Search Results (512)

This paper examines the effect of trade openness on corporate tax revenue in the Middle East and North Africa (MENA) region, where increased economic integration might incite more business activity and expand taxable corporate income but also intensify losses due to practices such as profit shifting. The study follows a quantitative empirical approach and applies a panel ARDL model to secondary data collected from international databases (World Bank and IMF), such as GDP, trade openness (exports and imports as % of GDP), inflation, corporate tax revenues, foreign direct investment inflows and tax evasion via informal economies, for a sample of ten developing countries from the MENA region, including Morocco, Tunisia, Egypt, Jordan, Lebanon, Algeria, Saudi Arabia, Oman, the United Arab Emirates, and Bahrain, over the period 2010–2023. We employ a PMG ARDL model to study our panel data, allowing the analysis of both short-run and long-run effects to investigate the relationship between trade openness and tax revenues. Our results show that in the long run, export-driven economies generate higher corporate tax revenues by expanding profitability and the tax base, and imports also positively affect revenues, indicating that trade openness stimulates economic activity. Conversely, FDI inflows reduce corporate tax revenues, consistent with profit shifting and tax incentives in developing countries. GDP growth does not necessarily increase tax receipts, likely due to tax elasticity effects and growth-oriented tax structures. Also, tax evasion appears to decline, likely reflecting improved compliance, and no significant short-run effects are observed. The results contribute to the literature on tax compliance and economic integration in the case of open economies in developing countries. From a practical perspective, our findings have implications for policymakers and tax regulators in the MENA region, as they highlight the dual nature of globalization for developing countries and their tax systems and underscore the need for effective compliance measures in trade and investment policies. Full article

This research delves into the interconnectedness of economic growth, environmental sustainability, and social development within the six Gulf countries (GCC): Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Employing ARDL and VECM methodologies, the study examines the short- and long-run dynamics between these variables from 2010 to 2023. Key findings reveal that while digital initiatives, foreign direct investment (FDI), trade openness, and political stability positively influence economic growth and social development, investments in renewable energy and environmental sustainability may initially impose short-term economic costs. However, these investments are crucial for long-term sustainability and contribute to enhanced social well-being. To foster a more sustainable and equitable future, the study recommends that GCC policymakers prioritize balanced strategies that promote economic growth, environmental sustainability, and social development simultaneously. This study details targeted investments in digital infrastructure, fostering innovation, encouraging sustainable practices, and implementing effective policies to mitigate the short-term costs of transitioning to a more sustainable economy. By adopting such a holistic approach, the GCC states can navigate the challenges and opportunities of sustainable development and ensure a prosperous future for their populations. Full article

This study analyzes the long-run relationships between digitalization, investment, innovation, and economic growth in connection with the energy transition in the SPRING-F group (Spain, Poland, Romania, Italy, the Netherlands, Germany, and France) using annual data for the period of 2000–2024. The analysis starts from the premise that digitalization affects economic performance not only directly, but also through structural transmission mechanisms linked to investment and the energy transition. To capture these dynamics, this study employs three complementary panel ARDL models. The first model explains economic growth (GDP per capita) as a function of digitalization, capital accumulation, R&D expenditure, renewable energy consumption, trade openness, and foreign direct investment. The second model estimates gross capital formation (GCF) in order to assess the investment transmission channel. The third model explains renewable energy consumption (RNEC) in order to capture the sustainability dimension. The results show that trade openness and capital accumulation are the strongest long-run drivers of economic growth in the SPRING-F group. Internet use, R&D expenditure, and FDI also display positive long-run associations with GDP per capita, whereas fixed broadband subscriptions and renewable energy consumption enter the growth equation with negative coefficients, suggesting that digital infrastructure and the green transition do not automatically generate immediate growth gains. The GCF model confirms that investment acts as an important transmission mechanism, especially through the robust GDP–GCF linkage. The RNEC model indicates that the energy transition is positively associated with investment, innovation, and trade openness, while GDP and digital infrastructure remain negatively associated with the renewable energy share. Overall, the findings point to a conditional and nonlinear relationship between growth, digitalization, investment, and sustainability, with the sustainability channel remaining more specification-sensitive than the growth and investment equations. The long-run results for the GDP equation should also be interpreted with additional caution, given the comparatively weaker cointegration evidence for Model 1. Full article

