Causes of the Increase in FDI Flows Across Countries

Causes of the Increase in FDI Flows Across Countries Growth literature The significant increase in FDI flows across countries is a clear indication of globalization of the world economies over the past 2 decades. Neoclassical model of growth as well as endogenous growth models provides the basis for most of the empirical work on the FDI-GROWH relationship. According to the neoclassical growth theory, economic growth generally comes from two sources: factors accumulation and total factor productivity growth (Felipe, 1997). Growth is easier to quantity and analyse while difficulties abound in the measurement of the Total Factor Production growth due to the lack of appropriate economic modeling techniques as well as lack of appropriate data. Neoclassical growth projected that based on aggregate production function that relates the total output of an economy to the aggregate amount of the labour, human capital, physical capital and level of technology, poor countries will grow faster than rich countries. Neoclassical growth theory implies that return on cap ital stock should be higher in poor countries than in rich countries. This implies that the impact of FDI is limited to its output growth effect in the short run, with no change in the long run growth rate. On the other hand, the Endogenous growth literature state that FDI can not only contribute to the economic growth through capital formation and technology transfers (Blomstrom et al.1996) but also do so through the augmentation of the level of knowledge through labour training and skill acquisition ( De Mello, 1999). Endogenous growth models emphasize on other channels including human capital accumulation and externalities or spillover effect through which FDI can promote growth in the long run. (Romer 1986, Loungani and Razin,2001). The three channels identify through which FDI affects growth; First, FDI increases capital accumulation in the host country by introducing new inputs and technologies (Dunning, 1993; Blomstrom et al. 1996). Second, FDI may stimulate knowledge transfers, both in terms of labour training and skill acquisition and by introducing alternative management practices and better organizational arrangements (De Mello, 1997).Third, FDI increases competition in the h ost country by overcoming entry barriers and reducing the market power of existing firms. Channels of Growth When a country’s foreign investment increase international production also increase rapidly, and thus investment only contribute towards the expansion of national markets but also larger scale regional and global markets( UNCTAD,1990). It is obvious that FDI will convey many benefits to the host country; one of them is economic growth. Hermes and Lensink(2000) has summarized different channels through which positive externalities related with FDI can arise namely: i)competition channel where increased competition is likely to result in increased productivity, investment in human and physical capital and efficiency. Increased competition may lead to changes in the industrial structure towards more competitiveness and more export oriented activities. ii) Training channel through increased training of labour and administration. FDI can also increase the quality of domestic human capital and improve the knowhow and managerial skills of local firms. (learning by watching effect) ii i) Linkages channel whereby foreign investment is often accompanied by technology transfer. FDI can encourage the adoption of new technology in the production process through capital spillovers. According to De Mello (1997) and OECD (2002), FDI affect growth is likely to depend on the economic and technological conditions in the host country. Therefore, technological spillover is possible only when there is certain minimum or threshold level of human capital available in the host country (Borensztein, et al. 1998) iv) domestic firms imitate the move advance technologies used by foreign firms commonly termed as the ‘demonstration channel’. By adapting new technologies and ideas (i.e. technological diffusion) they may catch up to the levels of technology in developed countries. The use of new technologies may be important in contributing to higher productivity of capital and labour in the host country. Local firms have an opportunity to improve their efficiency by learnin g and interacting with foreign firms. Benefits of FDI The economic rationale for offering special incentive to attract FDI frequently derives from the belief that foreign investment produces externalities in the form of technology transfers and spillovers. Spillover effects may take place when the entry or presence of foreign firms leads to productivity and efficiency benefits in the host country’s local firms (Blomstrà ¶m and Kokko 1998). There are two forms of spillover effects that foreign firms bring to the local industries which are Inter- and intra- industry spillover effects. Horizontal spillover also called intra-industry spillovers correspond to technological externalities associated with specific knowledge, such as management strategy and know-how and superior production techniques. Kokko (1996) argue that domestic firms benefits from the entry of foreign firms competition, imitation and workers’ productivity. Local firms will allocate more resources to product development and quality assurance in order to remain competitive. Gorg and Greenaway (2004) state that there are 4 channels through which horizontal spillover might occur Imitation which involves simulation of exclusive technology, management and marketing skills of foreign firms such that it will improve the productivity of local firms( Halpenn and Murakozy,2007) Human capital and labour turnover; Gory and Greenaway (2004) identify two mechanisms through which there is productivity spillover. First a direct spillover to complementary worker, as skilled labour working alongside labour tends to raise productivity of the latter. Second, workers that move carry knowledge with them new technology, new management techniques and consequently can become direct agents of technology transfer. Competition- as competition increase due to foreign firms, domestic firms have to introduce new technology in order to increase their efficiency(Glass and Saggi,2002) Export- local firms can learn penetration tactics which are viewed as essential for the export market. Hence they may experience cost reduction with exportation Recent studies based on micro-level panel data call into question the evidence of positive spillover and find either insignificant or negative intra industry spillovers. Haddad and Harrison (1993) find no significant relationship between the level of FDI and domestic firm’s productivity growth in the same sector for Morocco in late 80s. Aitken and Harrison (1999) find a negative relationship between the two variables for Venezuela manufacturing industries for the period 1970 to 1980. Vertical spillover also known as inter-industry spillovers consists of externalities occurring due to FDI through backward and forward linkages to input market. Usually when MNE make transaction with local suppliers and customers it may lead to the transfer of technology and know-how which subsequently will improve the intermediate product. MNE can increase the demand for the local input as a backward link to intermediate good suppliers hence increasing the productivity of domestic firms. Productivity can also be increase through forward linkages when domestic producers purchase more sophisticated intermediate goods from MNEs. Moran (2001) states that there are case studies which show that knowledge is transferred from downstream foreign affiliates to upstream, training and assistance as well as supervision in implementation of new technologies

