The Relationship Between Trade Openness and FDI Literature review

The Relationship Between Trade Openness and FDI - Literature review Example This review of literature is directed at finding the measures leading to increased foreign direct investment (FDI) for a country. Although there is a whole range of factors that cause an increase in the foreign direct investment in a country, yet one of the most significant factors has been found to be the country’s openness towards trade. Openness as a concept, has been defined in a number of ways by the researchers in the past. A comprehensive definition of openness is presented below: (t)he concept of openness, applied to trade policy, could be synonymous with the idea of neutrality. Neutrality means that incentives are neutral between saving a unit of foreign exchange through import substitution and earning a unit of foreign exchange through exports. Clearly, a highly export oriented economy may not be neutral in this sense, particularly if it shifts incentives in favor of export production through instruments such as export subsidies. It is also possible for a regime to b e neutral on average, and yet intervene in specific sectors. A good measure of trade policy would capture differences between neutral, inward oriented, and export-promoting regimes. (Harrison, 1996, p. 20). Trade openness has conventionally been scaled by different researchers in different ways, but in a vast majority of cases, trade openness has been measured by its contribution to the overall gross domestic product (GDP) of a country. Factors that have conventionally been employed for the measurement of trade openness include but are not limited to intensity of import trade, intensity of export trade, intensity of trade, intensity of adjusted trade, and the intensity of real trade (Squalli and Wilson, 2006, p. 22). Three models of adjusted trade intensity have conventionally been tried to measure the trade openness. One of them is adjusted trade intensity in which the outliers having high import for the re-rexport are handled with the modification of denominator. This measure was first proposed by Andersen (1994). The second of them is adjusted trade intensity accompanied with the alternative technique to tackle the outliers as initially proposed by Frankel (2000). The third of them is adjusted trade intensity. This is a modified form of the model originally proposed by Frankel (2000). The modification was suggested by Li et al (2004). The seven measures of openness were also cited by the famous economists Kumar and Kandzija (n.d., p. 13) in their article in which they analyzed the integration and trade theory to evaluate the perspectives of trade in Western Balkans. For the purpose of this research, intensity of trade, the three models of intensity of adjusted trade as discussed before, real trade intensity, real world trade intensity (RWTI) and composite trade intensity (CTI) will be used. They will be evaluated with a view to identifying the one that is the most accurate as a measure of openness. Of all the measures, three of the most commonly employed ar e trade intensity (TI), import trade intensity (M/GDP) and export trade intensity (X/GDP). Trade intensity is obtained by dividing the sum of import (X) and import (M) by the GDP. According to Alcala and Ciccone (2004), the estimate generated by TI upon income is affected by the non-tradable on productivity, and is thus, biased downwards. Thus, in their opinion, it is advisable to divide the nominal trade by the real GDP. The different measures of trade openness lay the basis for a technique to find out the extent to which a country is open to the global trade as well as to the consequential advantages of income growth. For instance, the higher a country’s TI, the increased openness of its economy towards the advantages

Essay --

In September of 2000, the leaders of 189 nations across the globe met at the United Nations headquarters in New York to participate in the UN Millennium summit. The leaders and members at this summit agreed to the UN Millennium declaration, which contained the eight-millennium development goals (MDGs). The purpose of these goals was to help remove poverty, improve the development, society and governance structure in these countries in order to help these countries fully develop without any lag. The deadline to achieve these goals is 2015. The eight-millennium development goals contain: Eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empower women, reduce child morality rates, improve maternal health, combat HIV/AIDs, malaria and other universal diseases, ensure environmental sustainability and to develop a global partnership for development. The republic of Maldives is an island nation off the coast of India. It consists of 26 chain islands surrounded by the Indian Ocean. For the most part, the Maldives Islands have been independent until other countries invaded. The invasion only lasted several years at a time throughout history. In 2010 the Maldives Country Report to the United Nations stated that, â€Å"it was the first country in South Asia to make the most progress, evidently achieving five of the eight goal millennium development goals† (Maldives Country Report). Eradicate Extreme Poverty and Hunger: Poverty reduction is one of the main goals the countries government focused on throughout the development process. The targets the country set to eliminate extreme poverty were to reduce the population who lived on less than $1 a day to less than 1%, achieve full and produ... ...arly in the atolls, through deeper economic diversification and corporatization/privatization of public services† (Maldives Country Report). Due the size of the country, gross domestic production (GDP) and population being very small compared to other countries, the government of Maldives is enrolled in far to many sectors. Currently, the nation is receiving $300 million in annual funding and all of this money is going in to education, healthcare, transport and harbor development. The country still has a lot more to achieve economically. The government now wants to develop new policies to improve public finance management, give an upper hand to the private sector, reach out to more tourism and vitally â€Å"deal comprehensively with the debt problem through national and international measures in order to make debt sustainable in the long term† (Maldives Country Report).

