Foreign Direct Investments—A Perspective of Sustainability: Evidence from the Austrian and German Labor Market

Round 1

Reviewer 1 Report

Effects form FDI on wages differences between male and female are studied within the article. According to the authors’ statement this aspect is considered within sustainability concept. Although, the authors do not indicate, particularly, which Sustainable Development Goals relate to the theme. In the reviewer’s mind, theme on wage gender inequality may be related to such Sustainable Development Goals as ‘Gender equality’ and ‘Reduced inequalities’. The article content, although, does not discover these aspects and accents mostly are put on green economy and green society, i.e., environmental aspects of sustainability. In turn, empirical part of the article does not present analysis of data, which characterize effects on environment. As a result one may see two parallel thoughts presented thorough the article – FDI effects on gender wage differences and an addressing of environmental challenges through economic actions, particularly FDI. In the reviewer’s mind, the mentioned themes theoretically and empirically have to be linked in clearer manner. The authors indicate that ‘FDI have the potential to play a crucial role in addressing environmental challenges...’ (see line 107) and ‘… human resources …. green, digital skills’ (see lines 118, 120, 149). In contrast, conclusions indicate only changes in wage amount as a result of FDI and differences between male and female wages (for example, see lines 378, 379, 392, 394). Additionally, it would be useful to provide economic and sustainability backgrounds of the countries under analysis. In conclusion, it is noteworthy to indicate the authors’ deep knowledge on sustainability related issues and ability to provide econometric analysis of statistical data. The theme is very urgent and authors’ approach to link sustainability goal (reduction of inequality) with FDI is very useful for understanding economic mechanisms for reaching sustainability goals. It is recommended to the authors to develop the theme.

 

It is recommended to proofread the text and to correct style and structure of sentences. For example, see lines 330-331 '...systematic changes in the wages of wage and salaried workers'. The structure 'the wages of wage' is not readable.

Author Response

 

 

Dear Reviewer,

 I would like to present our sincere gratitude for your excellent insights and suggestions provided for the article titled "Foreign Direct Investments - A Perspective of Sustainability: Evidence from Austria and Germany's Labor Market." Your expertise and guidance have significantly enriched the content and depth of the paper. Your constructive feedback has been instrumental in refining the study, and we are truly appreciative of your time and commitment to enhancing the quality of this research. Thank you for your thoughtful contributions!

In order to support our conclusion based on your observation we eliminate some paragraphs related to environmental challenges with no link to gender inequality, and introduced new ones for supporting  only changes in wage amount as a result of FDI and differences between male and female wages which were discussed in lines 378, 379, 392, 394. In the first part we linked sustainability goal (reduction of inequality) with FDI is very useful for understanding economic mechanisms for reaching sustainability goals.

 

We also proofread the text and corrected style and structure of sentences. (we made the correction on  lines 330-331 ').

Thank you so much!

Reviewer 2 Report

This paper aims to explore the relationship between FDIs and wage evolution in the host country.

However, I have some major remarks as follows:

The novelty and main findings (quantitative result) should be highlighted in the abstract.

The introduction section is quite general. Besides, each paragraph is short.

The research gap should be emphasized clearly in the introduction section.

A new section “Literature Review” should be included to discuss the past studies. Then, a table which shows the state of the art should be provided to show the research gap clearly.

Is there any improvement done on the model or new theory introduced in this study? It seems a preliminary study using regression model.

Besides, the observations are only 28. Therefore, the result may not be convincing. 

Overall, it lacks of comprehensive statistical analysis

Need proofreading.

Author Response

 

Dear Reviewer,

 I would like to present our sincere gratitude for your excellent insights and suggestions provided for the article titled "Foreign Direct Investments - A Perspective of Sustainability: Evidence from Austria and Germany's Labor Market." Your expertise and guidance have significantly enriched the content and depth of the paper. Your constructive feedback has been instrumental in refining the study, and we are truly appreciative of your time and commitment to enhancing the quality of this research. Thank you for your thoughtful contributions!

 

We highlighted the novelty and main findings (quantitative result) in the abstract.

We develop the introduction section, creating long paragraphs.

The research gap has been emphasized clearly in the introduction section (an exhaustive interpretation you can find in the discussion section).

A new section “Literature Review” had been included to discuss the past studies. Also we made a table which shows the state of the art should be provided to show the research gap clearly.

 

Is there any improvement done on the model or new theory introduced in this study? It seems a preliminary study using regression model.