Far from the madding crowd Assignment Essay

Gabriel never really liked Troy, as he was able to win the woman that he loved without loving her in return. He feels as though Troy may have used Bathsheba to take over the farm. By meditating he allows himself to escape Troy’s world and to return to being himself. The only reason that the men stay at Troy’s party is because they want to make a good impression and also to ensure a winter’s work. Had any man refused to stay and get drunk with Troy, they would most likely have lost their jobs, and would be stuck through the winter. Had Bathsheba, Gabriel or Boldwood held the party, the men would have been free to come and go as they pleased, without the risk of losing their jobs or fear of letting anyone down. This all goes to show the kind of person that Troy is, the way that he is very conceited and feels that he has the authority to push people around as he is better than them. The weather and setting of the storm clearly projects the feelings and moods of the characters. While Gabriel is outside struggling to secure the farm, the thunder symbolises his anger. It shows how he could erupt at any minute because of Troy, yet the calm, quiet breaks in the thunder shows us that he is calm and tolerant, and the fact that he is risking his life for Bathsheba. The rustic characters are very important to the event of the storm, they give Hardy a background to show us the real person that Troy is. If there were only Gabriel, Boldwood and Bathsheba on the farm it would be very difficult to show Troy’s selfishness as one of them might have stood up to and challenged him. As the rustics are at the bottom of the farms hierarchy they are a lot more responsive to Troy’s orders and suggestions. When Troy holds the party in the barn, he makes the reader think that he is not as bad as they might have first thought, he has gone to the trouble of setting up a big party and has invited everyone that is linked with the farm. It is only when he starts to force the men into drinking more than they can handle, when he becomes too forceful it is then that the reader’s opinion of Troy begins to change. Bathsheba tries to reason with Troy to save the men. She says: â€Å"No-don’t give it to them-pray don’t, Frank! It will only do them harm: they have had enough of everything. † In doing this, Bathsheba clearly knows that Troy has gone too far, she can tell that the men can not handle any more alcohol. At this point Troy is only getting started, he does not care for his men, and he just wants to have a good time. In fear that Bathsheba could do something to ruin his party he immediately orders all of the women and children to leave so that he can get the men as drunk as he wishes. Troy shows a typical Victorian male attitude to women by making them all leave the barn, by doing so he shows his true power and ability to manipulate people to suit himself. The majority of Victorian men see women as lower than themselves, not as equals. Troy knows that he has the ability to make them do what ever he wishes. The morning after the storm Gabriel meets Boldwood on his detour back to the farm, Boldwood seems very distant as he struggles to hear and understand what Gabriel is saying to him. Gabriel is shocked to find that the wise and experienced farmer Boldwood has overlooked the ricks on his farm, they been left unprotected and vulnerable to the storm throughout the night. It can clearly be seen that Boldwood is not himself by his reply to Gabriel asking whether his ricks had been protected: â€Å"O yes. ‘ Boldwood added, after an interval of silence: ‘What did you ask, Oak? ‘ I agree that the characters are judged by each other and by the reader through their devotion to the land as the most devoted characters prevail in the end. Gabriel Oak, the most respected and caring of the land, has the trust of the whole farm, the reader and nature. Bathsheba, a caring and devoted businesswoman, is only looking for the opportunity to manage her own farm and to look after the crops. She is again liked by all and obsessed by Boldwood, in the end she too prevails as she ends up in love with a man who truly cares for her, her feelings and the farm. Boldwood, a very mature and experienced farmer who cares dearly for his farm, is lead astray by a joke valentine’s, after he discovers that Bathsheba sent the card he becomes obsessed with her and loses all care for his farm and land. Troy, an untrustworthy, lying, selfish and conceited soldier who only has time for himself ends up in the worst possible position, he has no love for the land and does not even care about the farm, he is hated by almost all of the characters and eventually by his own wife. At the end of the novel his sinful lifestyle takes its toll as he is brutally murdered by Boldwood. Boldwood who lost what little devotion he had also ends up dead, though his ending does not come as a result of a sinful life, but an obsession that drove him to madness, and finally to the grave.

