literature review

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I have to do literature review,

I have all the articles , I reed it, summaries it. just I need to put all this in literature review format.

you will not do new work, I have it just I need help in put in good format.

if you have idea how to do it , please let me know to work on it.

I will attach my work which needs edit,

I will attach a good example for literature review in different topic.

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EMPIRICAL LITERATURE REVIEW Overview of the poverty in world DEFINITIONS AND MEASUREMENT OF POVERTY: CAUSES OF POVERTY: WAYS OUT OF POVERTY: Arguments + Arguments - International trade AND POVERTY REDUCTION: CHAPTER 2: LITERATURE REVIEW Generally speaking, more studies are being conducted concerning developing countries to ensure that they have the tools and knowledge necessary to make the most proficient use of FDI that is, focusing efforts on increasing economic development and growth. In this chapter, there is a brief consideration of some empirical studies regarding FDI. The hope therein is to understand better how China was able to best capitalize on these new funds for faster economic growth. EMPIRICAL LITERATURE REVIEW: Paraphrasing from a definition set by Branstetter and Fritz (514-515), FDI refers to an investment by a foreign entity (governmental or business in nature) within a country to establish a presence for profit or diplomacy. In this respect, FDI has the power to both allow China to grow by foreign example as well as influence the development efforts of other countries, over time (Williams, 2016). Most of the previous studies reviewed for this thesis focused primarily on the positive side of FDI in economic growth. Given this leaning, I wanted my review to exhibit greater balance betwixt the positive and negative effects of FDI on an economy. Once this accomplishment, I could devise an empirical methodology and analysis that could have real implications for entities interested in FDI. It is also in this chapter where the discussion of the prevailing theories and the purported relationships between FDI and growth takes place. Overview of the Development of FDI in China: Until 1978, China was an isolated economy that never emphasized multinational business operation, or, frankly, any permanent negotiations outside its local markets. Of course, China, as a self-proclaimed “communist” nation, is still rather isolated and antiquated in much of its thinking as a political body (Williams, 2006). However, after 1978, with the introduction of the now famous “open-door” strategies of Deng Xiaoping, the Chinese government began to make changes in some of its policies regarding isolationism; and, it was the impact of these policies that initiated both a new era of a more liberated Chinese economy and the subsequent lessening of Chinese underdevelopment (Ebrey, 2010). As one strand to these new policies, the Chinese government provided incentives to encourage foreign markets to consider China as a destination for FDI dollars (so to speak). According to China’s Ministry of Commerce, back in 2011, it was precisely the inclusion of overseas markets that made China’s exports and imports rise by more than half to record $262 billion in the year 2007 (Dehghani et al., 2016). For better management of the tremendous inflows, the Chinese leaders decided to permit the introduction of capitalist elements into its economy. From this, China leaders were able to free some efforts from micromanaging the economy and redirect those efforts into maintaining political stability across the country. As per the OECD (2000), as well as Ren and Pentecost (2007), the distribution of China’s open-door strategies was across three periods to accomplish their primary objective, financial stability for the country. In the first, time frame, 1978-1983, regulations on joint ventures sought to pull in investors from different nations and teach them all that China had to offer as human capital and resource-rich country. Additionally, amidst that period, particularly in 1980, the country's political-economic administration set-up four special economic zones (SEZs). The consequences of this approach were quite positive, and they were grounded in the idea that freeing FDI inflows would permit greater dissemination of technologies and know-how into China. At this time, there was FDI restriction to just these four areas (SEZs) but, the administration’s plan was a start in creating a more internationally competitive China. From this initial experimentation with the first, four SEZs (namely, Shenzhen, the city of Zhuhai, Shantou in Guangdong and Xiamen in the Fujian region), the observed successes established a positive precedent and causation between the freeing of FDI and economic growth. The establishment of causation in the positive ramifications of the program occurred when it was definitive that only those SEZs were shown to grow disproportionately to the other regions of the economy. Of course, upon further examination, it