Selin Sayek

FDI, Productivity and Financial Development

This paper examines the effect of foreign direct investment (FDI) on growth Factor accumulation - physical and human capital - does not seem to be the main channel through which countries benefit f rom FDI. Instead, we f ind that countries with well-developed financial markets gain significantly

Foreign direct investment in Turkey: regional determinants

The uneven regional distribution of foreign direct investment (FDI) in Turkey poses an interesting question from the perspective of multinational firms (MNFs) and policy-makers alike. This paper focuses on the factors governing the location decisions of MNFs within Turkey with specific reference to policy implications. Using a conditional logit model, it is found that agglomeration, depth of local financial markets, human capital, and coastal access dominate location decisions for the aggregate sample of foreign investors in Turkey. This study reveals no evidence that public investment is successful in attracting MNFs to particular regions. Also importantly, the location determinants vary dramatically by broad industrial category, investment composition, and origin-country characteristics, including income category and region.

Outsourcing and Wage Inequality in a Dynamic Product Cycle Model

This paper constructs a dynamic North-South trade model with outsourcing and endogenous innovation. Production of high quality goods is first performed in the North (Northern phase), then split between the North and the South (Outsourcing phase), and finally shifted to the South (Southern phase). This cycle is reignited whenever a Northern firm innovates a higher quality product. We find that an increase in the fraction of outsourced production raises the Northern skill premium unambiguously, while raising the Southern skill premium if and only if the skill intensity of outsourced production is higher than that of local Southern production. Copyright

A Review of Software Packages for Data Mining

We present to the statistical community an overview of five data mining packages with the intent of leaving the reader with a sense of the different capabilities, the ease or difficulty of use, and the user interface of each package. We are not attempting to perform a controlled comparison of the algorithms in each package to decide which has the strongest predictive power, but instead hope to give an idea of the approach to predictive modeling used in each of them. The packages are compared in the areas of descriptive statistics and graphics, predictive models, and association (market basket) analysis. As expected, the packages affiliated with the most popular statistical software packages (SAS and SPSS) provide the broadest range of features with remarkably similar modeling and interface approaches, whereas the other packages all have their special sets of features and specific target audiences whom we believe each of the packages will serve well. It is essential that an organization considering the purchase of a data mining package carefully evaluate the available options and choose the one that provides the best fit with its particular needs.

FDI Spillovers, Financial Markets, and Economic Development

This paper examines the role financial markets play in the relationship between foreign direct investment (FDI) and economic development. We model an economy with a continuum of agents indexed by their level of ability. Agents can either work for the foreign company or undertake entrepreneurial activities, which are subject to a fixed cost. Better financial markets allow agents to take advantage of knowledge spillovers from FDI, magnifying the output effects of FDI. Empirically, we show that well-developed financial markets allow significant gains from FDI, while FDI alone plays an ambiguous role in contributing to development.

International Interdependence and Business Cycle Transmission between Turkey and the European Union

This study investigates the economic interdependence between Turkey and the European Union (EU). The main questions addressed are (i) Do Turkish and European business cycles move together? and (ii) Are European business cycles transmitted to Turkey? This investigation is important as Turkey seeks to become a full member of the EU. Trade flows, graphs, correlations, and a principal-components analysis are used to identify possible macroeconomic interdependence and transmissions. A structural vector autoregression (SVAR) model is estimated to determine the effects of European economic fluctuations on the Turkish economy. The SVAR includes GDP, consumer prices, money supplies, interest rates, and the exchange rate for Turkey and Germany. The investigation finds that Turkeys economy is only modestly influenced by European business cycles and is largely determined by domestic economic and political developments and various regional conflicts. The findings of this study have implications for Turkeys increasing economic integration into the EU.

Local Financial Development and the Aid-Growth Relationship

With official development assistance (ODA) set to rise as countries strive to meet the Millennium Development Goals (MDGs), aid effectiveness remains an important area of development policy. An increasing number of studies support the notion that ODA can contribute to growth in a nonlinear relationship. In this paper, we investigate a new hypothesis regarding this relationship: that deeper financial markets in aid-recipient countries facilitate the management of aid flows, thereby enhancing aid effectiveness. An empirical analysis, using a panel data set, finds robust support for the hypothesis.

Multinational Affiliates and Local Financial Markets

We use data on the sources of debt finance of U.S. majority-owned foreign affiliates in 53 countries over the period 1983 to 2001 to examine the role of financial market development, and exposure to host country-specific risk on the financing choices of these affiliates. We find that total balance sheets are about four times as large as the cross-border component of foreign direct investment (FDI). The extent of financial leverage through local debt is positively related to host-country corporate tax rates, exchange rate variability, local currency-denominated sales, and financial development. Factors that further the role of local debt reduce that of parent company debt, and through this substitution overall leverage increases.

Measuring the international digital divide: an application of Kohonen self-organising maps

With the help of a Kohonen self-organising algorithm, this paper presents a mapping and analysis of the global digital divide along with its main drivers. Several broad groups and subgroups are identified, consisting of countries that are similar in their digital development and in a number of other attributes. We find that the digital divide seems to occur synchronously with divisions in income, social, demographic and infrastructure measures. By examining a large dataset of 160 countries over a short period of three years, we find evidence of both convergence and divergence among the countries over time. We expect these findings to inform the ongoing debate on drivers of the International Digital Divide (IDD). In addition, this paper provides a novel visualisation of the digital divide and its predictors on a two-dimensional grid. Extensions of this work, with the availability of more years of data, could investigate the potential convergence of countries to particular patterns of digital development.