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Does Foreign Direct Investment (FDI) Crowd-In Domestic Investment (DI) In South Africa?
... The effect of FDI on DI could be complementary, substitutional or neutral. In the developing country context, Agosin & Machado (2005); Ahmad et al. (2018); Djokoto (2013); Josue et al. (2014); Oualy (2019) and Wang (2010) have reported the neutral effect of FDI on DI in developing countries, in the short run. Kim & Seo (2003) found a significant crowd-in effect of FDI on DI for the whole of Korea. ...
... Thus, there is no short-run effect of FDI on DI in food manufacturing for developing countries. This result is supported by the evidence from the existing literature on whole economies of individual economies and groups of economies (Agosin & Machado, 2005;Ahmad et al., 2018;Djokoto, 2013;Josue et al., 2014;Oualy, 2019;Wang, 2010). The findings of Kim & Seo (2003) however, disagree with this result. ...
... For one dollar increase in FDI into food manufacturing, DI in the food manufacturing sector increases by 0.37 (less than one dollar). This is like the findings of Agosin & Machado (2005) Josue et al. (2014) and Kim & Seo (2003) however, found a neutral effect whilst Wang (2010) and Farla et al. (2016) reported crowd-in effect. ...
Background: Whilst the literature on the complementarity and substitutability of foreign direct investment (FDI) on domestic investment (DI) is not uncommon, the facet of food manufacturing is non-existent. This paper fills this void by investigating the effect of FDI on DI in the food manufacturing sector for developing, economies in transition and developed countries.
Methods: Using an unbalanced panel data of 49 countries from 1993 to 2016, from FAOSTAT, estimated by the system generalised method of moments (GMM), the Wald statistics for the short and long-run effects of FDI on DI were computed for the development groups.
Results: Developed economies experienced a crowd-out effect of FDI on DI in the short run, whilst the others experienced no significant effect. In the case of the long run, food manufacturing sectors of all three development groups exhibited a crowd-out effect. The effect in the long run for all development groups together is a crowd-in. Analysing all country groups together could mask the results of the various country groups.
Conclusions: A review of investment policies to priorities FDI entry mode that favour domestic investment is needed. Improvement of the investment regulatory and administrative efficiency among others are recommended.
... Thus, there is no short-run effect of FDI on DI in food manufacturing for developing countries. This result is supported by the evidence from the existing literature on whole economies of individual economies and groups of economies (Agosin & Machado, 2005;Ahmad et al., 2018;Djokoto, 2013;Josue et al., 2014;Oualy, 2019;Wang, 2010). The findings of Kim & Seo (2003) however, disagree with this result. ...
... For one-dollar increase in FDI into food manufacturing, DI in the food manufacturing sector increases by 0.37 (less than one dollar). This is like the findings of Agosin & Machado (2005) Josue et al. (2014) and Kim & Seo (2003) however, found a neutral effect whilst Wang (2010) and Farla et al. (2016) reported a crowd-in effect. ...
Background: Whilst the literature on the complementarity and substitutability of foreign direct investment (FDI) on domestic investment (DI) is not uncommon, the facet of food manufacturing is non-existent. This paper fills this void by investigating the effect of FDI on DI in the food manufacturing sector for developing, economies in transition and developed countries.
Methods: Using an unbalanced panel data of 49 countries from 1993 to 2016, from FAOSTAT, estimated by the system generalised method of moments (GMM), the Wald statistics for the short and long-run effects of FDI on DI were computed for the development groups.
Results: Developed economies experienced a crowd-out effect of FDI on DI in the short run, whilst the others experienced no significant effect. In the case of the long run, food manufacturing sectors of all three development groups exhibited a crowd-out effect. The effect in the long run for all development groups together is a crowd-in. Analysing all country groups together could mask the results of the various country groups.
Conclusions: A review of investment policies to priorities FDI entry mode that favour domestic investment is needed. Improvement of the investment regulatory and administrative efficiency among others are recommended.
... Foreign direct investment has no effect on domestic investment for the agriculture of developing economies regarding the short run (Table 5). This is like the findings of whole economies for least developed countries (Wang 2010), Asia and Latin America (Agosin and Machado 2005), global food manufacturing (Djokoto 2021b), Ghana (Djokoto 2013), South Africa (Josue et al. 2014), and Cote d'Ivoire (Oualy 2019). This result is however at variance with the findings of other whole economy studies such as for China (Ahmad et al. 2018) who found a crowd-out effect and for South Korea (Kim and Seo 2003) who reported a crowding-in effect. ...