is, perhaps, no surprise that freed FDI in those highly trade-sensitive coastal regions would lead to growth. After all, the Shenzhen region is near the British-enhanced city-state of Hong Kong, and the other FDI-freed areas of Zhuhai and Xiamen are close to the democratic and US-backed Taiwan and the historically affluent Macao, respectively. Moreover, these urban areas are situated in regions of cultural and linguistic homogeneity, which has shown to improve economic efficiency. However, despite these geoeconomic circumstances, the reality remained that these regions were still highly underutilized until FDI was, firstly, permitted to enter those regions and, secondly, freed from the direct oversight of China’s government. The move ultimately established success for the program. The following reform period commenced in 1984 and ended in 1991. In 1986, entirely foreign-owned companies were formally recognized as licensed operators within the Chinese market only in the determined SEZs. Additionally, organizations with progressive technologies enjoyed special incentives to penetrate the Chinese market. At around the same time, new legal measures were instituted to provide some oversights and investor insurance programs (particularly special interest safeguards). These new programs continued to bring growth to the regions mentioned above, which then spurred new interests to develop more zones. It was then, at the early 1990s, that the foundation of Free Trade Areas and High Technology Development Zones took place. Ultimately, to accommodate the growing socio-economic status of the Chinese workers and households of those regions, many of those zones opened to international organizations that operated in retail as well as wholesale markets, banking industries, insurance, and consultancy administrations. It bolstered an economically virtuous cycle of spending and production, which reinforced the FDI programs. Peak Stage (1992 – 1993) during this stage, Shanghai rose into an economic center of China and also opening of Pudong New area occurred since the Chinese government resolved to develop Shanghai into a an international hub for finance, economy and trade. The rise of Shanghai become as a luck since the government opted to test its newly found policies from this place and also varied successful policies were applied from this place and the rest of the world. Southern China had been captured by FDI leaving out the Southeastern part, therefore, the government opted to shift the FDI to Shanghai so that its concentration should not only be witnessed in one region but it should occupy the other parts. During this period, income generating entities such as high-tech enterprises, established manufactures, and the financial companies were advised to conduct their operations at Pudong where the central and local government could offer them different preferred treatments (Zhang, 2002). Through implementation of new framework, the Chinese government encouraged the exports-oriented and Foreign Invested Enterprises with help of the advanced economy. Through this, the new sectors opened for foreign investors were wholesaling and retailing, accounting and information consultancy, banking and insurance. The government procedures were made simple in terms of FDI, there was a need to direct FDI into the country’s inner regions which were less developed and less industrialized. Remarkable growth in FDI was witnessed in 1992 and the government announced its intention of adopting the socialist market economy strategy. Between 1992 and 1993,the laws and regulations attached to the market operations was passed which include’ adoption of trade union law, the company law, and Provision regulations of value-added tax, consumption tax, business tax and enterprise income tax. Adjustment Stage (1994 – 2000) a new stage in economic reforms was seen in 1994, this is because the growth rate which use to be very high in two previous years slowed down to stable level, therefore, in order to realize the economic development goal by the government, guiding of the FDI became a priority (Yuan, 2006). The guiding directory categorized FDI into the following categories; encouraged, restricted, prohibited and permitted, in the first category we had projects min infrastructure or underdeveloped agriculture with the advanced technology, the second category involved those whose production exceeded domestic demand and those who engaged in the exploration of rare and valuable resources were treated as restricted. In the third category we had projects that tend to interfere with the national security or the public interest the other remaining projects felt under permitted. Post-WTO Stage (2001 – present) after a long-term negation, which lasted for 15 years, China officially, got the chance to be a member of the World Trade Organization (WTO) on November 11th 2011. Since then, China adopted a way of making true its objective, which were basic principles of non-discrimination, pro-trade, and pro-competition. This action made China to realize an impact on the FDI, an access