The nexus between FDI and human development: non-linear evidence from South Asia
Ranjan Dash,
Deepa Gupta and
Aditi Mishra
International Journal of Social Economics, 2024, vol. 52, issue 3, 325-342
Abstract:
Purpose - Human development is critical for fostering economic growth and development. Given the importance of human development, this study examines the asymmetric impact of Foreign Direct Investment (FDI) on human development by decomposing total FDI into positive and negative shocks in five South Asian countries from 1990 to 2021. Design/methodology/approach - The study uses the panel Non-linear Autoregressive Distributive Lag model (NARDL) to examine asymmetric long and short-run effects of FDI. Further, the direction of causality between HDI and FDI is examined using the recently developed (Joudiset al., 2021) panel granger non-causality test. Findings - The positive and negative FDI shocks positively impact HDI, but positive shocks have a higher effect than negative shocks in the long run. The Wald Test rejects the long-run symmetric effect, confirming the asymmetric relationship between FDI and human development. More importantly, causality results reveal the FDI-led HDI and HDI-led FDI development in South Asia. Practical implications - FDI should be encouraged by formulating a well-tailored policy intervention. The development policies should be interlinked with FDI policies. Absorptive capacities such as infrastructure facilities, a threshold level of human capital, and institutions should be strengthened to attract higher FDI into high-tech sectors. Originality/value - Unlike the previous empirical studies, this study provides asymmetric evidence between FDI and human development in South Asia. Peer review - The peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-05-2023-0380.
Keywords: FDI; Asymmetric effect; Human development; South Asia; F21; H52; I31 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:ijse-05-2023-0380
DOI: 10.1108/IJSE-05-2023-0380
Access Statistics for this article
International Journal of Social Economics is currently edited by Professor Terence Garrett
More articles in International Journal of Social Economics from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().