This study contributes to the debate on whether foreign direct investment crowd-in or crowd-out domestic investment by examining the short run and long run crowding effects of foreign direct investment (FDI) on domestic investment (DI) in the agricultural economy, using a cross-section of 64 countries from 1997 to 2016. In the short run, FDI has no discernible effect on DI in developing and transition economies’ agriculture. For developed economies, however, there is a crowd-out effect. Overall, is a crowding-in effect in the short run. A crowding-out effect was observed for developed countries whilst a crowding-in effect was observed for developed and economies in transition. Overall, the long-run effect is “no effect”. Improving the investment environment regarding regulatory and administrative processes as well as the absorptive capacity of the host country are recommended.
Background: Whilst the literature on the complementarity and substitutability of foreign direct investment (FDI) on domestic investment (DI) is not uncommon, the facet of food manufacturing is non-existent. This paper fills this void by investigating the effect of FDI on DI in the food manufacturing sector for developing, economies in transition and developed countries.
Methods: Using an unbalanced panel data of 49 countries from 1993 to 2016, from FAOSTAT, estimated by the system generalised method of moments (GMM), the Wald statistics for the short and long-run effects of FDI on DI were computed for the development groups.
Results: Developed economies experienced a crowd-out effect of FDI on DI in the short run, whilst the others experienced no significant effect. In the case of the long run, the food manufacturing sectors of all three development groups exhibited a crowd-out effect. The effect in the long run for all development groups together is a crowd-in. Analysing all country groups together could mask the results of the various country groups.
Conclusions: A review of investment policies to prioritise FDI entry mode that favour domestic investment is needed. Improvement of the investment regulatory and administrative efficiency among others are recommended.
p>ENGLISH ABSTRACT: In these modern times it is more and more difficult to become and stay competitive in the business environment. Customers have increasingly more products to choose from and more channels through which they can satisfy their needs. In such an environment it is vital to ensure an exceptional customer experience, and to maintain this experience through delivering products and services according to customer needs. This can be achieved by developing a process improvement model that integrates traditional approaches to business process improvement with the concept of customer experience management.
AFRIKAANSE OPSOMMING: In vandag se besigheidsomgewing raak dit al moeiliker om te kompeteer vir die lojaliteit van kliënte. Kliente het al meer produkte om van te kies en heelwat meer kanale waardeur hulle, hulle begeertes kan vervul. In so omgewing is dit baie belangrik om die ervaring van kliënte te verbeter deur produkte en dienste te lewer wat voorsien in al die behoeftes van die kliënt. Dit kan gedoen word deur die ontwikkeling van ’n prosesverbeteringsmodel wat die tradisionele konsep van besigheidsprosesverbetering integreer met kliëntervaring bestuur.</p
This paper explores the interface between personality psychology and economics. We examine the predictive power of personality and the stability of personality traits over the life cycle. We develop simple analytical frameworks for interpreting the evidence in personality psychology and suggest promising avenues for future research.
A gender gap in mathematics achievement persists in some nations but not in others. In light of the underrepresentation of women in careers in science, technology, mathematics, and engineering, increasing research attention is being devoted to understanding gender differences in mathematics achievement, attitudes, and affect. The gender stratification hypothesis maintains that such gender differences are closely related to cultural variations in opportunity structures for girls and women. We meta-analyzed 2 major international data sets, the 2003 Trends in International Mathematics and Science Study and the Programme for International Student Assessment, representing 493,495 students 14-16 years of age, to estimate the magnitude of gender differences in mathematics achievement, attitudes, and affect across 69 nations throughout the world. Consistent with the gender similarities hypothesis, all of the mean effect sizes in mathematics achievement were very small (d < 0.15); however, national effect sizes showed considerable variability (ds = -0.42 to 0.40). Despite gender similarities in achievement, boys reported more positive math attitudes and affect (ds = 0.10 to 0.33); national effect sizes ranged from d = -0.61 to 0.89. In contrast to those of previous tests of the gender stratification hypothesis, our results point to specific domains of gender equity responsible for gender gaps in math. Gender equity in school enrollment, women's share of research jobs, and women's parliamentary representation were the most powerful predictors of cross-national variability in gender gaps in math. Results are situated within the context of existing research demonstrating apparently paradoxical effects of societal gender equity and highlight the significance of increasing girls' and women's agency cross-nationally.
