Official Development Assistance and Foreign Direct Investment Flows to Sub‐Saharan Africa

Abstract: Foreign direct investment is believed to have a positive impact on the economies of the developing countries but its determinants are not yet fully established. This paper empirically investigates the relationship between official development assistances and foreign direct investment flows using panel data from 11 sub‐Saharan African countries for the period 1990–2003. The results show that bilateral official development assistance has a significant and positive influence on foreign direct investment flows. The results also show that trade openness, growth rate in the labor force, and exchange rates have a positive and significant effect on foreign direct investment flows. But multilateral development assistance, the growth rate in GDP per capita, the country's composite risk level, and the index for political freedom and civil liberties do not have a statistically significant effect on foreign direct investment flows. The policy implication of the positive and significant influence of the bilateral official development assistance on foreign direct investment is that the recipient countries need to formulate policies that improve their economic relationships with the donor countries in order to attract greater foreign direct investment flows from the multilateral corporations located in these countries.     

Dodging Adverse Selection: How Donor Type and Governance Condition Aid’s Effects on School Enrollment

We employ AidData to test the effects of primary-education aid on school enrollment. We argue that the problem of adverse selection complicates both the allocation and the effectiveness of aid. We hypothesize that bilateral donors ought to have greater freedom to condition aid on recipient governance quality than multilateral donors, which are often bound by institutional rules to provide aid more impartially. Compared to their multilateral counterparts, bilateral donors may have advantages in overcoming adverse selection, resulting in bilateral aid’s boosting enrollments to a greater degree. AidData’s extensive coverage of multilateral aid enables this analysis for up to 100 low- and low-middle-income countries from 1995 to 2008. Latent growth regression analysis suggests that, compared to multilateral donors, bilateral donors indeed condition their primary education aid on recipient control of corruption and that bilateral aid is significantly related to improved enrollments.     

The role of foreign direct investment (FDI) on domestic entrepreneurship in South Africa

ABSTRACT

This study examines the effect of foreign direct investment on domestic entrepreneurship in South Africa. With the focus on inward capital flows, the study specifically employed stock data and the Global Entrepreneurship Monitor to measure the impact. The data set analysed is for the period 2000–18, and after testing a Threshold Vector Autoregressive model, it was established that there is a short-run and long-run nonlinear relationship between foreign direct investment and domestic entrepreneurship in South Africa. The key findings of the study were that foreign direct investment has a positive short-run and long-run influence on domestic entrepreneurship. The policy recommendations are for government to create an eco-system that supports entrepreneurship through the lowering of regulatory burden on new domestic firms and enact robust sector-specific localisation policies for big corporations.     

The Increasing Selectivity of Foreign Aid, 1984–2003

The Monterrey Consensus includes the idea that foreign aid is more effective when targeted to countries with sound institutions. We examine the extent to which foreign aid, bilateral and multilateral, is “selective” in terms of democracy and property rights/rule of law. We find that multilateral assistance is more selective than bilateral aid in targeting countries with good rule of law. “Selectivity” is a new phenomenon. During 1984–89, both bilateral and multilateral aid had significant negative relationships with rule of law; by 2000–03 this had shifted to a significant positive relationship for multilateral aid, and a positive but statistically insignificant relationship for bilateral aid.     

绿地投资还是跨国并购:中国企业OFDI模式选择研究

对外直接投资模式选择是企业国际化战略中的关键决策。文章运用中国工业企业数据库和商务部境外投资企业名录匹配基础上的补充数据，实证考察企业在绿地投资和跨国并购之间的对外投资模式选择。研究表明：随着企业生产率、资本密集度，以及东道国经济发展水平、关税水平和制度环境的提升，企业进行跨国并购的概率提高；随着企业规模、研发投入，以及东道国市场规模、文化距离的增大，企业选择绿地投资的概率提高；相比来看，非国有企业、资本密集型企业和具有国际化经验的企业对各类影响因素更加敏感，在OFDI模式选择中受到的影响程度更大。     

Understanding the role of trade agreements in Indonesia’s FDI

In this paper, we develop the hypothesis that trade agreements influence foreign direct investment (FDI). We extend the conventional model of FDI determinants to accommodate the role of trade agreements. Fitting Indonesian data to this model, we discover strong evidence that, while both bilateral and multilateral trade agreements positively influence Indonesia’s FDI, multilateral agreements have a larger effect. We further distinguish FDI by sector and find sector-specific trade agreements play an active role: these agreements positively influence FDI in the primary and service sectors, but not in the manufacturing sector. We also find that trade agreements positively influence FDI through the export and total factor productivity channels, and less so through the economic growth channel.     

