Articles
The growth, inequality and poverty triangle in South Africa: A provincial analysis
DOI: https://doi.org/10.24052/IJBED/V013N01/ART-01
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Purpose of research: Poverty, widening income inequality and economic growth are crucial challenges in sustainable development. A significant fraction of the world's poorest population still struggles to achieve a minimal standard of living throughout emerging nations, particularly in Africa, despite decades of tremendous progress in reducing poverty and improving prosperity. Developing countries tend to have inconsistent progress in eliminating extreme poverty due to reasons specific to geographic and national identity. The study explored the growth, inequality, and poverty triangle. Thus, the objective of the study was to explore the impact of economic growth and income inequality on poverty by looking at the nine South African provinces, over the periods of 1995 to 2022.
Design/methodology: The study adopted the panel data methodologies of the pooled mean group, feasible generalized least squares, and panel-corrected standard error technique.
Results/findings: Empirical results obtained from the study revealed that as the economy positively progresses in the long run there is an increase in the human development index unlike the short run, implying a decline in poverty levels. Income inequality was found to positively affect the human development index in both short- and long-term. This shows that as income inequality intensifies, the poverty levels among the nine provinces in South Africa will continue to increase thus leading to a deterioration in the standard of living.
Practical implications and Conclusions: The outcome of the study suggests that economic growth must be stimulated and inclusive. Effective redistributive policies are required to ameliorate income inequality.
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The role of state competitiveness and perceived insecurity in attracting foreign direct investment in Mexico
DOI: https://doi.org/10.24052/IJBED/V013N01/ART-02
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State competitiveness is a key factor influencing a country's capacity to attract foreign direct investment (FDI), as it reflects the efficiency of institutions, infrastructure, macroeconomic stability, and innovation capacity, among others. In Mexico, the Mexican Institute for Competitiveness (IMCO) is responsible for measuring and analyzing state competitiveness through its State Competitiveness Index, which evaluates factors such as economic stability, governance, innovation, and security conditions.This study explores how state competitiveness and perceived insecurity impact the attraction of Foreign Direct Investment (FDI) across Mexican states, using a comprehensive model that incorporates key variables such as state competitiveness, perception of insecurity, political party in power, and GDP. Based on data from 2019 to 2023, the analysis reveals that the State Competitiveness Index is the most significant predictor of FDI, exhibiting a positive relationship with new investments. This indicates that higher state competitiveness tends to attract more foreign investments. Additionally, the Perception of Insecurity Index demonstrates a significant, albeit smaller, effect on FDI, suggesting that increased insecurity perception can still influence investment flows, though to a lesser extent. These findings underscore the complex dynamics between security perceptions, competitiveness, and foreign investment, providing valuable insights for policymakers aiming to enhance investment attraction strategies.
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