha Joon (eds) Rethinking Development Economics, London, Anthem Press.
Google Scholar

De Mello L.R. Jr, (1999), Foreign direct investment-led growth: Evidence from time series and panel data, ‘Oxford Economic Papers’, no. 51.
Google Scholar

Farole T. and Winkler D. (2012), Foreign Firm Characteristics, Absorption Capacity and The Institutional Framework: The Role of Mediating Factors For Foreign Direct Investment Spillovers in Low and Middle Income Countries. ‘Policy Research Working Paper’ 6265. World Bank, Washington, DC.
Google Scholar

Fowowe B. and Shuaibu M.I. (2014), Is foreign direct investment good for the poor? New evidence from African Countries. ‘Eco Change Restruct’, no. 47.
Google Scholar

Gohou G. and Soumare I. (2012), Does foreign direct investment reduce poverty in Africa and are there regional differences, ‘World Development’, no. 40(1).
Google Scholar

Gorg H. and Greenaway D. (2004), Much ado about nothing? Do domestic firms really benefit from foreign direct investment? ‘The World Bank Research Observer’, no. 19(2).
Google Scholar

Huang C., Teng K. and Tsai P. (2010), Inward and outward foreign direct investment and poverty reduction: East Asia versus Latin America, ‘Review of World Economics’, no. 146 (4).
Google Scholar

Hung T.T. (1999), Impact of Foreign Direct Investment on Poverty Reduction in Vietnam, IDS Program, GRIPS.
Google Scholar

Israel A.O. (2014), Impact of foreign direct investment on poverty reduction in Nigeria, ‘Journal of Economics and Sustainable Development’, no. 5(20).
Google Scholar

Jalilian H. and Weiss J. (2002), Foreign direct investment and poverty in the ASEAN region, ‘ASEAN Economic Bulletin’, no. 19(3).
Google Scholar

Kemeny T. (2010), Does foreign direct investment drive technological upgrading?, ‘World Development’, no. 38 (11).
Google Scholar

Klein M., Aaron C. and Hadjimichael B. (2001), Foreign Direct Investment and Poverty Reduction. ‘Policy Research Working Paper 2613’, World Bank.
Google Scholar

Liu X., Wang C. and Wei Y. (2009), Do local manufacturing firms benefit from transactional linkages with multinational enterprises in China?, ‘Journal International Business Studies’, no. 40 (7).
Google Scholar

Mahmood H. and Chaudhary A.R. (2012), A contribution of foreign direct investment in poverty reduction in Pakistan, ‘Middle East Journal of Scientific Research’ no. 12(2).
Google Scholar

Meyer K.E. and Sinani E. (2009), When and where does foreign direct investment generate positive spillover? A meta-analysis, ‘Journal of International Business Studies’, no. 40 (7).
Google Scholar

Meyer K.E. (2004), Perspectives on Multinational enterprises in emerging economies, ‘Journal of International Business Studies’, no. 35(4).
Google Scholar

Ogunniyi M.B. and Igberi C.O. (2014), The impact of foreign direct investment on poverty reduction in Nigeria. ‘Journal of Economics and Sustainable Development’, no. 5(14).
Google Scholar

Reiter S.L. and Steensma H.K. (2010), Human development and foreign direct investment in developing countries: the influence of foreign direct investment policy and corruption, ‘World Development’, no. 38 (12).
Google Scholar

Shamim A., Azeem P. and Naqvi M.A. (2014), Impact of foreign direct investment on poverty reduction in Pakistan, ‘International Journal of Academic Research in Business and Social Sciences’, no 4(10).
Google Scholar

Soumare I. (2015), Does Foreign Direct Investment Improve Welfare in North Africa? Africa Development Bank.
Google Scholar

Sumner A. (2005), Is foreign direct investment good for the poor? A review and stocktake, ‘Development in Practice’, no. 15 (3/4).
Google Scholar

Tsai P. and Huang C. (2007), Openness, growth and poverty: The case of Taiwan, World Development, no. 35(11).
Google Scholar

Ucal M.S. (2014), Panel data analysis of foreign direct investment and poverty from the perspective of developing countries, ‘Social and Behavioral Science’, no. 109.
Google Scholar

United Nations 2015, Millennium Development Goals Report, United Nations.
Google Scholar

Uttama N.P. (2015), Foreign Direct Investment and Poverty Reduction Nexus in South East Asia, [in:] Silber J., Poverty Reduction Policies and Practices in Developing Asia.
Google Scholar

Wang J. and Blomstrom M. (1992), Foreign direct investment and technology transfer: A simple model, ‘European Economic Review’, no. 36 (1).
Google Scholar

Zaman K.. Khan M.M. and Ahmad M. (2012), The relationship between foreign direct investment and pro-poor growth policies in Pakistan: The new interface, ‘Economic Modelling’, no. 29.
Google Scholar