The interrelationship between senior high school students' science achievement (SA) and their self-confidence and interest in science (SCIS) was explored with a representative sample of approximately 1,044 11th-grade students from 30 classes attending four high schools throughout Taiwan. Statistical analyses indicated that a statistically significant correlation existed between students' SA and their SCIS with a moderate effect size; the correlation is even higher with almost large effect sizes for a subsample of higher-SCIS and lower-SCIS students. Results of t-test analysis also revealed that there were significant mean differences in students' SA and their knowledge (including physics, chemistry, biology, and earth sciences subscales) and reasoning skill subtests scores between higher-SCIS and lower-SCIS students, with generally large effect sizes. Stepwise regression analyses on higher-SCIS and lower-SCIS students also suggested that both students' SCIS subscales significantly explain the variance of their SA, knowledge, and reasoning ability with large effect sizes.
The purpose of this study is to test empirically whether and how classroom and school factors contribute to student mathematics learning gains in the border region of North West province, South Africa and Southeastern Botswana. Our results suggest that in both regions, improving teaching quality has an important impact on how much mathematics students learn during the year. The amount of effort put into covering the curriculum and teacher mathematics knowledge are also important factors in the learning gains students make in grade 6 classrooms in southern Africa.
This article assesses the performance of the Indian Comprehensive Crop Insurance Scheme from 1985 to 1993 in relation to a recent critical literature which argues that comprehensive agricultural insurance is subject to insuperable moral‐hazard obstacles. The Indian scheme has made heavy financial losses; on the benefit side, sample data from Andhra Pradesh suggest that some farmers have converted to yield‐raising techniques as a result of the presence of the insurance scheme, but that the scheme has not brought about any improvement in loan repayment performance, even though that was the scheme's explicit objective. We conclude that, to work properly, the scheme requires an increase in premiums and a reduction in the range of risks covered. A possible alternative design, in which individual farmers are insured directly against drought rather than against a shortfall in yields, is sketched out.
The main purpose of this study was to investigate the factors that might be associated with students’ attitudes towards science. The participants were 1745 students from secondary schools and universities across Australia. The results of factor analysis, descriptive statistics, Tukey’s post hoc test and correlation analysis demonstrate that there were statistically significant differences between male and female students. Finally, the study provides a valid and reliable instrument. Implications of this study for future research are also discussed.
Cross-domain analysis was used to examine changes in two attitudinal dimensions: students' attitudes towards science and attitudes about the utility of science over the middle school and high school years. A sample of 444 students was selected from the Longitudinal Study of American Youth. The results show that the overall trend for students' attitudes about the utility of science is positive; however, attitudes towards science decline over the middle school and high school years. Important time-varying predictors of both attitudes include science self-concept, peer attitudes, teacher encouragement of science, and, to a lesser extent, student participation in science activities.
The aims of this study were to test the structure of attitudes to school subjects and to test the causal relationship between attitudes, level of aspiration (goal) and achievement with SEM procedures. A total of 280 high school students participated in the study. Items measuring attitude towards each subject matter clustered around one factor indicating that each school subject is unique, but related, to other subjects. These distinct, but related, factors seemed to be underlined by a higher-order construct: 'attitudes to school'. The structural analysis revealed that 'attitudes to school' influence achievement, but only indirectly. Level of aspiration had significant direct effect on achievement and mediated between 'attitudes' and achievement.
The Central Bank of Lesotho in 2002 issued a decree that the financial system of the country – in particular the process of intermediation – should be given a massive facelift in order to further enhance economic growth. Given the conflicting hypotheses in the finance – growth causality, that decree can be viewed as putting the cart before the horse. This paper provides an empirical basis upon which such a decree (or a different one) should have been issued. Causality between five alternative proxies of financial intermediation on the one hand and real GDP growth on the other is the subject of this paper. Time series properties of the variables – from unit roots to cointegration – are studied in order to establish the appropriate causality test to use between the conventional Granger causality test and the VECM-based causality test. Four out of five financial intermediation proxies together with the growth variable are non-stationary. However all these non-stationary proxies turn out to be not cointegrated with growth. Only one proxy Granger causes growth while for the rest there is no causality in either direction between them and growth. No-cointegration coupled with non-causality robustly reveals that the finance – growth nexus does not hold for the Lesotho economy.
In recent years a much optimistic view on the role of Foreign Direct Investment (FDI) on Domestic Investment (DI) in the host country has evolved. Empirical studies reveal that the increase in DI due to FDI inflows would be greater than the amount of the FDI inflows in the host country and that this effect would be direct and indirect. Viewing the increasing trend of FDI inflows into India, this study explores the impact of FDI inflows on the DI in India. This study finds that the direct impact of FDI inflows on DI in India is positive but the indirect impact is 'neutral' on the DI in the long run. The study finds no evidence that the increase in DI due to FDI inflows is greater than the amount of the FDI inflows in India.
