Foreign Direct Investment (FDI), Investment in Construction and Poverty in Economic Crises (Denmark, Italy, Germany, Romania, China, India and Russia)

Tatyana Sukhadolets, Elena Stupnikova, Natalia Fomenko, Nadezhda Kapustina and Yuri Kuznetsov
Additional contact information
Tatyana Sukhadolets: Analytical Center Social Infrastructure, 115088 Moscow, Russia
Elena Stupnikova: Institute of Economics and Finance, Russian University of Transport (MIIT), 127994 Moscow, Russia
Natalia Fomenko: Department of the Theory and Technology of Management, Plekhanov Russian University of Economics, 117997 Moscow, Russia
Nadezhda Kapustina: Department of Economic Security and Risk Management, Financial University under the Government of the Russian Federation, 125993 Moscow, Russia
Yuri Kuznetsov: Faculty of Economics, Saint Petersburg State University, 199178 Saint Petersburg, Russia

Economies, 2021, vol. 9, issue 4, 1-18

Abstract: This study aims to examine the impact of foreign direct investment (FDI), investment in construction and poverty in various countries. The Russian Federation invests heavily in construction and it is located both in Europe and Asia. Russia is usually described as a European country (while 70% of its territory is in Northern Asia, 80% of the population resides in Europe). That is why in this document both developed and emerging countries are considered; the former are represented by the EU members of different economic levels and the latter by BRICS countries. We looked at economically different countries to determine the best differentiated data in order to answer the question: “Why does a high level of poverty persist in Russia if Russian officials have repeatedly reaffirmed their commitment to the implementation of the Sustainable Development Goals (SDGs) by investing heavily in construction and attracting FDI?”. For the estimation, we used an autoregressive distributed lag (ARDL), considering cointegration and heteroscedasticity, in which the current values of the series depend both on the past values of this series and on the current and past values of other time series. Having received statistical data, we were able to compare the economic development of countries with some economic growth theories. 4–5% FDI share of the GDP helps to contain the negative impact of financial crises. Investment in construction supports the economies of countries in the long term and maintains or reduces the poverty level by increasing the assets of the population. Empirical data also helped us to evaluate the economic growth patterns and poverty in these seven countries. China and the Russian Federation will find themselves at different “poles”. China uses several theories and models simultaneously for economic development and poverty reduction and the Russian Federation does not keep to an established theory or a model of economic growth.

Keywords: poverty; foreign direct investment; construction in investment; GINI; Denmark; Italy; Germany; Romania; China; India; Russian Federation (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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