to the WTO made China’s export market become larger and more predictable (Zebregs, 2001). China’s domestic market attracts FDI in industries where there is large market potential this enables China’s export to get protection from competitors. Becoming a WTO member grants China the chance to further its economic reforms and streamline its legal framework. This, in importance, improves China’s business environment and assist in attracting more foreign investment. The Purpose of Attracting FDI: The primary goal of attracting FDI is to increase the productivity of an economy, either in pertinent areas or as a whole. It is a valid goal since FDI inflow is diverse as it targets different sectors of the economy; talk of insurance or banking, thereby enhancing volumes as every industry is in a position to produce quality. Technology is another reason to attract FDI; the entities come with advanced machines for efficiency, and these, in the end, would help trigger the quality and quantity of productions within the domestic economy. Its significance follows by ensuring a competitive market environment in the host country where local firms would ensure quality in their output, and in the end customers would enjoy the very best at affordable prices. Through technological investment as well as various fresh inflows from different economies, FDI is significant in capital formation to the host country (Dehghani et al., 2016). When a country is experiencing low human capital concerning managerial skills, FDI inflow becomes the best solution. Such enterprises would bring the best to manage their investment and in the domestic economy would learn via experience and training. In consideration to the employment opportunities that the FDIs bring along, they help in solving the unemployment dilemma, which by a more significant margin counteracts the poverty level hence resulting in improved living standards. In conclusion, based on the above, FDI enhances economic growth and development of every economy and that defines the primary purpose of its acceptance. The GDP levels shall change while infrastructure, living standards and income per head improve as poverty level declines in the recipient country. Different Forms of FDI in China’s Economy: The research describes various kinds of FDI in China’s economy. The primary two forms of FDI discussed are the export and domestic-oriented types. The study also describes other types of FDI such as Joint Exploration, Wholly Foreign-Owned Enterprises, Contractual Joint Ventures and Equity Joint Ventures (Fung 2002, OECD 2000 and Ali & Guo 2005). • Contractual Joint Ventures (CJVs): This group entails investments by the cooperation of Chinese and foreign enterprises. • Equity Joint Ventures (EJVs): This category includes joint enterprises by foreign and Chinese companies. Apart from sharing the losses and profits, the risk is lower. This type of FDI took place with absolute success in the 90s. • Joint Exploration: The category entailed market exploration, and it was carried out in the early phases of the Chinese’s adoption of FDI programs. • Wholly Foreign-Owned Enterprises (WFOs): It is the kind of FDI where foreign investors establish affiliates. WFOs showed a significant upward trend since 1986 in China. In general, EJVs performed well in the early phase of the reform. However, WFOs has flourished since in the middle of the 80s. The Impact of FDI in China’s Economy graphs: It is a necessity to examine and comment on the underlying trends concerning a country’s GDP, FDI, and exports. Embracing open-door policies in 1978, the gross domestic product of China began to achieve extraordinary growth and development. Statistical evidence provided by the world bank shows that the country’s GDP rose steeply to about $6.101 trillion in 2010 from 205.09$ billion in the year 1982. GDP upto 2010 7000 GDP IN billions 6000 5000 4000 3000 2000 1000 0 1980 1985 1990 1995 2000 2005 2010 2015 year Moreover, the information from fig 2.6.2 illustrates a rising trend of Foreign Direct Investments. In the 1980s, the country’s FDI remained at an expressively low level at approximately $1,070 million. In the midst of 1980s, FDI sustained a remarkable growth and attained about $6,060 million because of tax incentives as well as many benefits that the Chinese government allotted for foreign investments. Among most of the developing nations, China has been in the in the forefront regarding FDI, as explained by Ren and Pentecost (1991). Fig 2.6.2: Foreign Direct Investments inflows in China measured in United States dollars at the current price and existing exchange rates in millions. (1978-2010) Source: United Nations, Unctad Figure 2.6.3 exhibits the standing of exports in 2010. The information is available on the official World Bank site. China is leading in exportation across the world with an approximated amount of $516.493 billion, followed by Germany which has $141.044 billion. Then France, Japan, and the U.S follow with their exports in 2010 reaching $ 93.548, 116.658 and 132.789 billion, respectively. In 2004, China