It was provided a rationale for selecting the three regression models (Equations 1, 2, and 3) for the analysis. We explained why these models were chosen and how they relate to the research questions

The three regression models (Equations 1, 2, and 3) have been used in previous studies, but they are not published yet (It was used from another Cluster of Countries on MBA final Thesis presented on CNAM University –Paris and the results have been appreciated).

We provided a step-by-step explanation about the models and interpretation of the statistical indicators (R2, Multiple R, Adjusted R Square, P-value, etc.).

We emphasized the significance of separately analyzing wages for men and women (WMn, WMn-1, WFn, WFn-1). We explained the rationale behind this gender analysis and how it contributes to the research objectives.

Thank you so much!

Reviewer 3 Report

Abstract: 

Context and Gap: While the abstract mentions that the study contributes new evidence and insights, it doesn't explicitly state the context or gap in the existing literature. It would be beneficial to briefly mention why the relationship between FDIs and wage evolution, especially with regard to gender-related aspects, is a relevant area for investigation and what gaps this study aims to fill.

Methodology: The abstract lacks details about the research methodology used in the study. A brief sentence or two mentioning the data collection method, analytical approach, and any relevant statistical methods would help readers understand the study's rigor and validity.

Findings: The abstract only mentions that the research provides "new evidence and insights" without specifying any actual findings or results. While it's acceptable not to include specific results in the abstract, it's advisable to provide at least a glimpse of the key findings or trends to generate more interest among readers.

Practical Implications: The abstract mentions that the findings have implications for promoting gender equality and equitable distribution of benefits. Expanding on these implications and explaining how they could inform policy-making would strengthen the abstract.

Language and Clarity: The abstract could benefit from slight language refinements to ensure clarity and flow. For instance, the sentence "On sustainability roadmap, policy-makers beyond setting the new regulatory frame..." might be rephrased to improve readability.

Limitations: It is essential to acknowledge any limitations or potential weaknesses of the study. Including a sentence about the study's limitations would add transparency to the research and its scope.

 

Introduction/Material Methods

The section labeled "2.1" appears to be part of the main text or introduction rather than being part of the "Materials and Methods" section. It seems to discuss the theoretical background and context related to FDIs and their impact on wages, which is more appropriate for the introduction or literature review.

The "Materials and Methods" section typically focuses solely on the research design, data sources, data analysis techniques, and statistical methods used to investigate the research questions. It should not include theoretical discussions or empirical findings.

As such, it would be best to move the content labeled as "2.1" to the introduction or literature review section, where it can provide context and background information for the study. The "Materials and Methods" section should contain only information directly related to the research methodology.

The use of data from reputable sources such as UNCTAD and the World Bank enhances the credibility and reliability of the study. Mentioning these sources is essential for readers to understand where the data comes from and ensure transparency in the research.

Mention any assumptions made in the analysis, such as assumptions regarding linearity or normality of data. Also, discuss potential limitations of the study, including any constraints in the data, possible endogeneity issues, or other factors that could affect the accuracy of the results

Provide a rationale for selecting the three regression models (Equations 1, 2, and 3) for the analysis. Explain why these models were chosen and how they relate to the research questions

If the three regression models (Equations 1, 2, and 3) have been used in previous studies or are based on established methods, consider citing those studies or references to demonstrate the appropriateness of the chosen models for the current analysis.

Provide a step-by-step explanation of how the researchers will evaluate the models and interpret the statistical indicators (R2, Multiple R, Adjusted R Square, P-value, etc.). Explain the criteria for model selection and how statistical significance will be assessed.

Consider discussing model diagnostics, such as residual analysis, multicollinearity checks, and heteroskedasticity tests. These diagnostics help ensure the reliability and validity of the regression models.

Emphasize the significance of separately analyzing wages for men and women (WMn, WMn-1, WFn, WFn-1). Explain the rationale behind this gender analysis and how it contributes to the research objectives.

 

Discussion

The discussion provided is generally clear and presents a comprehensive analysis of the relationship between FDIs and wages in Austria and Germany. The text covers various statistical indicators, potential explanations for the observed relationships, and areas for future research. However, there are a few areas where clarity could be improved:

a) In paragraph 377, it would be helpful to explicitly state the specific statistical indicators used to analyze the data (e.g., regression analysis, correlation coefficients, etc.).

b) In paragraph 429, the phrase "with the Austrian and German hinterland" is not clear and may need rephrasing to clarify the intended meaning.