Africa's Money in Africa

Workers' remittance and compensation of employees received in Sub‐Sahara Africa (SSA) increased from USD 1.398 billion in 1980 to USD 4.834 billion in 2000 and soared to USD 21.101 billion in 2010. The impact of remittance on recipient economy requires further empirical investigation as there has not been consensus on whether remittance induces “financial prodigality” or investment in Africa. Differing from extant studies, this study employed rule of law, regulatory quality and government effectiveness as indicators of institutional quality. This is with a view to exploring how institutional quality and financial depth interact with remittance to influence investment in 44 African countries (1995‐2010). The major finding from the study, inter alia, is that institutional quality and financial depth play complimentary role in influencing remittance for investment in Africa. This study concludes that the impact of Africa's money in Africa will be enhanced in the presence of reliable institutional quality and viable financial sector. Thus, the side effect of “financial prodigality” that might be associated with remittance can be ameliorated.     

国际制度变迁与东亚体系和平转型——一种制度主义视角分析

受新制度经济学关于制度变迁的学理启发,作者提出了国际制度变迁的理论分析范式,并以此探讨国际制度变迁如何影响东亚体系的和平转型。未来和平转型后的东亚体系将呈现一种嵌套交叠式制度联系模式,在这种模式中,东亚多边合作体系与美国双边同盟体系互相交叠、兼容共存。多边合作体系既不能化解美国双边同盟体系,美国双边同盟体系也不能主导多边合作体系。在这种情况下,中国外交的现实做法是从兼容美国双边同盟体系的这一路径出发,在东亚地区积极开展多边外交、推动建立多边合作体系。     

How Did Heavily Indebted Poor Countries Become Heavily Indebted? Reviewing Two Decades of Debt Relief

The paradox of debt is that heavily indebted poor countries (HIPCs) became heavily indebted after two decades of debt relief efforts. Average policies in HIPCs 1980–97 were worse than other less-developed countries (LDCs), controlling for income. Terms of trade and wars do not show a different trend in HIPCs than in non-HIPC LDCs. Financing HIPCs shifted away from private and bilateral nonconcessional sources toward International Development Assistance and other multilateral concessional financing––but this implicit form of debt relief also failed to reduce net present value debt. The record is not encouraging for the success of current debt relief efforts.     

Aid and Public Finance: A Missing Link?

The present consensus in the literature is that foreign aid does not have the desired positive effects on economic development. This is due in great part to poorly performing public institutions in recipient countries. In order to understand better the causes of this undesirable phenomenon, we examine the relationship between multilateral foreign aid flows and recipient countries’ public finance systems. We construct a new indicator to assess the quality of public finance, the Public Finance Institutions Quality (PFIQ) Index. For our panel of 86 countries, we find that multilateral aid flows have a negative impact on recipient country PFIQ score, whereas exogenous improvements in public finance seem to attract more aid. These results provide insight into the “black box” of governance: failure to turn aid receipts into desired results seems partly attributable to multilateral aid, in its present form, not being suited to improving a country’s public finance institutions. However, international donor organisations do seem to reward exogenous improvements in quality and reliability of public finance systems.     

