Does Greenfield Foreign Direct Investment Inflow Contribute in Socioeconomic Development? Empirical Evidence from Developing Countries

Authors

  • Ali Raza The University of Haripur
  • Shahid Akbar University of Swabi, Pakistan.
  • Zahid Raza University of Karachi

DOI:

https://doi.org/10.52131/pjhss.2021.0903.0152

Keywords:

Human Development Index HDI, Greenfield-FDI, Education, Health, Remittances, Foreign Development Assistance

Abstract

This study aims to assess the impact of Greenfield-Foreign Direct Investment (FDI) inflows on the socio-economic development of ten developing countries. Developing economies rely on investment from developed countries, especially Greenfield investment. Greenfield investment is the new capital inflow to the host country's economy that helps to improve economic activities, boosts economic growth, and improves socio-economic welfare. This study has used Greenfield investment as the target-independent variable and other controlled variables remittances, aid, inflation, population, and trade openness. At the same time, socio-economic development, health, economic growth, and education are dependent variables. For this purpose, Pooled Mean Group (PMG) technique/Panel Autoregressive-Distributed Lag (ARDL) has applied for estimation purposes from 1990 to 2017. The empirical findings have shown that Greenfield-FDI has a long-term statistically significant and positive effect on economic growth, health, education, and socio-economic development. In comparison, remittances and official development assistance have positive and negative impacts on the study's dependent variables. The population also has a positive effect, whereas inflation and trade have mixed results. Outcomes of this study advise that policymakers should adopt attractive investment policies to enhance more foreign investment and utilize it efficiently, thereby promoting sustainable development. The government should announce firms to invest in human capital, which will impact productivity.   

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Author Biographies

Ali Raza, The University of Haripur

Lecturer, Department of Management Sciences,

Shahid Akbar, University of Swabi, Pakistan.

Department of Economics

Zahid Raza, University of Karachi

M.Phil. Scholar, Department of Criminology

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Published

2021-12-28

How to Cite

Raza, A. ., Akbar, S., & Raza, Z. . (2021). Does Greenfield Foreign Direct Investment Inflow Contribute in Socioeconomic Development? Empirical Evidence from Developing Countries. Pakistan Journal of Humanities and Social Sciences, 9(3), 469–481. https://doi.org/10.52131/pjhss.2021.0903.0152

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Section

Articles