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The Effect Of Foreign Direct Investment On Poverty: Panel Regression Analysis For 40 Selected Underdeveloped And Developing Countries

Year 2012, Volume: 21 Issue: 3, 225 - 240, 01.09.2012

Abstract

This study aims at determining the effects of Foreign Direct Investment FDI on the level of poverty in developed and developing countries For this purpose the panel regression method which covers 40 countries’ income distribution data is employed The results show that the poorest segments receive a lower share of the income created by FDI than the richest segments of these countries indicating that FDI does not have a serious contribution to poverty reduction FDI affects the income levels of different income groups in every country however there is not a uniform effect in the countries examined Keywords: Poverty FDI Panel Regression Doğrudan Yabancı Sermaye Yatırımlarının Yoksulluk Üzerindeki Etkisi: Seçilmiş 40 Az Gelişmiş ve Gelişmekte Olan Ülke için Panel Regresyon Analizi Özet Bu çalışmanın amacı doğrudan yabancı sermaye yatırımlarının DYSY az gelişmiş ve gelişmekte olan ülkelerde yoksulluk düzeyini nasıl etkilediğini tespit etmektir Bu amaçla 40 az gelişmiş ve gelişmekte olan ülkenin 10’luk gelir dağılım dilimleri kullanılarak DYSY’nin yoksulluk düzeyini nasıl etkilendiği panel regresyon yöntemiyle belirlenmiştir Panel sonuçlarına göre DYSY ile elde edilen gelirden 1 ve 2 dilimin düşük 9 ve 10 dilimin ise yüksek pay aldığı ortaya çıkmıştır Ülkelerin ortalama gelir gruplarından nasıl farklılaştığını tespit etmek için yapılan ikinci panel regresyon sonuçlarına göre DYSY ülkelerin bir kısmında üst bir kısmında alt ve orta diğer kalan kısımda ise orta gelir gruplarının gelirleri artarken diğerlerininki düşürdüğü sonucu elde edilmiştir Anahtar Kelimeler: Yoksulluk DYSY Panel Regresyon