Suggestions for improvements:

a) Provide more details about the data sources and methodology used for the analysis. It would be helpful to include information on the data collection process, sample size, and any potential limitations of the data.

b) Consider presenting the statistical results and findings in more detail. Including specific values, coefficients, and confidence intervals would enhance the discussion's robustness and facilitate a better understanding of the study's outcomes.

c) Offer more in-depth explanations for the potential factors influencing the relationship between FDIs and wages. For example, discuss how labor market regulations, technological advancements, or industry-specific characteristics may interact with FDIs to affect wage dynamics.

d) Consider addressing the potential limitations of the current analysis more explicitly. Acknowledge any data constraints or assumptions made during the study and discuss how they might impact the interpretations and generalizability of the findings.

e) In paragraph 452, where a research gap is identified, consider suggesting ways to address this limitation in future research. For instance, propose potential data sources or methodologies that could be utilized to study the creation of new green jobs resulting from FDIs.

f) Conclude the discussion with a brief summary of the main findings and their implications for policy and further research. Highlight any key takeaways and how the study contributes to the broader field of FDIs and sustainability.

By incorporating these improvements, the discussion section will become more informative, robust, and well-rounded, offering valuable insights into the relationship between FDIs and wages in Austria and German

 

Conclusion:

The conclusion provided is generally comprehensive and highlights the main findings of the study. However, there are a few suggestions for improvements to enhance clarity and depth:

Clarify the gender-specific findings: In paragraph 472, the conclusion mentions that the impact of FDIs on wages differed between male and female employees in both countries, but it doesn't specify the exact nature of the differences. Consider providing more details on how FDIs influenced wages differently for male and female workers in Austria and Germany.

Avoid repetition: There are instances of repetition in the conclusion, such as mentioning that the regression equation does not consider other potential factors or interactions twice (paragraphs 483 and 492). Try to avoid redundancy and maintain a concise discussion of key points.

Discuss policy implications in more detail: In paragraph 513, where policy implications are mentioned, consider providing specific recommendations or actions that policymakers in Austria and Germany can take to ensure equitable distribution of FDIs' benefits among all employees, regardless of gender. This could include measures to promote fair wages, gender equality in the labor market, and initiatives to harness the potential of FDIs for inclusive economic growth.

Provide insights on limitations and future research: While the conclusion touches on limitations and the need for further research, it would be beneficial to elaborate more on these aspects. Discuss specific limitations of the study's methodology, data, and analysis. Additionally, provide suggestions for future research directions to address the identified gaps in the literature.

Address potential external factors: In discussing the observed decrease in wages in Germany and Austria, consider exploring potential external factors that could have influenced wage dynamics in these countries. For example, global economic trends, changes in trade policies, or geopolitical factors may have affected labor markets and wage levels.

Specify the study's significance: Emphasize the significance of the study's findings in the broader context of understanding the relationship between FDIs and wages in European nations. How do these findings contribute to the existing literature, and what implications do they have for policymakers, businesses, and researchers?

By incorporating these improvements, the conclusion will become more informative, focused, and insightful, leaving the readers with a clear understanding of the study's implications and the significance of its findings for the broader field of FDIs, wages, and sustainability in Austria and Germany.

 

Overall, the quality of English language in the provided text is good. The sentences are generally well-structured, and the ideas are effectively conveyed. The language used is formal and appropriate for a research paper or academic discussion.  With a few minor improvements in sentence structure, clarity, and consistency, the quality of English language in the text can be further enhanced.

Author Response

 

Dear Reviewer,

 I would like to present our sincere gratitude for your excellent insights and suggestions provided for the article titled "Foreign Direct Investments - A Perspective of Sustainability: Evidence from Austria and Germany's Labor Market." Your expertise and guidance have significantly enriched the content and depth of the paper. Your constructive feedback has been instrumental in refining the study, and we are truly appreciative of your time and commitment to enhancing the quality of this research. Thank you for your thoughtful contributions!

 

We highlighted the novelty and main findings (quantitative result) in the abstract.

We develop the introduction section, creating long paragraphs.

The research gap has been emphasized clearly in the introduction section (an exhaustive interpretation you can find in the discussion section).

A new section “Literature Review” had been included to discuss the past studies. Also we made a table which shows the state of the art should be provided to show the research gap clearly.

 

Is there any improvement done on the model or new theory introduced in this study? It seems a preliminary study using regression model.