was in the third place after the USA and Germany. Therefore, the progress of the country in the six years that followed has been immense and encouraging for China’s export sectors. Figure 3: Exports of products and services in 2010(in billion US dollars). China: 1, Germany: 2, USA: 3, Japan: 4, France: 5 Source: World Bank Indicator. Reviews on FDI, Exports and Economic Growth: The relationship between FDI, Exports and the Economic growth has been a fundamental issue for economists and researchers who tend to study in the field on international economics. FDI occurs when an investor from a home country acquires an asset in another country with an intention of managing that asset, on the other hand, economic growth is the increase in a country’s real output per capita, and export as well is the recorded surplus by the host country sold to other countries. (Gay, 2016). According to ‘Brussels Declaration and Programmed of Action for the LDCs’ (BPoA), FDI inflows is basic in supporting economic growth and development in LDCs, also, the foreign demand for exports is essential for economic growth than the domestic demand. Graham and Wada (2001) also supported the notion that FDI depicts a significant correlation to the Chinese economic growth. Their findings showed that China’s exports had increased dramatically due to investments by multinationals enterprises. Additionally, wages and income per capita also went up in provinces where FDI was freed and encouraged (Whalley, Xin, & Lardy 2007, January). The same trend is also supported by Chen, Chang, and Zhang (1995) who argue that FDI has shown a positive correlation with the augmentation of total fixed asset investments in China. Reviews on the Productivity Gains and Spillover Effects of FDI: Several kinds of literature emphasized the importance of FDI’s spillover impacts on the Chinese economy; and given this, it becomes necessary to point out at least a few. First, Cheung and Ping (2004) established that FDI has positive and significant impacts on native patent applications in China. According to Buckley, Clegg, and Wang (2003), FDI has both negative and positive effects on the productivity of Chinese firms. Moreover, the authors use 41 sub-sectors of China’s electronics companies between the years 1996 and 2001 to illustrate that the benefits from spillover effects to Chinese industries diminish over time. As such, China’s domestic productivity has a life cycle. Wang and Lo (2007) assessed the correlation of FDI with China’s domestic industry productivity at the provincial level. The results prove that even though FDI improves economic development by increasing allocative efficiency in the short and medium-run, it also has negative impacts that can worsen the ability of productivity, over time. In conclusion, he argues that FDI has more negative than positive consequences. Given the fact that related types of research are limited, it is imperative also to review Hu and Jefferson’s study on FDI Impact and Spillover (2001). Hu and Jefferson have data on both large and medium-sized Chinese enterprises with which to test the impact of FDI and its spillover in manufacturing firms in China between 1995 and 1999. The authors ultimately illustrated that FDI Inflows have a more positive effect on China’s economy since they introduce advanced products in the marketplace that would have otherwise never existed within the borders. Hale and Long (2007) also conducted similar studies on FDI Impact and Spillover. In spite the evidence that they applied a great number of disclaimers to test the influence of FDI spillovers on the output of local firms in China (firm-level data), they established varied results with many optimistic conclusions. It was mostly the case because of aggregation bias and a failure to control the FDI types. In citing another example, in the work of Nicole Madariaga and Poncet (2007), their dataset consisted 180 Chinese cities over the period 1990-2002. Their study concluded that Chinese cities not only benefited from the influxes but also from FDI received by their immediate locations. Reviews on Different Regions: FDI and GDP growth have a positive correlation in most provinces in China. According to Gen and Cheng (2000), FDI also stimulates less growth in the GDP within the western areas than in the coastal regions. Economic growth and FDI in the eastern sector have an increasing and an apparent, positive correlation, as noted by Hou- Kai (2002). Studies conducted by Hull et al., (2006, October) point out that the income growth of China is significantly affected by FDI inflows. China’s income growth is, therefore, positively associated with FDI. He also reinforces the notion mentioned above that the income growth is smaller in inland than in coastal provinces, over time. Regional disparities in China have been argued to correlate with FDI and exports in each region, Fu and Balasubramanyam, (2003). Fu discovered that migration effects and spillover of the commodities and FDI markets affect the income in ...
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