Responsible Consumption and Production
Do human capital and institutional environment constrain the impact of foreign direct investment inflows on economic growth in Africa?
This paper investigates the role of human capital and institutional quality in the nexus of foreign direct investment (FDI) and economic growth in 46 African countries between 2002 and 2018. Based on panel data modelling, the empirical findings suggest that FDI in itself does not promote economic growth in Africa; however, we observe that human capital and institutional quality play a supportive role in enhancing the positive spillover effect of FDI on economic growth in uppermiddle- income countries in the region. The findings for low-income and lowermiddle- income countries are mostly not significant. Given the initial conditions and absorptive capacity constraints in these countries, the positive spillover effects of FDI might be limited. From a policy perspective, the findings call for special attention by policymakers to improving the quality of their human capital and strengthening their institutions to maximize the benefits of FDI.
UNCTAD Insights: Fourth Industrial Revolution and FDI from SMEs: The Case of the Republic of Korea
The impact of Fourth Industrial Revolution (4IR) technologies on enterprises’ internationalization strategies is ambiguous. Although digital technologies lower information and transaction costs and facilitate international coordination of overseas activities, automation technologies can push enterprises to reshore foreign operations. This paper analyses the impact of 4IR technologies on the foreign investment decisions of small and large enterprises in one of the most technologically advanced countries in the world: the Republic of Korea. The results indicate differential impact across enterprise sizes and technologies. The propensity of SMEs to invest overseas upon the adoption of 4IR technologies, especially digital technologies, increases relatively more than that of larger firms. The results have important implications for investment and development policies in the region. The findings highlight the key role of FDI by Korean SMEs in the technological development of neighbouring Asian economies, calling for increased attention to smaller players in investment promotion.
Does language affect the location choice of developing-economy MNEs? The case of Moroccan outward FDI
The present paper investigates the effect of linguistic distance on location decisions of Moroccan outward foreign direct investment (FDI) using panel data on 54 host countries from 2007 to 2021 and the robust weighted least squares estimation method. The results show that the higher the share of French- and Arabic-speaking populations, the more the host country attracts FDI from Morocco. Also, the results show that the higher the share of the English-speaking population, the less the host country attracts FDI because English-speaking countries tend to adopt institutional structures (the Anglo-Saxon way of governance) that differ from the French model inherited by Morocco during its colonization. For Spanish, there is no effect on the location decisions of Moroccan multinational enterprises because of the language’s marginalization at the formal level. The study highlights important policy considerations for home and host countries in terms of investment policy and investment promotion, language-in-education policies, and the role of international cultural and linguistic institutes in home and host countries.
How does policy create an opportunity window for China’s digital economy?
From the initial stage of “bringing in” foreign firms to the stage of “going out” (going global), the four-decade development process of China is not just about its participation in globalization, but also about Chinese firms’ innovation based on global knowledge sourcing. This study provides a new interpretation of the technology catching-up of Chinese firms, incorporating the theory of windows of opportunity, considering policies as windows for international knowledge sourcing and technology catch-up. It assesses the impact on innovation performance of inward and outward foreign direct investment policies as institutional windows for knowledge sourcing, aims to identify the effective width of windows of opportunity and establishes how these policies lead to outstanding innovation performance by latecomers over time by leveraging external knowledge. Threshold models were adopted using data from multiple sources on 187 Chinese listed firms in the digital industry, including 2,807 firm-year observations. The results show that nonlinear relationships exist between institutional windows and innovation performance. The roles and mechanisms of institutional windows of opportunities in Chinese firms’ knowledge-sourcing process demonstrate the decisive effects of the Government’s internationalization policies and their role in promoting the development of Chinese digital technologies. Implications are elaborated for both policymakers and Chinese multinational firms in the digital industry.
Articles: Deep trade integration and North-South participation in global value chains
Do comprehensive trade agreements increase the participation of States in global value chains (GVCs) and contribute to their development? Although there is extensive evidence in the trade literature that deep preferential trade agreements (PTAs) can increase States’ bilateral export of final goods and, by implication, contribute to local development, much less is known about the characteristics of this effect on GVC relations. This paper answers the question in the framework of a gravity model and uses a comprehensive dyadic data set on trade in GVCs, PTAs, export and other characteristics for 188 countries and economies between 1990 and 2018. Results provide robust evidence that deep PTAs increase members’ bilateral trade in GVCs over the long term, especially when these agreements involve at least one developing country or economy and include provisions that support investment. These results underscore that GVC-facilitating deep PTAs are a powerful policy tool that can mobilize the potential of production and trade in GVCs for development.
International project finance deals as indicators of productive cross-border investment: UNCTAD’s approach
International project finance (IPF) can channel private cross-border capital toward productive investments in (mostly) infrastructure sectors, especially where government budget constraints are tight. Moreover, it has recently gained importance as a tool to finance the Sustainable Development Goals (SDG) and bridge the large infrastructure gap for climate megaprojects. In such contexts, projects often require international capital along with expertise and credibility; they also require a project-specific risk allocation that IPF accommodates. This research note assesses project finance in the context of international productive investments, its link with other forms of international investment (mergers and acquisitions, and cross-border greenfield investments) in the data used, and its use in UNCTAD’s publications. Data is a lynchpin for analysis but is not unproblematic. The note explores incongruences and their impact. It also outlines UNCTAD’s conceptual choice to capture ongoing productive investments in infrastructure through project finance in the world economy.