Essay on Twelfth Nights Reflection Upon Women - 710 Words

Twelfth Nights Reflection Upon Women When Shakespeare wrote the play Twelfth Night in about 1602, women were generally thought of inferior to men meaning they were lower class. Shakespeare does no accept this idea. He shows this when he was asked by Queen Elizabeth 1 to write a play with love and comedy, the two main characters are very strong women and the male characters are very weak. Olivia is rich, noble and very emotional and very strong in character. In act 1 scene 2 we learn that Olivia’s brother and father have recently passed away, Olivia has a very strong love for her brother because of this she made some extreme vows: she will not show her face at ample view, â€Å"but like a†¦show more content†¦She has also fallen in love with Cesario/Viola who is a servant, which was not thought of as appropriate for noble women, Olivia did not care what other people thought, again, showing her strength of character. Olivia refused Duke Orsino’s love, this would have been very hard to do as Orsino is the duke of Illyria, he is the perfect husband as he is noble, of great estate, valiant, gracious, physically good looking, learned and free, he would have been what every women was looking for, but not Olivia, Olivia knows what she wants and is strong enough to find this for herself. Olivia lets her true feelings show, she does not hide them away. As the vows that Olivia made were very extreme and almost impossible to keep, she decided to break some of them showing her strength and realisation of this impossible task. She had now fallen in love and although she had vowed never to show her face in public, whilst mourning for seven years, love had forced her to change her mind showing her love for Cesario/ Viola was stronger than her love for her brother. Viola is a very noble, intelligent lady who was very witty and clever in speeches which isn’t what women were normally like showing that Viola is a strong women compared to other women, who has been shipwrecked alone and has lost all of her belongings; this takes a very strong character to be able to cope with thisShow MoreRelatedWisdom in Twelfth Night Essay2738 Words   |  11 PagesBeyond Seriousness to Wisdom in Twelfth Night      Ã‚  Ã‚  Ã‚  Ã‚   Shakespeare seems preoccupied with madness and folly in Twelfth Night. The word fool and its variants (foolery, foolish, and so forth) appear eighty times in the play, and the word folly occurs seven times. There are, in addition, other means of indicating foolishness such as Marias Now, sir, thought is free (1.3.67). As Feste suggests, Foolery ... does walk about the orb like the sun; it shines everywhere (3.1.39-40). Read MoreWilliam Shakespeares As You Like It As a Study of Perception and Misperception2315 Words   |  10 Pageslabour under the false impression that something you have seen, heard or become aware of is unequivocally correct. Applying this to plays such as Twelfth Night, King Lear, Macbeth, Othello and, of course, As You Like It, it becomes clear that the themes of perception and misperception are central to their plots. In Twelfth Night, Viola disguises herself as Cesario, a young man, with the objective of gaining admission into Olivias court. King Lear has the concept of blindnessRead MoreA Picatrix Miscellany52019 Words   |  209 Pagesthe power of the degrees with that of the planets (pp.12-14). Some passages are related to the Kità ¢b al-Baht of Jà ¢bir, which is laid under such heavy contribution later in The Aim of the Sage. Chapter 4. Since the successful use of talismans depends upon their being used in conjunction with the correct constellations, this chapter is devoted to the latter. The author gives a descriptive list of the twenty-eight mansions of the moon, according to the â€Å"Indian† system, and assigns to each its correctRead MoreLogical Reasoning189930 Words   |  760 Pagesauthor endorse you or your use of the work). (2) Noncommercial You may not use this work for commercial purposes (for example, by inserting passages into a book that is sold to students). (3) No Derivative Works You may not alter, transform, or build upon this work. An earlier version of the book was published by Wadsworth Publishing Company, Belmont, California USA in 1993 with ISBN number 0-534-17688-7. When Wadsworth decided no longer to print the book, they returned their publishing rights toRead MoreExploring Corporate Strategy - Case164366 Words   |  658 PagesWashington Post, 11 February (2005). ECS8C_C02.qxd 22/10/2007 11:53 Page 613 THE GLOBAL PHARMACEUTICAL INDUSTRY 613 BOX 2 Globalisation or US dominance? Biotechnology companies are ‘born global’: from their inception they draw upon a global pool of collaborators and investors, rather than growing from small domestic beginnings. Here once again the US dominates: publicly traded biotechs employ over four times more people in the USA than the EU, with a similar ratio for RD spend