兼容性制度竞争:双层对冲与地区制度的嵌套设计北大核心

地区制度的兴起增加了全球治理机制的复杂性。竞争性多边主义理论强调制度竞争会导致国际机制的碎片化和规则冲突。制度聚合理论则认为制度背景会强化规则的一致性,甚至形成制度服从。这种冲突—聚合的二分法不足以分析地区制度与多边制度之间关系的复杂现实。作者提出一个双层对冲的分析框架,以解释地区制度与核心多边制度间的联系机制;一方面,地区成员要通过建立地区制度寻求外部选项,实现对现有多边制度的制衡。另一方面,地区成员又离不开现有多边制度,需要借用现有的多边制度资源来解决地区制度建设中的机会主义问题。为了实现双层对冲,地区成员国会根据地区制度的系统冲击效应和投资报偿结构,设计不同的制度嵌套。作者比较了金融救助领域的欧洲稳定机制、清迈倡议多边化以及拉美储备基金等地区金融安排,其结果符合预期。双层对冲框架下的兼容性制度竞争有利于推动国际制度的渐进变迁,限制了大国在国际秩序转型中的冲突烈度,为世界政治的和平权力转移提供了可能。     

债务结构、公司绩效与上市公司治理

文章通过2001～2005年实证研究发现,当年资产负债率对当年公司绩效影响为负,往年资产负债率对公司绩效影响为正,与公司绩效之间存在着显著的倒"U"型关系,最优资产负债率为40%左右。不同的负债结构对公司绩效的影响不同,往年短期负债对公司绩效影响为正,当年短期负债对公司绩效影响为负;长期负债与公司绩效并不存在显著的相关关系。     

Bilateral Trade Performance in West Africa: A Gravity Model Estimation

This study provides empirical insights on the functioning of regional trade agreements within the Economic Community of West African States (ECOWAS) by identifying bilateral trade barriers that affect the extent of trade flows among member countries. Also, it highlights some trade barrier indicators that are rarely covered in extant studies, such as the multilateral resistance term, the extent of trade complementarity, and the presence of economic integration agreements among ECOWAS member countries. We then provide augmented gravity model estimation on the determinants of bilateral trade in the region. We find, among other things, that trade complementarity had a positive and significant effect on bilateral trade within the sub‐region region. Other important determinants of intra‐regional trade include multilateral trade resistance and economic integration agreements — meaning that countries with some kind of agreement like the West African Economic and Monetary Union (WAEMU) tend to trade more among themselves than other member countries.     

Financial Liberalization and Stock Market Efficiency: Causality Analysis of Emerging Markets

This paper studies the long- and short-run relationship between financial liberalization and stock market efficiency. It expands the extant body of knowledge by investigating Granger causality relationship applying mean group, common correlated effect mean group and common correlated effect pooled estimator to balanced panel data for 27 emerging markets over the period 1996–2011. We find evidence of financial liberalization Granger causes stock market efficiency, which is consistent with liberalization leads to efficiency hypothesis. Subsequently, our work makes a fresh contribution to the literature by focusing on informational efficiency of stock markets rather than financial development. Furthermore, we find that a negative long-term relationship between financial liberalization and stock return autocorrelation coexists with a positive short-term relationship between the two. The findings that financial liberalization, which has a deteriorated effect on stock market efficiency in the short-run, but positive impact in the long-run, allow us to draw an analogy similar to the J-curve hypothesis.     

Linguistic Information Quality in Customers' Forward‐Looking Disclosures and Suppliers' Investment Decisions

This study examines whether and how linguistic information quality (measured by readability) of customer firms' management earnings forecast reports (MEFRs) affects supplier firms' investment quality (measured by investment efficiency). Our analyses reveal that supplier investment efficiency is positively associated with the average linguistic information quality of customers' prior MEFRs, and the positive association between supplier investment efficiency and customer MEFRs' numerical information quality is stronger in supplier firms with more readable customer MEFRs. Our analyses also reveal that higher linguistic information quality of customer MEFRs improves the monitoring of supplier firms by their outside stakeholders, such as institutional investors and financial analysts, and ameliorates the negative impact of suppliers' customer‐dependence on their investment efficiency. Our results suggest that greater linguistic information quality of a customer firm's forward‐looking disclosures is associated with higher‐quality investments made by its suppliers along the supply chain.     