References

  • Aaron, C. ‗The Contribution of FDI to Poverty Alleviation‘, http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Contribution_of_FDI_to_ Poverty+Alleviation.pdf/$FILE/Contribution+of+FDI+to+Poverty+Alleviation+- +Carl+Aaron.pdf, (Accessed: 04.12.2009).
  • Asiedu, E. (2004) ‗The Determinants of Employment of Affiliates of US Multinational Enterprises in Africa‘, Development Policy Review, 22 (4): 371–379, http://www3.interscience.wiley.com/cgi-bin/fulltext/118790387/PDFSTART,
  • Calvo, C. C. and Hernandez, Marco A. (2006) ‗Foreign Direct Investment and Poverty in Latin America‘, The Globalisation and Economic Policy, Fifth Annual Postgraduate Conference, Leverhulme Centre for Research on Globalisation and Economic http://www.gep.org.uk/shared/shared_levevents/conferences/2006_PG_Marco_H ernandez.pdf, (Accessed: 05.01.2010). of Nottingham, April 21-22,
  • Chudnovsky, D. and Lopez, A. (1999) ‗Globalization and Developing Countries: Foreign Direct Investment and Growth and Sustainable Human Development‘, UNCTAD/UNDP Global Programme on Globalization, Liberalization and Sustainable cenit.org.ar/eng/Descargas/globalization.pdf, (Accessed: 11.03.2010). Development, http://www.fund
  • Dollar, D. and Kraay, A. (2002a) ‗Growth Is Good for the Poor‘, Journal of Economic Growth, http://www.springerlink.com/content/u47r374434v07234/fulltext.pdf, (Accessed: 11.03.2010). 7, (3): 195–225,
  • Dollar, D. and Kraay, A. (2002b) ‗Spreading the Wealth‘, Foreign Affairs, 81, (1): 120– 33, http://www.idia.net/foreignaffairs/IMF5.pdf, (Accessed: 11.03.2010).
  • Gohou, G. and Soumare, I. (2009) ‗Impact of FDI on Poverty Reduction in Africa: Are there Regional Differences?‘,African Economic Conference 2009: Fostering Development in an Era of Financial and Economic Crises, United Nations Conference Centre, Addis Ababa, Ethiopia, 11 – 13 November 2009, http://www.uneca.org/eca_programmes/trade_and_regional_integration/events/A EC/2009/papers/AEC2009ImpactofFDIonPovertyReduction.pdf, 25.02.2010). (Accessed:
  • International Finance Corporation (IFC) (2000) Paths Out Of Poverty: The Role of Private Enterprise in Developing Countries, http://www.ifc.org/ifcext/publications.nsf/AttachmentsByTitle/PathsoutofPoverty English/$FILE/paths_out_of_poverty.pdf, (Accessed: 11.03.2010).
  • Jenkins, C. and Thomas, L. (2002) Foreign Direct Investment in Southern Africa: Determinants, Characteristics and Implications for Economic Growth and Poverty Alleviation, http://www.acp-eu-trade.org/library/files/Jenkins-Carolyn- and-Thomas-Lynn_EN_102002_CSAE-CREFSA_FDI-in-Southern-Africa- Determinants-Characteristics-and-Implications-for-Economic-Growth-and- Poverty-Alleviation.pdf, (Accessed: 22.01.2010).
  • Karim, N. Al-H. A. and Ahmad S. (2009) ‗Foreign Direct Investment: Key to Poverty Reduction in Malaysia‘, The IUP Journal of Applied Economics, 8 (5&6): 55-64, http://web.ebscohost.com/ehost/pdf?vid=2&hid=107&sid=f03f335e-a260-45c5- adf6-02f9efe909d2%40sessionmgr110, (Accessed: 26.02.2010).
  • Mason, A. D. and J. Baptist, (1996) How Important Are Labor Markets To The Welfare Of Indonesia's Poor?, World Bank Policy Research Working Paper: 1665, http://www- wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/1996/10/01/00 0009265_3961214163425/additional/126526322_20041117180617.pdf,
  • Mirza, Hafiz and Giroud, A. (2004) ‗Regionalization, Foreign Direct Investment and Poverty Reduction‘, Journal of the Asia Pacific Economy, 9 (2): 223 — 248, http://pdfserve.informaworld.com/241946_758064766_713703419.pdf, (Accessed: 04.01.2010).
  • Mirza; H. at al (2003) Regionalisation, Foreign Direct Investment and Poverty Reduction: The Case of ASEAN, http://www.research4development.info/PDF/Outputs/Mis_SPC/R7625MAIN_RE PORT.pdf, (Accessed: 04.01.2010).
  • Bradford: University of Bradford,
  • Nguyen, Thi P. H. (2003) ‗Contribution of Foreign Direct Investment to Poverty Reduction: The Case of Vietnam in the 1990s‘, In: Michael Frenkel and Georg Stadtmann (eds.): Foreign Direct Investment: Theory, Empirical Evidence and Policy http://www.zef.de/module/register/media/e086_FDI%20and%20poverty%20in% 20Vietnam%20(Nov.%2002).pdf, (Accessed: 25.02.2010). Un,
  • Shahbaz, M. and AAMIR, N. (2008) ‗Direct Foreign Investment and Income Distribution: A Case Study for Pakistan‘, International Research Journal of Finance http://www.eurojournals.com/irjfe_21_01.pdf, (Accessed: 27.02.2010). Economics, 21: 7–18,
  • Sumner, A. (2005) ‗Is Foreign Direct Investment Good for the Poor? A Review and Stocktake‘, http://web.ebscohost.com/ehost/pdf?vid=2&hid=3&sid=2db318c5-b67a-4696- bb4a-b5ecf57d0290%40sessionmgr10, (Accessed: 25.02.2010). 269–285,
  • Ugur, A. and RUANE, F. (2004) Foreign Direct Investment and Host Country Wages: New Evidence from Irish Plant Level Panel Data, University of Dublin - Institute for http://papers.ssrn.com/sol3/papers.cfm?abstract_id=735444, 07.03.2010). Studies Discussion Paper No: (Accessed:
  • United Nations Conference on Trade and Development (UNCTAD), (1999) World Investment Report: Foreign Direct Investment and the Challenge of Development, 12.03.2010). (Accessed:
  • United Nations Conference on Trade and Development (UNCTAD), (1994); World Investment Report Transnational Corporations, Employment and Workplace, http://www.unctad.org/en/docs/wir1994_en.pdf, (Accessed: 12.03.2010).
  • United Nations (UN) (2009) Rethinking Poverty, Report on the World Social Situation 2010, New York, http://www.un.org/esa/socdev/rwss/docs/2010/fullreport.pdf, (Accessed: 07.03.2010).
  • United Nations Conference on Trade and Development (UNCTAD) FDI Stat (2009) Major http://stats.unctad.org/FDI/TableViewer/tableView.aspx?ReportId=3084, (Accessed: 21.12.2009). Indicators (WIR 2009),
  • United Nations Conference on Trade and Development (UNCTAD), (2010) World Investment http://www.unctad.org/en/docs/wir2010_en.pdf, (Accessed: 28.07.2010).
  • Velde, D. W. te and Morrisey, O. (2002) Foreign Direct Investment: Who Gains?, Overseas http://www.odi.org.uk/resources/download/598.pdf, (Accessed: 08.03.2010)
  • Zhang, K. H. (2006) ‗Does International Investment Help Poverty Reduction in China?‘, http://web.ebscohost.com/ehost/pdf?vid=2&hid=7&sid=b5c8134f-0f6d-46fa- 9113-91b5c789bea1%40sessionmgr110, (Accessed: 05.01.2010) 79–90,
  • Watkins, K. and FOWLER, P. (2002) Rigged Rules and Double Standards: Trade, Globalisation and the Fight Against Poverty, Oxford: Oxfam GB, http://www.oxfam.org.uk/what_we_do/issues/trade/downloads/trade_report.pdf, (Accessed: 27.03.2010). Word Bank, Data on Poverty and Inequality, (Accessed: http://iresearch.worldbank.org/PovcalNet/povcalSvy.html, 07.03.2010).
  • World Bank (2001) World Development Report: Attacking Poverty – 2000/2001, http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,co ntentMDK:20195989~pagePK:148956~piPK:216618~theSitePK:336992,00.html , (Accessed: 22.02.2010).