Foreign direct investment (FDI) plays a vital role in Africa’s economic development; however, the rapidly expanding body of literature on this topic remains highly fragmented. This dispersion creates a significant research problem, obscuring structural evolution, persistent thematic gaps, and collaborative networks within the field. To address this, a bibliometric analysis is necessary, as it provides an objective, macro-level methodology capable of synthesising vast amounts of publication data and uncovering hidden intellectual structures that traditional systematic reviews cannot easily capture. Consequently, this study maps the development of FDI research in Africa by analysing and visualising scientific publications to reveal the structure, evolution, and interdisciplinary nature of the field, identifying leading scholars, collaboration networks, and core thematic areas. Using data from the Scopus database, the study examines 2003 documents through Biblioshiny and VOSviewer. The findings are presented in three sections. The descriptive analysis shows a steady rise in FDI publications from 1986 to 2024, with strong growth in the past two decades. The most productive institutions are in South Africa and Nigeria, while major contributing countries include South Africa, the United States, China, and the United Kingdom. Keyword and collaboration analyses highlight themes such as Sub-Saharan Africa, economic growth, capital flow, renewable energy, and natural resources. Ultimately, this mapping goes beyond descriptive trends to provide critical analytical insights, revealing a significant thematic shift from traditional economic paradigms toward sustainable development and environmental economics. Practically, these findings offer strategic guidance for policymakers and investors by identifying key institutional hubs and regional knowledge gaps. Scientifically, the study establishes a foundation for future research by directing attention toward underexplored, emerging issues such as climate resilience, digital transformation, and subnational FDI dynamics. Full article

This research investigates the influence of economic, energy, and institutional variables on sustainable economic growth for Pacific Asian countries using Adjusted Net Savings (ANS) as a more refined measure of sustainable development. Using an unbalanced panel dataset for the period 1996 to 2021, second-generation panel data analysis is conducted to capture both long-run and distributional relationships, addressing potential concerns about cross-sectional dependence. The results indicate the presence of long-run relationships that are stable for both sustainable development itself and for its defining factors. Foreign direct investments (FDI) are found to have the most significant influence on sustainable development for all quantile values, underlining their central importance to long-run capital accumulation efforts. Renewable energy consumption helps increase sustainability outcomes for countries with lower savings performance values, while renewable energy production is found to have a modest but positive influence for each quantile of the distribution of outcomes. Natural resource wealth is seen to have non-linear effects on outcomes, with countries with lower savings values being adversely affected, while countries with higher savings values are beneficially affected. The presence of institutional factors is an enabler for countries with lower values of sustainable development performance. Full article

The study sheds light on the subtle interactions among financial development, foreign direct investment (FDI), and the quality of regulatory frameworks, with particular reference to their deep influence on renewable energy use and carbon emissions across 22 developed countries from 2002–2021. The results show an interesting tendency: Financial development and FDI will reduce reliance on renewable energy, whereas a significant increase in GDP per capita will increase reliance. Secondly, carbon emissions have a negative association with the adoption of renewable energy and financial development, though both reduce environmental quality; there is a positive relation between real gross domestic product (GDP) and energy depletion in terms of these toxic emissions. The significant role of regulatory quality as a moderator in this process is particularly striking. There is a direct correlation between financial stability and more robust regulation, resulting in reduced financial liquidity available for investing in renewable projects and restricting the free flow of clean FDI. Crucially, the paper argues that when combined with strong regulation, FDI is more likely to contribute to reductions in emissions, while FYGD, nevertheless regulated at a high level of quality, should raise emissions. Winding up, the result indicates that neither financial depth nor institutional quality, in isolation, is sufficient to deliver significant environmental improvement. Thus, it is urgent to adopt sound green finance policies and to formulate focused regulatory systems that integrate financial development and foreign direct investment with a broader sustainability agenda. Full article

