A Dynamic Investigation of Foreign Direct Investment and Poverty Reduction in Mauritius

Autor:	Raja Vinesh Sannassee, Boopen Seetanah, Sheereen Fauzel
Rok vydání:	2016
Předmět:	Government spending Macroeconomics Short run Poverty 050204 development studies media_common.quotation_subject 05 social sciences Monetary economics Foreign direct investment Debt 0502 economics and business Openness to experience Economics Endogeneity 050207 economics Welfare media_common
Zdroj:	Theoretical Economics Letters. :289-303
ISSN:	2162-2086 2162-2078 1980-2013
Popis:	The focus of this study is to investigate the extent to which FDI flowing in Mauritius reduces poverty or increases welfare by using time series data for the period 1980-2013. This study methodologically departs from the existing ones as it uses a dynamic vector autoregressive model that ensures the dynamic behaviour of the time series under consideration is properly captured, while simultaneously catering for endogeneity and causality issues. Any feedback and indirect effects which might be present will also be detected within the VAR/VECM framework. The results show that indeed FDI has contributed to poverty reduction; albeit the magnitude of the coefficient is relatively smaller in the short run as compared to the long run. Also a uni-directional causality is observed between FDI and poverty reduction. Furthermore, the results confirm the fact that FDI reduces poverty through the employment channel. Other important factors contributing to a reduction in poverty according to this study is an increase in government spending as well as trade openness. Whereas, higher debt is observed to increase the level of poverty.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::7531860fc825201fd829176aae082172 https://doi.org/10.4236/tel.2016.62033 Zobrazit plný text záznamu