The Effect Of Foreign Direct Investment On Poverty: Panel Regression Analysis For 40 Selected Underdeveloped And Developing Countries

Year 2012, Volume: 21 Issue: 3, 225 - 240, 01.09.2012

Abstract

Bu çalışmanın amacı, doğrudan yabancı sermaye yatırımlarının (DYSY) az gelişmiş ve gelişmekte olan ülkelerde yoksulluk düzeyini nasıl etkilediğini tespit etmektir. Bu amaçla 40 az gelişmiş ve gelişmekte olan ülkenin %10’luk gelir dağılım dilimleri kullanılarak, DYSY’nin yoksulluk düzeyini nasıl etkilendiği panel regresyon yöntemiyle belirlenmiştir. Panel sonuçlarına göre DYSY ile elde edilen gelirden 1. ve 2. dilimin düşük, 9. ve 10. dilimin ise yüksek pay aldığı ortaya çıkmıştır. Ülkelerin ortalama gelir gruplarından nasıl farklılaştığını tespit etmek için yapılan ikinci panel regresyon sonuçlarına göre DYSY, ülkelerin bir kısmında üst, bir kısmında alt ve orta, diğer kalan kısımda ise orta gelir gruplarının gelirleri artarken, diğerlerininki düşürdüğü sonucu elde edilmiştir