This study investigates how geopolitical risk shaped the green economic efficiency (GEE) of 19 countries in the G20 group from 2000 to 2022. Using the Super-SBM model, we construct a cross-country measure of GEE and empirically examine both its determinants and underlying mechanisms. The results show that rising geopolitical risk significantly undermines GEE, indicating that external uncertainty disrupts countries’ ability to balance economic growth with environmental performance. Mechanism analysis reveals that geopolitical tensions heighten energy security concerns, leading to increased fossil fuel consumption, and trigger exchange rate depreciation to decrease green economic efficiency. Moreover, foreign direct investment mitigates the adverse effects of geopolitical risk by facilitating technology spillovers and capital inflows. Moreover, geopolitical risks have different impacts on the efficiency of a country’s green economy, varying across levels such as the country’s economic development level, resource endowment, and trade openness. The findings highlight geopolitical risk as a constraint on global green transition. Policymakers should strengthen energy source diversity, stabilize exchange rate environments, and promote FDI to enhance national resilience. Building institutional capacity is essential in sustaining green economic efficiency under rising geopolitical uncertainty. Full article

Foreign direct investment (FDI), particularly high-quality FDI, serves as a critical driver in achieving the Sustainable Development Goals (SDGs). However, understanding how to enhance FDI quality remains a pressing challenge for policymakers and researchers alike. As a core determinant of FDI quality, the business environment necessitates a thorough examination of its underlying mechanisms. Drawing on provincial-level data and firm-level data from listed foreign-invested enterprises in China spanning 2011 to 2023, this study constructs an FDI quality evaluation index system aligned with the goal of sustainable development at the micro-enterprise level, empirically examines the impact of the business environment on FDI quality. Our findings reveal a consistent upward trajectory in China’s FDI quality throughout the sample period, with the business environment exerting a significantly positive influence. Dimensional decomposition reveals that the government-legal environment and openness to foreign investment demonstrate particularly pronounced positive effects. These effects operate primarily through three mechanisms: stimulating entrepreneurship, accelerating digital transformation, and optimizing supply chain configurations. Moreover, these effects are more pronounced among wholly foreign-owned enterprises, firms with superior knowledge absorption capacity, and those facing higher perceived economic policy uncertainty. Extended analysis further demonstrates that enhanced FDI quality makes substantial contributions to sustainable development outcomes. This study extends the research on FDI quality from the macro level to the micro level, broadening the research perspective of related fields. The conclusions not only furnish robust theoretical evidence on how business environments foster high-quality FDI, but also provide actionable policy insights for countries seeking to optimize their institutional frameworks to attract quality foreign investment in alignment with the SDGs. Full article

Regulatory bodies have observed an increase in environmental issues due to firms’ interactions with the environment. Nonetheless, reconciliation actions are emerging, driven by the pursuit of sustainable development goals. This study investigated the impact of financial development and foreign direct investment on ecological footprints in sub-Saharan African nations, while examining the mediating role of regulatory quality and control for corruption. The research was motivated by the growing environmental degradation in the region amid growing capital inflows and financial market expansion. Using panel data of 18 sub-Saharan African countries between 1996 and 2023, sourced from the World Bank database and World Governance Indicators, we employed an Autoregressive Distributed Lag model to assess the short- and long-run relationships among ecological footprint, financial development, foreign direct investment, and key institutional factors. Results from the baseline model show that financial development significantly increases ecological footprints, while the effect of foreign direct investments is insignificant in the absence of institutional factors. However, when mediating variables are introduced, foreign direct investment significantly worsens ecological footprint, and regulatory quality and control for corruption show strong moderating effects, confirming the pollution haven hypothesis. Also, all control variables (trade openness, gross domestic product per capita, government expenditure, and population density) show significant outcomes with environmental sustainability. The findings underscore the importance of institutional factors in shaping sustainable foreign direct investment flows and financial systems. These research findings offer policy pathways for aligning investment strategies with sustainability goals in sub-Saharan Africa. Recommendations include strengthening the nation’s institutional framework, linking foreign direct investment to environmental compliance and promoting green finance policies across the region. Full article

