Nadia Doytch

Institutional Determinants of Sectoral FDI in Eastern European and Central Asian Countries: The Role of Investment Climate and Democracy

We study the determinants of the sectoral distribution of foreign direct investment (FDI) in Eastern Europe and Central Asia, focusing on the investment climate and state of democracy. Using a dynamic system generalized method of moments estimator, we examine twenty-one countries for the period 1994-2008. We find that when human capital is controlled for, the host country investment profile has a positive effect on agricultural FDI and the host country state of democracy positively affects agricultural and manufacturing FDI. In addition, services FDI is attracted by educated labor, whereas FDI to other sectors is attracted by cheap labor. Moreover, natural resource endowments have a positive impact on FDI in the sectors of agriculture and manufacturing.

Nutrient intake: A cross-national analysis of trends and economic correlates

Nutrition is a key input in the health production function, and a better understanding of how we eat can aid in guiding effective policy change towards better population health. This study documents prevalence rates, trends in, and potential correlates of nutrient intake for panels of countries, categorized by geographical regions and levels of development. We assemble data from 209 countries, spanning 51 years (1961-2011), based on original data compilations using 960 country-years for BMI, 370 country-years for glucose, and 321 country-years for cholesterol. Our estimates inform the nature and scope of nutrient intake on a global scale, and contribute towards an understanding of the drivers of the general upward trend in food intake and obesity. The cross-national trends, across countries spanning the spectrum of economic development and geographic regions, suggest that simply analyzing aggregate caloric intake masks the heterogeneity in trends for the various food groups. Food groups analyzed include cereals, sugars and sweeteners, vegetable oils, meat, starch, milk, fruits, animal fats, alcoholic beverages, oil crops, pulses, vegetables, fish, and eggs. Fixed effects regression analyses reveal that caloric intake is strongly associated with hunger depth, body mass index, cholesterol levels, and glucose levels. Moreover, changes in real GDP per capita, labor force participation, and health care inputs in a nation can partly explain the increase in caloric intake. We note that substantial heterogeneity remains.

The Impact of FDI on Child Labor: Insights from an Empirical Analysis of Sectoral FDI Data and Case Studies

Not all foreign direct investment (FDI) is alike as far as its impact on various dimensions of human development is concerned. This paper focuses, in particular, on child labor and it undertakes a cross-country empirical analysis of this issue, using data on 100 countries spanning the period 1990–2009. Unlike earlier studies that focus mostly on total FDI, we also utilize data on disaggregated FDI, covering the main economic sectors of interest such as agriculture, mining, manufacturing, services, and finance. The empirical results suggest that different economic sectors generate varied effects on child labor. For instance, FDI in agriculture in Europe and Central Asia tends to exacerbate child labor, whereas FDI in manufacturing in South and East Asia and FDI in mining in Latin America appear negatively linked to child labor. Furthermore, signing on to the UN Convention on the Rights of the Child (CRC) is positively associated with child labor. One possible explanation for the latter result is that stronger anti-child labor laws could lead to multiple equilibria in labor markets, including the possibility of increasing child labor in certain sectors. Selected case studies help clarify the possible reasons behind this varied FDI impact on child labor, emphasizing among other factors supply chain management and the critical importance of policy implementation and coordination with the private sector.

Employment effects of mergers and acquisitions in the United States by sector

This article studies the employment effects of mergers and acquisitions in the manufacturing, financial and service sectors of the US economy using annual time series data from 1978 to 2008. An empirical model is developed in which average wages per hour and the total value of mergers and acquisitions are the explanatory variables, with the number of people employed as the dependent variable. Before estimating the model, the time series properties of the data are diagnosed. The estimated results suggest that mergers and acquisitions have helped to increase employment in both the short-run as well as in the long-run in all three sectors of the economy. To ensure the robustness of the finding, a panel data set is created and the model is re-estimated using the fixed effects estimator. The finding is consistent with the sectoral results.

EU accession and foreign-owned firms in Bulgaria

ABSTRACT Bulgaria signed the European Union accession treaty in 2005. Accession caused an increase in the volume of inward foreign direct investment flows (IFDI). We analyse World Bank BEEPS firm-level data for 2007 to understand the characteristics and performance of foreign firms in Bulgaria. Regression analysis reveals that foreign firms are larger, have lower capital-to-labour ratios, are more likely to export and are more likely to locate in Sofia. However, foreign firms have had limited success in Bulgaria. They do not exhibit higher sales growth and, in manufacturing, carried out lower capital investment in machinery than domestic firms. The numbers of visits from tax officials is the same for domestic and foreign firms in manufacturing, and lower for foreign firms in the service sector. However, firms with higher exports-to-sales ratios and higher absolute sales were subjected to a higher number of visits from tax officials. These findings suggest that a range of institutional challenges remain for foreign firms in Bulgaria.

Public Spending During Growth Accelerations and Decelerations: Exploring the Interaction of the Business Cycle and Control of Corruption

The present paper analyzes the cyclicality of public spending on key social, economic and military sectors, including agriculture, education, health, social protection, transportation and military spending using data available for up to 40 developing countries spanning the period from 1980 to 2004. It utilizes measures of governance as well as indicators for growth acceleration and deceleration episodes to try and tease out possible spending patterns juxtaposed against these conditions. This paper finds evidence that total public spending is largely procyclical during growth decelerations and it is acyclical during growth accelerations. Better governance indicators are also associated with a tempering of this procyclicality of total public spending. In addition, even as total public spending may be procyclical, its subcomponent parts need not be. Finally, military spending tends to be acyclical, suggesting that it neither gets cut nor surges systematically during growth accelerations or decelerations.