Money Is the Root of All Evil Essay

How many times have you heard that? I have heard it more times than I can count. It is a popular thing to say, but it is definitely not true and I will try to make it clear. Without getting into a theological debate about evil or its roots, I will say that â€Å"Money is the root of all evil† is a misquote of a biblical source, in Timothy 6:10. English translations vary, but they all say something along the lines of â€Å"For the love of money is a root of all kinds of evil.† Do you notice the difference? It is about the love of money, not money itself, being the root of all kinds of evil, not all evil. A few small words can make a difference. If any major religions truly pointed to money as the root of all evil, a lot of people would be trying to be as poor as possible. Money would be treated like a communicable disease. (†Please don’t pay me so much!†) Some people of faith do give away most of their income or take a vow of poverty so that they are b etter able to serve others and do good works, but most of those will describe their lifestyles as a special calling or a gift, something beyond what God requires of most believers. Even if you’re not a believer, think about the logic of saying that money is the root of evil. If money were the root of all evil, only people who had money would do evil things, and the people with the most money would be the most evil of all. Though some people without money like to think that is true, it is not. Poor people can cheat and steal, assault and kill as well as rich people and people in between. Looking at it from another angle, the lack of money also causes people to do some pretty horrible things, but so do lack of power or sex, hatred, the desire for revenge and jealousy. Money is rarely on the mind of a man who drops a drug into a woman’s drink so he can take her home practically unconscious. I’ve sometimes heard â€Å"Money is the root of all evil† used as an excuse for not saving, as if to say, â€Å"I’m a better person if I’m poor.† But intentionally spending all your money as soon as you get it does not make you a better person (unless, maybe, you’re giving it all away). It makes you irresponsible. On the other hand, making good use of your resources by saving for your future does not make you evil; it makes you more able to help others (or avoid needing the help of others) when the need arises.

The World War I ( Wwi ) - 4059 Words

At the precipice of World War I (WWI), the United States Army enlisted the help of women nurses resulting in a growth of economic opportunities for women in the nursing field. Before the war women were confined to their stereotype of a being delicate, motherly, and fragile. The war served as an opportunity for women, including nurses, to prove themselves to be more than their stereotype and be involved in the community rather than always sitting behind a man. Propaganda encouraged women to be more involved in the war and soon the concept feminism was reinvented. Female nurses, however, were still struggling to change the minds of people against women taking an active role in society or the military. Nursing had always played an important†¦show more content†¦World War I (1914-1918) was one of the most gruesome wars in American history. It consisted mostly of trench warfare, war fought from trenches, and an estimated 30 million casualty count. It was hoped that this would be the end to all wars, however the armistice signed sparked World War II. World War I began when Archduke Franz Ferdinand of Austria, and his wife were assassinated in a parade on June 28, 1914. This became the excuse for Austria-Hungary to attack Serbia. Austria- Hungary had an alliance with Germany upon declaring war on Serbia, who had an alliance with Russia. This resulted in a chain-reaction because their alliances had alliances with other nations, then they had even more alliances with other nation, so by the time Austria had officially declared war half of Europe was involved in the dispute due to their alliances with other nations, thus making it a world war. The war consisted of two opponents: the allied forces (France, Britain, and Russia) and the central powers (Germany and Austria-Hungary). It was often considered a war of attrition because for the first three years soldiers fought from their trenches. The trenches were separated by a vacant strip called no man’s land. the only