It was provided a rationale for selecting the three regression models (Equations 1, 2, and 3) for the analysis. We explained why these models were chosen and how they relate to the research questions

The three regression models (Equations 1, 2, and 3) have been used in previous studies, but they are not published yet (It was used from another Cluster of Countries on MBA final Thesis presented on CNAM University –Paris and the results have been appreciated).

We provided a step-by-step explanation about the models and interpretation of the statistical indicators (R2, Multiple R, Adjusted R Square, P-value, etc.).

We emphasized the significance of separately analyzing wages for men and women (WMn, WMn-1, WFn, WFn-1). We explained the rationale behind this gender analysis and how it contributes to the research objectives.

Thank you so much!

Reviewer 4 Report

Dear Author(s),

The contribution to scholarshi abd originaity of your paper is good but can be improved further - You shoulf focus on theory and not context so that your contribution is generalizable.

The structure and clarity has to be improved. You can bring the research question at the forefront and structure your introduction as follows: What we know, what we do not know, how your study fills the gap and why it is important.

Your engagement with sources an als be improved further. You should reference and cite the following seminal paper on foreign direct investment:

Balasubramanyam, V. N., Salisu, M., & Sapsford, D. (1996). Foreign direct investment and growth in EP and IS countries. The economic journal, 106(434), 92-105.

You should also make more use of secondary headings to structure your paper and improve its clarity.

Good luck in your revisions!

Author Response

Dear Reviewer,

 I would like to present our sincere gratitude for your excellent insights and suggestions provided for the article titled "Foreign Direct Investments - A Perspective of Sustainability: Evidence from Austria and Germany's Labor Market." Your expertise and guidance have significantly enriched the content and depth of the paper. Your constructive feedback has been instrumental in refining the study, and we are truly appreciative of your time and commitment to enhancing the quality of this research. Thank you for your thoughtful contributions!

We improved the contribution and we focused on theory. The structure and clarity was also improved and we read with interest and cited:

Balasubramanyam, V. N., Salisu, M., & Sapsford, D. (1996). Foreign direct investment and growth in EP and IS countries. The economic journal, 106(434), 92-105.

Thank you so much!

Round 2

Reviewer 1 Report

Thanks for the authors for their research, intentions to expand it and for the corrections made according to the review. Given highlights provided in the text it looks that issues indicated in the previous review are addressed. Particularly, the authors make focus on gender equity in an economic context as sustainability aspect. At the present redaction, the article looks as a whole, complete and focused research, which provides novel contributions in th context of gender wage equity. Research findings may have both scientific and practical contribution in achievement of sustainability goals.

 

Author Response

Dear Reviewer,

I would like to express our sincere gratitude to you for your remarkable efforts and your dedication in correcting our work. We want to extend our best wishes for your future endeavors and may your academic career be marked by many contributions to your field of research. Thank you for your time and patience!

Author Response File: Author Response.docx

Reviewer 2 Report

Most of the comments have been addressed in the revised manuscript. However, the observations are only 28 in this study using regression analysis. Therefore, the result may not be convincing. Larger observations are required to make a better conclusion.

Minor revision is required.

Author Response

Dear Reviewer,

I would like to extend our sincere gratitude to you for your remarkable efforts and your dedication in correcting our work.

We made the larger observations in order to make a better conclusion. Thank you for your time and patience!

Author Response File: Author Response.pdf

Reviewer 4 Report

Dear Author(s),

Your research is commendable and makes a good contribution to theory.

Find below the following suggestions to further improve your work:

1) You should bring your research question upfront and support this with insights from the context in the following paragraph. This would enhance clarity, improve the logical sequence of the paper and emphasize your contribution.

2) You should also discuss what has been done in the research field so far and how your study contributes to this research gap. You do not reference key theories such as Braunstein (2006):

Braunstein, E. (2006). Foreign direct investment, development and gender equity: A review of research and policy.

3) You discuss a lot about context throughout the paper but this is not generalizable or theoretical. First emphasize your contribution to theory before backing it up with the context.

4) Your methodology section is well done.

5) You should explain that the institutional framework creates a gao in wage payments for male and female and why this is important. Make this generzlizable by explaing that by calculating this gender wage gap promoted by FDI as a result of the institutional framework, there could be occupational segregation, gender norms and expectations and this should be coorrected. Good luck in your revision!