Rainfall index insurance is a theoretically attractive financial product that has achieved only limited adoption. This paper seeks to understand the structure of demand for rainfall index insurance in India. We develop two approaches to estimating households' valuation of rainfall insurance and evaluate them against an experiment in which fixed prices are randomly assigned. The first approach uses a simple structural model of index insurance demand that includes basis risk–the possibility that policy-holders may suffer a negative shock yet receive little or no payout. We use survey data from members of an insurance pilot in Gujarat, India to fit the model and estimate the willingness to pay (WTP) for rainfall insurance coverage. Relative to the choices we observe at randomly assigned fixed prices, the structural model significantly overestimates demand. Our second approach uses a Becker-Degroot-Marschak (BDM) methodology to empirically elicit WTP from potential insurance customers at the time of marketing. We find that BDM does a better job of predicting fixed price purchasing behavior, but the distribution of stated willingness to pay has large mass points at focal points. Finally, we directly compare the two approaches and find the theoretical model has weak predictive power for WTP as elicited by BDM. We explore which household characteristics are correlated with WTP and determine that recent experiences with rainfall and insurance are important factors not captured in our static model, suggesting that learning dynamics may be a promising direction for future analyses.
This paper formulates and estimates multistage production functions for child cognitive and noncognitive skills. Output is determined by parental environments and investments at different stages of childhood. We estimate the elasticity of substitution between investments in one period and stocks of skills in that period to assess the benefits of early investment in children compared to later remediation. We establish nonparametric identification of a general class of nonlinear factor models. A by-product of our approach is a framework for evaluating childhood interventions that does not rely on arbitrarily scaled test scores as outputs and recognizes the differential effects of skills in different tasks. Using the estimated technology, we determine optimal targeting of interventions to children with different parental and personal birth endowments. Substitutability decreases in later stages of the life cycle for the production of cognitive skills. It increases in later stages of the life cycle for the production of noncognitive skills. This finding has important implications for the design of policies that target the disadvantaged. For some configurations of disadvantage and outcomes, it is optimal to invest relatively more in the later stages of childhood.
The first Millennium Development Goal aims to halve the number of people in the world living in extreme poverty. In this Research Brief, emanating from the UNU-WIDER project on .Fragility and Development., the premise is that we should also be concerned about households who are vulnerable to poverty. This includes those who have little likelihood of escaping from poverty and who are at risk of falling into poverty in the future. Household vulnerability to poverty is affected by, and affects, vulnerability in other dimensions and levels, such as the vulnerability of a country or region to natural hazards and macro-economic shocks. To address household vulnerability in developing countries requires an understanding of the concept and nature of vulnerability, its measurement and its application. Therefore, this Research Brief asks: what is vulnerability? How can vulnerability be measured? How should households, governments and development agencies respond to vulnerability?
We examine the relationship between educational inputs-primarily pupil-teacher ratios-and school outcomes in South Africa immediately before the end of apartheid government. Black households were severely limited in their residential choice under apartheid and attended schools for which funding decisions were made centrally, by White-controlled entities over which they had no control. The allocations resulted in marked disparities in average class sizes. Controlling for household background variables, we find strong and significant effects of pupil-teacher ratios on enrollment, on educational achievement, and on test scores for numeracy. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
This paper considers the sources of skill formation in a modern economy and emphasizes the importance of both cognitive and non-cognitive skills in producing economic and social success, and the importance of both formal academic institutions and families and firms as sources of learning. Skill formation is a dynamic process with strong synergistic components. Skill begets skill. Early investment promotes later investment. Non-cognitive skills and motivation are important determinants of success and these can be improved more successfully and at later ages than basic cognitive skills. Methods currently used to evaluate educational interventions ignore these non-cognitive skills and therefore substantially understate the benefits of early intervention programmes and mentoring and teenage motivation programmes. At current levels of investment, American society under-invests in the very young and over-invests in mature adults with low skills.
Recent innovations in financial markets bring about new instruments that can be used to provide insurance for agricultural risks. The advantages of index-based insurance contracts make them an attractive tool for risk transfer. In the case of developing countries, index-based insurance allows government to develop agricultural insurance within the country and to transfer the non-diversifiable component of country's risk to the global markets at highly reduced transaction cost. New institutions have to be formed to implement such a scheme, but the simplicity and transparency of index-based contracts makes those changes easier to implement than with traditional insurance.
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