En Dinamarca, colegios en medio de los árboles
En Krudthus, unos 30 kilómetros al norte de Copenhague, los niños de la escuela infantil del bosque pasan la mayor parte del día al aire libre. Los pequeños se ocupan de identificar los insectos que se esconden entre las piedras y las ramas caídas, siguen el ritmo de las estaciones a través de la evolución de los árboles y aprenden los ciclos de la vida observando la descomposición de las plantas y de los animales muertos. Entre dos actividades, saltan y retozan antes de ir a pescar o de andar en bicicleta entre macizos de anémonas silvestres.
En México, las mujeres en primera línea para salvar los manglares
Cuando era una niña, Erika Barnet, indígena de territorio seri, al noreste de México, veía las plántulas de manglar ser arrastradas por las olas. Recogía los pequeños tallos y los llevaba a su casa, situada frente a la costa.
Zoom: Nos vies en Technicolor
Elles nous sont à la fois étrangères et familières. Ce sont des photos d’avant l’ère du numérique et des selfies, d’avant Instagram. De leurs couleurs vintage et du grain argentique sourd un curieux parfum d’innocence, de mélancolie aussi. Les protagonistes n’ont pas de nom. On ne sait rien d’eux ni de celui – ou celle – qui a fixé un jour sur pellicule ces scènes de vie ordinaire. Tout juste connaît-on le pays d’origine et l’année (dans la série présentée ici, des images prises aux États-Unis et au Royaume-Uni entre les années 1950 et 1970).
Papuan chief Mundiya Kepanga: The voice of ancient trees
Tari, Papua New Guinea, 1965. A boy is born on a carpet of ancient ficus leaves in the high deepland forest. Mundiya is his name, pronounced “Mudeejay”.
Robert Pogue Harrison : « Il existe un lien fondamental entre la poésie et la forêt »
Our guest: Akira Mizubayashi: The music of words
Créditos de carbono: ¿los árboles que no dejan ver el bosque?
El valor de un árbol talado es fácil de cuantificar: el precio de la madera alcanza actualmente unos 350 dólares. ¿Pero cuál es el precio de un árbol en pie? ¿Cómo calcular su aporte a la biodiversidad, al clima, a la vida humana y la agricultura? Un bosque proporciona refugio a las aves, retiene el carbono, mantiene el frescor y regula las precipitaciones. Pero los servicios ecológicos que el bosque proporciona son difíciles de evaluar. De ahí que surgiera una nueva idea.
The Congo Basin forest, a fragile treasure
The old colonial buildings of the University of Kisangani in the Democratic Republic of the Congo (DRC) were not always dedicated to the study of environmental sciences. Until the 1970s, the decrepit red brick buildings housed tobacco warehouses. It was then that the first shrubs were planted in the courtyard of this former factory, by a Polish biologist.
Jens Liljestrand: “I wanted to capture the feeling of anger in the face of wildfires”
Les populations autochtones, rempart contre la déforestation
« Si la forêt est toujours là, c’est grâce aux populations autochtones. Aujourd’hui, c’est la mission la plus importante car la forêt protège non seulement notre vie, mais aussi celle de l’humanité », déclare Txai Suruí, militante du peuple Paiter Suruí et coordinatrice du mouvement de la jeunesse autochtone du Rondônia, au Brésil.
Circunnavegación: Los sitios del Patrimonio Mundial en el centro de la conservación de la biodiversidad
La pérdida de biodiversidad amenaza la supervivencia de innumerables especies y la estabilidad de los ecosistemas de nuestro planeta. El problema es particularmente grave para los sitios del Patrimonio Mundial de la UNESCO, que representan más de una quinta parte de la biodiversidad mundial.
Mundos inexplorados en los ‘fosos celestiales’ de China
En 2016, en el distrito chino de Leye, en la ciudad de Baise de la región autónoma Zhuang de Guangxi, mi equipo y yo bajamos hasta el fondo del tiankeng de Dashiwei, 600 metros bajo la superficie. En mandarín, el sustantivo tiankeng o ‘foso celestial’ es lo que los geólogos denominan un sumidero, una dolina o depresión del terreno generada por el derrumbe de terrenos kársticos formados durante millones de años en los estratos de rocas calcáreas.
Ideas: Las vikingas salen de la sombra
Durante mucho tiempo, la palabra “vikingo” hacía pensar en un hombre alto y corpulento, ataviado con un casco, que blandía un hacha y navegaba en la proa de un barco listo para saquear e incendiar aldeas enemigas. Sin embargo, hoy en día, como resultado de investigaciones interdisciplinarias y la omnipresencia de la historia medieval no solo en museos y universidades, sino también en el cine y en las redes sociales, la idea de los vikingos ha cambiado.