References

  • Aaron, C. ‗The Contribution of FDI to Poverty Alleviation‘, http://www.fias.net/ifcext/fias.nsf/AttachmentsByTitle/Contribution_of_FDI_to_ Poverty+Alleviation.pdf/$FILE/Contribution+of+FDI+to+Poverty+Alleviation+- +Carl+Aaron.pdf, (Accessed: 04.12.2009).
  • Asiedu, E. (2004) ‗The Determinants of Employment of Affiliates of US Multinational Enterprises in Africa‘, Development Policy Review, 22 (4): 371–379, http://www3.interscience.wiley.com/cgi-bin/fulltext/118790387/PDFSTART,
  • Calvo, C. C. and Hernandez, Marco A. (2006) ‗Foreign Direct Investment and Poverty in Latin America‘, The Globalisation and Economic Policy, Fifth Annual Postgraduate Conference, Leverhulme Centre for Research on Globalisation and Economic http://www.gep.org.uk/shared/shared_levevents/conferences/2006_PG_Marco_H ernandez.pdf, (Accessed: 05.01.2010). of Nottingham, April 21-22,
  • Chudnovsky, D. and Lopez, A. (1999) ‗Globalization and Developing Countries: Foreign Direct Investment and Growth and Sustainable Human Development‘, UNCTAD/UNDP Global Programme on Globalization, Liberalization and Sustainable cenit.org.ar/eng/Descargas/globalization.pdf, (Accessed: 11.03.2010). Development, http://www.fund
  • Dollar, D. and Kraay, A. (2002a) ‗Growth Is Good for the Poor‘, Journal of Economic Growth, http://www.springerlink.com/content/u47r374434v07234/fulltext.pdf, (Accessed: 11.03.2010). 7, (3): 195–225,
  • Dollar, D. and Kraay, A. (2002b) ‗Spreading the Wealth‘, Foreign Affairs, 81, (1): 120– 33, http://www.idia.net/foreignaffairs/IMF5.pdf, (Accessed: 11.03.2010).
  • Gohou, G. and Soumare, I. (2009) ‗Impact of FDI on Poverty Reduction in Africa: Are there Regional Differences?‘,African Economic Conference 2009: Fostering Development in an Era of Financial and Economic Crises, United Nations Conference Centre, Addis Ababa, Ethiopia, 11 – 13 November 2009, http://www.uneca.org/eca_programmes/trade_and_regional_integration/events/A EC/2009/papers/AEC2009ImpactofFDIonPovertyReduction.pdf, 25.02.2010). (Accessed:
  • International Finance Corporation (IFC) (2000) Paths Out Of Poverty: The Role of Private Enterprise in Developing Countries, http://www.ifc.org/ifcext/publications.nsf/AttachmentsByTitle/PathsoutofPoverty English/$FILE/paths_out_of_poverty.pdf, (Accessed: 11.03.2010).
  • Jenkins, C. and Thomas, L. (2002) Foreign Direct Investment in Southern Africa: Determinants, Characteristics and Implications for Economic Growth and Poverty Alleviation, http://www.acp-eu-trade.org/library/files/Jenkins-Carolyn- and-Thomas-Lynn_EN_102002_CSAE-CREFSA_FDI-in-Southern-Africa- Determinants-Characteristics-and-Implications-for-Economic-Growth-and- Poverty-Alleviation.pdf, (Accessed: 22.01.2010).
  • Karim, N. Al-H. A. and Ahmad S. (2009) ‗Foreign Direct Investment: Key to Poverty Reduction in Malaysia‘, The IUP Journal of Applied Economics, 8 (5&6): 55-64, http://web.ebscohost.com/ehost/pdf?vid=2&hid=107&sid=f03f335e-a260-45c5- adf6-02f9efe909d2%40sessionmgr110, (Accessed: 26.02.2010).
  • Mason, A. D. and J. Baptist, (1996) How Important Are Labor Markets To The Welfare Of Indonesia's Poor?, World Bank Policy Research Working Paper: 1665, http://www- wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/1996/10/01/00 0009265_3961214163425/additional/126526322_20041117180617.pdf,
  • Mirza, Hafiz and Giroud, A. (2004) ‗Regionalization, Foreign Direct Investment and Poverty Reduction‘, Journal of the Asia Pacific Economy, 9 (2): 223 — 248, http://pdfserve.informaworld.com/241946_758064766_713703419.pdf, (Accessed: 04.01.2010).
  • Mirza; H. at al (2003) Regionalisation, Foreign Direct Investment and Poverty Reduction: The Case of ASEAN, http://www.research4development.info/PDF/Outputs/Mis_SPC/R7625MAIN_RE PORT.pdf, (Accessed: 04.01.2010).