Author Response

Dear Reviewer,

I would like to extend our sincere gratitude to you for your remarkable efforts and your dedication in correcting our work.

We made the larger observations in order to make a better conclusion.

We presented our research question upfront and support it with insights from the context in the following paragraph. We also made reference to the key theories such as Braunstein (2006). We also presented the contribution to theory before backing it up with the context. Finally we explained that the institutional framework creates a gap in wage payments for male and female and why this is important.

We want to express  our best wishes for your future endeavors and may your academic career be marked by many contributions to your field of research. Thank you for your time and patience!

Author Response File: Author Response.pdf

Round 3

Reviewer 2 Report

According to the previous comment, "the observations are only 28 in this study using regression analysis. Therefore, the result may not be convincing. Larger observations are required to make a better conclusion".

Based on the current version of revised manuscript, the results are similar with the previous version of manuscript (eg. Table 1, Table 2..). The larger observations as mentioned in the response are actually not reflected in the current results. Kindly check and confirm.

Minor editing of English language required

Author Response

Dear Reviewer,

 

Your excellent observations have provided us with a fresh perspective and highlighted important considerations for our future research endeavors.

We truly appreciate your attention to detail, especially regarding the sample size of 28 observations in our regression analysis.. We understand the importance of robust data in reinforcing the strength of our conclusions, and we are committed to taking your suggestion into account for our future research projects.

Your constructive guidance have been instrumental in enhancing the quality of our work. We are genuinely grateful for your commitment to advancing the field and ensuring the rigor of academic research.

 Based on your comments: ,, "the observations are only 28 in this study using regression analysis. Therefore, the result may not be convincing. Larger observations are required to make a better conclusion". we introduce in text the next section (green).

It's accurate to note that our study draws from a relatively modest dataset of 28 observations in our regression analysis, and despite the limited dataset, our analysis has yielded statistically significant findings. The model employed demonstrates a ro-bust explanatory power, elucidating approximately 86% of the variance in the de-pendent variable for the two nations.

We acknowledge that a dataset of 28 observations may appear somewhat diminu-tive, especially within the realm of economics research. However, it's essential to con-sider that the pronounced interaction effect we observed, coupled with minimal statis-tical error, has facilitated the accuracy of our model. It's worth noting that determin-ing the exact data requirements can be challenging, and it often depends on various factors. Some studies recommend a minimum sample size (N) of 8 for datasets with tight patterns and suggest pushing the minimum N to approximately 25 for datasets with higher variance, aligning well with the patterns in our analysis (Jenses & Quintana, 2020).

Our analysis, based on 28 observations, serves as a valuable contribution to the discussion. It underscores the importance of future research adopting larger datasets, particularly when employing more advanced regression models.

Although our results exhibit resilience given the constraints of our existing da-taset, it's undeniable that a more extensive dataset would significantly fortify the va-lidity of our conclusions in future research. A more extensive dataset would facilitate a more comprehensive and nuanced comprehension of the intricate relationship be-tween FDIs and wage dynamics, further advancing the field.

While we acknowledge the limitations imposed by our observation size, we be-lieve our study sets a precedent for future research in this area, urging for larger ob-servations to unveil deeper insights and patterns in regression analysis, and thus con-tribute to a more comprehensive understanding of the subject matter.

In our defence, is also the presentation provided by the Eberly College of Science about Regression Analysis https://online.stat.psu.edu/stat462/node/185/

”In small datasets, a lack of observations can lead to poorly estimated models with large standard errors. Such models are said to lack statistical power because there is insufficient data to be able to detect significant associations between the response and predictors. So, how much data do we need to conduct a successful regression analysis? A common rule of thumb is that 10 data observations per predictor variable is a pragmatic lower bound for sample size. However, it is not so much the number of data observations that determines whether a regression model is going to be useful, but rather whether the resulting model satisfies the LINE conditions. In some circumstances, a model applied to fewer than 10 data observations per predictor variable might be perfectly fine (if, say, the model fits the data really well and the LINE conditions seem fine), while in other circumstances a model applied to a few hundred data points per predictor variable might be pretty poor (if, say, the model fits the data badly and one or more conditions are seriously violated). For another example, in general we’d need more data to model interaction compared to a similar model without the interaction. However, it is difficult to say exactly how much data would be needed. It is possible that we could adequately model interaction with a relatively small number of observations if the interaction effect was pronounced and there was little statistical error”.

 

Once again, thank you for your time, expertise, and dedication!

Warm regards!