This study examines the short-run dynamics and long-run determinants of bilateral trade between Saudi Arabia (KSA) and Jordan during the period of 1995–2024 using the autoregressive distributed lag (ARDL) bounds testing approach. Employing a country-pair time series framework, the analysis examines how economic growth, foreign direct investment (FDI), inflation differentials, and crude oil prices affect trade volume between the two countries over time. The ARDL bound test confirms the presence of long run cointegration among the variables. The Long-run results suggest that crude oil prices, inflation differential, and FDI exert positive and statistically significant effects on bilateral trade, while Saudi economic growth and FDI show negative long-run effects, suggesting that Saudi’s economy structural characteristic and domestic absorption may decrease the demand for Jordanian’s products in the long-run. The short-run results reveal a negative and statistically significant error-correction term, confirming convergence toward long-run equilibrium with approximately 32.16% of deviations corrected each year, implying a moderate speed of adjustment following economic shocks. In the short-run, economic growth, FDI, Inflations differentials, and oil prices exert significant but mixed effect on trade volume, with oil prices emerging as the most influential determinant. Several variables displayed lagged responses due to adjustment costs, production constraints, and contractual rigidities between the two countries. Overall, the findings contribute new time-series evidence on the macroeconomic drivers of bilateral trade between an oil-exporting economy such as Saudi Arabia and a neighboring non-oil-exporting partner like Jordan, offering policy insights for strengthening trade integration and economic cooperation. Full article

This study examines whether inward foreign direct investment (FDI) has ultimately supported or hindered sustainable economic growth in Türkiye by analyzing the impact of FDI stocks on output per worker within an endogenous-growth framework. Using annual data for 1970–2024 and an ARDL approach, the study estimates the short- and long-run effects of FDI stock, distinguishes these effects from those of domestic capital stock, and assesses whether they remain stable across different sub-periods. The results show that FDI stock has a robustly negative impact in the long run, and this adverse long-run effect persists when the sample is split into pre- and post-2001 crisis subsamples, while domestic capital does not emerge as a significant driver of growth. Human capital—measured by years of schooling—also displays a negative long-run association with output per worker, whereas institutional quality has a strong positive effect. The study contributes to the Turkish FDI–growth literature by providing, to the best of available knowledge, the first time-series evidence that focuses on FDI stocks and jointly models foreign and domestic capital stocks, and by documenting a long-run-negative effect of FDI stock that is robust over time. The findings imply that policy in Türkiye should shift from maximizing the volume of FDI toward improving its sectoral structure and governance, upgrading education quality and retaining high-skilled workers, and implementing concrete rule-of-law reforms. Full article

This paper investigates the determinants of tourism in selected Asian economies over the period 1995–2024, employing the Augmented Mean Group (AMG) estimator to account for cross-sectional dependence, unobserved common factors, and heterogeneous country-specific dynamics. As a robustness check, method of moments quantile regressions (MMQRs) are applied to examine how the effects of GDP, consumer prices, foreign direct investment (FDI), trade openness, and institutional quality vary across the distribution of tourism inflows. The results indicate that GDP consistently promotes tourist arrivals, particularly in countries with lower to median tourism inflows, while higher consumer prices reduce tourism demand across all quantiles. FDI and trade openness positively influence tourism, with FDI’s impact amplified in countries with stronger institutional quality. The MMQR analysis further highlights substantial heterogeneity: emerging economies benefit more from FDI and institutional reforms, whereas advanced economies rely primarily on GDP growth, trade integration, and high-quality tourism services. Overall, the findings underscore the complementary roles of macroeconomic fundamentals, foreign investment, trade, and governance in supporting sustainable long-run tourism growth in Asia, while demonstrating the value of distributional analysis for capturing heterogeneous effects. Full article