  • Bradford: University of Bradford,
  • Nguyen, Thi P. H. (2003) ‗Contribution of Foreign Direct Investment to Poverty Reduction: The Case of Vietnam in the 1990s‘, In: Michael Frenkel and Georg Stadtmann (eds.): Foreign Direct Investment: Theory, Empirical Evidence and Policy http://www.zef.de/module/register/media/e086_FDI%20and%20poverty%20in% 20Vietnam%20(Nov.%2002).pdf, (Accessed: 25.02.2010). Un,
  • Shahbaz, M. and AAMIR, N. (2008) ‗Direct Foreign Investment and Income Distribution: A Case Study for Pakistan‘, International Research Journal of Finance http://www.eurojournals.com/irjfe_21_01.pdf, (Accessed: 27.02.2010). Economics, 21: 7–18,
  • Sumner, A. (2005) ‗Is Foreign Direct Investment Good for the Poor? A Review and Stocktake‘, http://web.ebscohost.com/ehost/pdf?vid=2&hid=3&sid=2db318c5-b67a-4696- bb4a-b5ecf57d0290%40sessionmgr10, (Accessed: 25.02.2010). 269–285,
  • Ugur, A. and RUANE, F. (2004) Foreign Direct Investment and Host Country Wages: New Evidence from Irish Plant Level Panel Data, University of Dublin - Institute for http://papers.ssrn.com/sol3/papers.cfm?abstract_id=735444, 07.03.2010). Studies Discussion Paper No: (Accessed:
  • United Nations Conference on Trade and Development (UNCTAD), (1999) World Investment Report: Foreign Direct Investment and the Challenge of Development, 12.03.2010). (Accessed:
  • United Nations Conference on Trade and Development (UNCTAD), (1994); World Investment Report Transnational Corporations, Employment and Workplace, http://www.unctad.org/en/docs/wir1994_en.pdf, (Accessed: 12.03.2010).
  • United Nations (UN) (2009) Rethinking Poverty, Report on the World Social Situation 2010, New York, http://www.un.org/esa/socdev/rwss/docs/2010/fullreport.pdf, (Accessed: 07.03.2010).
  • United Nations Conference on Trade and Development (UNCTAD) FDI Stat (2009) Major http://stats.unctad.org/FDI/TableViewer/tableView.aspx?ReportId=3084, (Accessed: 21.12.2009). Indicators (WIR 2009),
  • United Nations Conference on Trade and Development (UNCTAD), (2010) World Investment http://www.unctad.org/en/docs/wir2010_en.pdf, (Accessed: 28.07.2010).
  • Velde, D. W. te and Morrisey, O. (2002) Foreign Direct Investment: Who Gains?, Overseas http://www.odi.org.uk/resources/download/598.pdf, (Accessed: 08.03.2010)
  • Zhang, K. H. (2006) ‗Does International Investment Help Poverty Reduction in China?‘, http://web.ebscohost.com/ehost/pdf?vid=2&hid=7&sid=b5c8134f-0f6d-46fa- 9113-91b5c789bea1%40sessionmgr110, (Accessed: 05.01.2010) 79–90,
  • Watkins, K. and FOWLER, P. (2002) Rigged Rules and Double Standards: Trade, Globalisation and the Fight Against Poverty, Oxford: Oxfam GB, http://www.oxfam.org.uk/what_we_do/issues/trade/downloads/trade_report.pdf, (Accessed: 27.03.2010). Word Bank, Data on Poverty and Inequality, (Accessed: http://iresearch.worldbank.org/PovcalNet/povcalSvy.html, 07.03.2010).
  • World Bank (2001) World Development Report: Attacking Poverty – 2000/2001, http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,co ntentMDK:20195989~pagePK:148956~piPK:216618~theSitePK:336992,00.html , (Accessed: 22.02.2010).
There are 27 citations in total.

Details

Primary Language Turkish
Journal Section Articles
Authors

Asst. Prof. İdris Sarisoy This is me

Asst. Prof. Selcuk Koc This is me

Publication Date September 1, 2012
Submission Date December 29, 2013
Published in Issue Year 2012 Volume: 21 Issue: 3

Cite

APA Sarisoy, A. P. İ., & Koc, A. P. S. (2012). The Effect Of Foreign Direct Investment On Poverty: Panel Regression Analysis For 40 Selected Underdeveloped And Developing Countries. Çukurova Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 21(3), 225-240.