The Maghribi traders: a reappraisal?1

Previous studies concluded that a private‐order institution based on a multilateral reputation mechanism was particularly important in governing agency relations among the Maghribi traders who operated in the Muslim Mediterranean. The legal system and a bilateral reputation mechanism were particularly important among the Genoese traders. Initial cultural, social, and political factors led to this institutional distinction, while the incorporation of culture in the resulting institutions influenced subsequent institutional developments. In particular, the particularities of the late medieval European institutions contributed to the rise of the modern—impersonal—markets in Europe. The analysis also substantiates the contention that private‐order institutions can support sophisticated exchange and market‐promoting policies should take this into account, particularly in countries lacking an effective court system. An article by Edwards and Ogilvie challenges this analysis. It alleges that the Maghribis, like European traders, relied on court enforcement and a bilateral reputation mechanism in which a narrow social circle responded to opportunism. This article shows that Edwards and Ogilvie's analysis and conclusions are wrong. It refutes each of their empirical claims and presents additional pieces of evidence supporting the institutional distinction conjecture. The discussion is structured around the methodological challenge associated with comparative and historical institutional analysis.     

Impact of institutional determinants on income inequalities in Indonesia during the Era Reformasi

This article examines the links between a selected group of institutional factors and income inequalities. The Indonesian transformation process, referred to as the Era Reformasi, which started in 1999, was a substantial institutional change in the social, political, and economic sphere that could have impacted income inequalities. We conducted an analysis based on Engle and Granger’s (1987) cointegration technique and the autoregressive distributive lag (ARDL) model, which allowed us to assess the short-run and long-run links, as well as causal relationships between variables. Particular attention was paid to governance indicators and economic freedom as factors that influence other economic and political institutions. The results show that improvements in institutional factors, namely economic freedom, corruption control, government effectiveness, regulation quality, and voice and accountability, significantly reduced income inequalities during the Era Reformasi in Indonesia.     

政府向社会力量购买公共服务评估指标体系构建研究

评估是政府购买公共服务的重要环节,其指标体系构建的科学性、合理性和有效性是保障政策实施的关键,具有重要的行为引导功能,也是建立科学评估的基本工作。通过文献法明晰政府购买公共服务的评估维度,初步拟定制度规范、购买投入、承接能力、公正性、服务质量、满意度、影响力7 个二级指标和49 个三级指标,并通过德尔菲法（Delphi Method）和小组讨论进行指标筛选,得到33 个正式评估指标,其信效度均得以保证。再通过层次分析法（AHP）,构造8 个两两比较的判断矩阵,求取每一个评估指标的相对权重,并对其一致性进行检验与分析,最终确定指标权重。研究结果显示,“满意度”“影响力”和“服务质量”维度的权重高于其他维度,“制度规范”和“公正性”维度权重居中,“购买投入”和“承接能力”维度的权重略低。     

Economic and political determinants of foreign direct investment

Four models explaining the flow of foreign direct investment in 80 less developed countries are econometrically estimated and compared by ex post forecasts. A politico-economic model which simultaneously includes economic and political determinants performs best. The higher the real per capita GNP and the lower the balance of payments deficit are, the more foreign direct investment is attracted. Among the political determinants the amount of bilateral aid coming from Western countries and multilateral aid has a stimulating effect, while help from communist countries has a negative effect. Political instability significantly reduces the inflow of foreign direct investment.     

Going multilateral? Financial markets' access and the League of Nations loans, 1923–8

Why are international financial institutions important? This article reassesses the role of the loans issued with the support of the League of Nations. These long‐term loans constituted the financial basis of the League's strategy to restore the productive basis of countries in central and eastern Europe in the aftermath of the First World War. In this article, it is argued that the League's loans accomplished the task for which they were conceived because they allowed countries in financial distress to access capital markets. The League adopted an innovative system of funds management and monitoring that ensured the compliance of borrowing countries with its programmes. Empirical evidence is provided to show that financial markets had a positive view of the League's role as an external, multilateral agent, solving the credibility problem of borrowing countries and allowing them to engage in economic and institutional reforms. This success was achieved despite the League's own lack of lending resources. It is also demonstrated that this multilateral solution performed better than the bilateral arrangements adopted by other governments in eastern Europe because of its lower borrowing and transaction costs.