The Significance of Childhood and Teen Depression - Free Essay Example

Sample details Pages: 2 Words: 678 Downloads: 4 Date added: 2019/03/13 Category Sociology Essay Level High school Tags: Childhood Essay Did you like this example? The Significance of Childhood and Teen Depression Everyone encounters moments when they feel gloomy or unhappy. These are normal emotions that are a part of being a human. It is difficult, however, for people to notice the difference between feelings of sadness and feelings of depression. Don’t waste time! Our writers will create an original "The Significance of Childhood and Teen Depression" essay for you Create order Depression is a self-destructing, unhealthy disorder that produces a lot of harm to ones mind that affects every aspect of a persons life- the way they feel thinks, and behave. To differentiate the difference between being sad or being depressed, there are many signs and symptoms that can help people see if they are depressed. Common traces of depression are shown in people that have a loss of energy, mood swings, or suicidal thoughts. When children or teenagers demonstrate behavior of increased anxiety in a relationship, the effects are emotional health, withdrawal, and suicidal thoughts that are alarming signs that they have depression. Emotional health is a necessary part of a persons overall well-being. Emotionally healthy people are focused, flexible, and creative during good and bad times because they can recognize and appropriately express their emotions (Heather). People that have a poor emotional health are most likely struggling with depression. Everyone goes through rough times in life; however, the difference between those that have a good emotional health verses those who have depression is how they act during those times. Some of the many signs known to insure if a child or adolescent has depression are frequent sadness, decreased interest in favorite activities, and increased irritability (AACAP). Mental and emotional health is an important part of children and teenagers overall health. Everyday it is worsening that in a five year period, rates of severe youth depression have increased and of those with severe depression, 76% of youth are left with no or insufficient treatment (The State of Mental Health in America). Access to treatments are provided for this serious mental illness, yet many still choose to not get the help they need. Some of the main reasons for this can be because of fear, shame, and hopelessness. These barriers prevent people from seeking care to relieve their affliction. (Add a transition sentence) Children and teenagers have an urgency to isolate themselves from people when struggling with depression. They slowly lose interest in activities they used to love causing them to discontinue doing the things they used to enjoy. The three common types of social isolation include emotional withdrawal, social withdrawal, and colleague withdrawal. Emotional withdrawal is seen in children and teens that pull away from family members or close friends. They do this because they feel worthless and misunderstood by people. Emotional withdrawal ties in with social withdrawal because they both lead up to an individual having a lack of social interaction. Colleague withdrawal is specifically targeted towards teenagers or adults with jobs. Signs of this behavior is shown when workers are present at work but are not contributing any effort in conversations with coworkers. (add more detail here). It is common for individuals to get confused on the key difference between social isolation and loneliness. Loneliness associates with people who feel sad or distress about being by themselves by feeling disconnected from the world around them. Social isolation occurs when a person is physically separated from other people and their environment (Loneliness and Isolation). While both loneliness and isolation differ, they are both associated with the increased risk of depression. (Add a transition sentence) When children and teenagers go through str essful events in their lives, it is usual to encounter suicidal thoughts. When undergoing these thoughts, individuals feel lonely and isolated- two emotions associated with increased suicide risk. In America, over 50 percent of all people who die by suicide suffer from major depression (AFSP). The most common signs of people that are considering taking their own lives are seen in people who have a change in personality, aggressive behaviors, or drastic mood changes. Suicide and depression are related but not everyone diagnosed with depression will attempt suicide. Both of these issues are mental disorders that can be treated with proper treatment plans.