Vietnam’s sustained poverty reduction has coincided with rising foreign direct investment (FDI) and a major shift from income-based to multidimensional poverty measurement, raising challenges for interpreting poverty dynamics and the role of FDI across regimes. This study examines the relationship between FDI and poverty reduction in Vietnam by accounting for poverty persistence, regional heterogeneity, and changes in poverty measurement. Using provincial panel data for 2002–2022 and a System GMM framework, three main findings emerge. First, poverty dynamics differ across measurement regimes: during the income-poverty period (2002–2016), poverty dynamics exhibited lower persistence and faster convergence, whereas under the multidimensional framework (2016–2022), poverty became more persistent and convergence slowed, reflecting the increasingly structural nature of remaining deprivation. Second, FDI is negatively associated with poverty under both measures, but its effects are conditional and uneven. Interaction effects indicate that the poverty-reducing impact of FDI depends on provincial income levels and initial deprivation, with weaker effects in provinces facing deeper multidimensional poverty. Third, higher FDI exposure is associated with greater poverty persistence, reflecting the spatial concentration of FDI in better-off regions rather than a poverty-increasing effect. The analysis is subject to limitations related to measurement regimes, and results are interpreted as conditional associations. Policy implications highlight that the poverty-reducing effects of FDI depend critically on investment quality, the strength of local production linkages, and complementary public spending, particularly in provinces facing persistent deprivation. Full article

This paper analyzes the impact of corruption on foreign direct investment (FDI) in the Portuguese-speaking African countries (PALOP) economies between 2006 and 2018. The focus lies on Angola, Cape Verde, Guinea-Bissau, and Mozambique since, according to Transparency International, they exhibit intermediate to low levels on the Corruption Perceptions Index. Despite sharing historical and cultural ties, as former Portuguese colonies, no research has focused on the impact of corruption on FDI in the PALOP economies, to the best of our knowledge. To accomplish this, we use an Instrumental Variables Fractional Probit Regression applied to data from the World Bank Enterprise Surveys, which gather information for 2180 firms. The results show that, on average, corruption does not significantly affect FDI in PALOP economies. Trade, credit, and firm size emerge as key FDI determinants, while investment levels and tax rates are not relevant. Corruption has negligible effects on FDI in manufacturing but boosts FDI in services. Interestingly, while corruption has no significant effect on FDI for small and medium firms, a positive, significant impact is revealed for large firms. Finally, corruption’s overall FDI impact is the same across PALOP countries, except in Angola, where it negatively influences FDI compared to Mozambique. Full article

This study examines the evolution, heterogeneity, and short-term prospects of export performance in seven Central and Eastern European (CEE) economies—Croatia, Czech Republic, Hungary, Poland, Romania, Bulgaria, and Slovakia—over the period 1995–2024. Using annual World Bank data, exports are modeled as a share of GDP to ensure cross-country comparability and to capture differences in trade dependence. The analysis combines descriptive and inferential statistics with Augmented Dickey–Fuller tests, non-parametric comparisons, Granger causality analysis, and country-specific ARIMA models to investigate export dynamics, the role of foreign direct investment (FDI), and future export trajectories. The results reveal a common long-term upward trend in export intensity across all countries, driven by European integration and structural transformation, but with pronounced cross-country differences in export dependence and volatility. Highly open economies such as Slovakia, Hungary, and the Czech Republic exhibit strong export performance alongside greater exposure to external shocks, while larger domestic markets such as Poland and Romania display lower export intensity and greater stabilization. Granger causality tests indicate that FDI contributes to export growth in several economies, often with multi-year lags, highlighting the importance of absorptive capacity and institutional quality in translating investment inflows into export competitiveness. ARIMA-based forecasts for 2025–2027 suggest continued export expansion and relative stabilization despite recent global disruptions. This study’s primary contribution lies in integrating comparative export analysis, causality testing, and short-term forecasting within a unified econometric framework, offering policy-relevant insights into export-led growth and economic convergence in post-transition European economies. Full article