Gender Inequality and Foreign Direct Investment:  Empirical Evidence from Asian Countries

Sujan Chandra Paul; Israt Jahan Rupa; Mallika Saha; Md. Abir Hossain

Gender Inequality and Foreign Direct Investment: Empirical Evidence from Asian Countries

Sujan Chandra Paul, Israt Jahan Rupa, Mallika Saha, Md. Abir Hossain

Abstract

In Asian countries, the relationship between gender inequality and foreign direct investment (FDI) is a sensitive topic. Due to labor market limits and the advantageous effect of women's empowerment, gender inequality is thought to have a detrimental impact on economic development and FDI. This study aims to look into the influence of gender disparity on FDI inflows to Asian countries. Our data includes 43 Asian nations and spans the years 1990 to 2018. We discover that reduced tertiary-level education and health gaps play a decisive role in FDI inflow into Asian countries using the Generalized Method of Moments (GMM). The findings are crucial to devising policies to minimize the gap in gender equality and promote FDI.

JEL Classification: J01, J10

How to Cite:
Paul, S. C., Rupa, I. J., Saha, M., Hossain, M. A., & Sulltana, N. (2023). Gender Equality and Foreign Direct Investment: Empirical Evidence from Asian Countries. Etikonomi, 22(2), 321 – 332. https://doi.org/10.15408/etk.v22i2.27099.

Keywords

gender inequality; foreign direct investment; education gap; health gap; generalized method of moment

References

Aguayo‐Tellez, E. (2012). The Impact of Trade Liberalization Policies and FDI on Gender Inequalities: A Literature Review. World Development Report, 2012.

Akalpler, E., & Adil, H. (2017). The Impact of Foreign Direct Investment on Economic Growth in Singapore between 1980 and 2014. Eurasian Economic Review, 7, 435-450.

Anyanwu, J. C. (2016). Analysis of Gender Equality in Youth Employment in Africa. African Development Review, 28(4), 397-415.

Baliamoune-Lutz, M. (2007). Globalisation and Gender Inequality: Is Africa Different?. Journal of African Economies, 16(2), 301-348. https://doi.org/10.1093/jae/ejl037.

Bezuidenhout, C., Van Rensburg, C. J., Matthee, M., & Stolzenburg, V. (2019). Trading Firms and the Gender Wage Gap: Evidence from South Africa. Agenda, 33(4), 79-90.

Ben Saâd, M., & Assoumou-Ella, G. (2019). Economic Complexity and Gender Inequality in Education: an Empirical Study. Economics Bulletin, 39(1), 321-334.

Berik, G., Rodgers, Y., & Seguino, S. (2009). Feminist Economics of Inequality, Development, and Growth. Feminist Economics, 15(3), 1–33.

Berik, G. (2011). Gender Aspects of Trade. In. Jansen, M., Peters, R., & Xirinachs, J. M. S (Eds). Trade and Employment: From Myths to Facts. Geneva: International Labour Organization.

Blanton, R. G., & Blanton, S. L. (2015). Is Foreign Direct Investment “Gender Blind”? Women's Rights as a Determinant of US FDI. Feminist Economics, 21(4), 61-88. https://doi.org/10.1080/13545701.2015.1006651.

Blundell, R., & Bond, S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87(1),115–143.

Brzozowski, M. (2013). Gender Equality as The Determinant of FDI Flows to Central European Countries. Ekonomia.Rynek, Gospodarka, Społeczeństwo, 33, 101-125.

Busse, M., & Nunnenkamp, P. (2009). Gender Disparity in Education and the International Competition for Foreign Direct Investment. Feminist Economics, 15(3), 61-90.

Busse, M., & Spielmann, C. (2006). Gender Inequality and Trade. Review of International Economics, 14(3), 362–379.

Bui, T. M. H., Vo, X. V., & Bui, D. T. (2018). Gender Inequality and FDI: Empirical Evidence from Developing Asia–Pacific Countries. Eurasian Economic Review, 8(3), 393-416.

Bogliaccini, J. A., & Egan, P. J. (2017). Foreign Direct Investment and Inequality in Developing Countries: Does Sector Matter?. Economics & Politics, 29(3), 209-236.

Chaudhuri, S., & Mukhopadhyay, U. (2014). Foreign Direct Investment in Developing Countries. A Theoretical Evaluation. Berlin: Springer.

Cheng, L. K., & Kwan, Y. K. (2000). What are The Determinants of The Location of Foreign Direct Investment? The Chinese Experience. Journal of International Economics, 51(2), 379–400. https://doi.org/10.1016/S0022-1996(99)00032-X.

Chen, Z., Ge, Y., Lai, H., & Wan, C. (2013). Globalization and Gender Wage Inequality in China. World Development, 44, 256-266.

Choi, J., & Greaney, T. M. (2022). Global Influences on Gender Inequality: Evidence from Female Employment in Korea. International Economic Review, 63(1), 291-328.

Coleman, I. (2010). The Global Glass Ceiling. Foreign Affairs, 89(3), 13–20.

Chakrabarti, A. (2001). The Determinants of Foreign Direct Investments: Sensitivity Analyses of Cross‐Country Regressions. Kyklos, 54(1), 89-114.

Demirhan, E., & Masca, M. (2016). Determinants of Foreign Direct Investment Flows to Developing Countries: a Cross-Sectional Analysis. Prague Economic Paper, 2008(4), 356-369.

Faeth, I. (2009). Determinants of Foreign Direct Investment –a Tale of Nine Theoretical Models. Journal of Economic Surveys, 23(1), 165-196.

Farooq, F., Chaudhry, I. S., Khalid, S., & Tariq, M. (2019). How Do Trade Liberalization and Gender Inequality Affect Economic Development?. Pakistan Journal of Commerce and Social Sciences (PJCSS), 13(2), 547-559.

Grimm, M. (2011). Does Inequality in Health Impede Economic Growth? Oxford Economic Papers, 63(3), 448–474.

Girmay, A. (2018). FDI and Gender Equality: TNC Responsibilities to Address Gender Vulnerabilities in Developing Countries. Working Paper, The Wharton School, University of Pennsylvania.

Jordaan, J. C. (2004). Foreign Direct Investment and Neighbouring Influences. (Unpublished Doctoral Dissertation). University of Pretoria.

Jamielaa, M. (2018). Trade Openness and Female-Male Earnings Differentials: Evidence from Indonesia. Economic Journal of Emerging Markets, 10(1), 82-92.

Kinoshita, Y., & Campos, N. F. (2003). Why Does FDI Go Where It Goes? New Evidence from The Transition Economies. William Davidson Institute Working Paper No. 573.

Klasen, S., & Lamanna, F. (2009). The Impact of Gender Inequality in Education and Employment on Economic Growth: New Evidence for a Panel of Countries. Feminist economics, 15(3), 91-132.

Klasen, S. (2002). Low Schooling for Girls, Slower Growth for All? Cross Country Evidence on the Effect of Gender Inequality in Education on Economic Development. World Bank Economic Review, 16(3), 345–73.

McLaren, J., & Yoo, M. (2017). FDI and Inequality in Vietnam: An Approach with Census Data. Journal of Asian Economics, 48, 134-147.

Pantelopoulos, G. (2022). Higher Education, Gender, and Foreign Direct Investment: Evidence from OECD Countries. Industry and Higher Education, 36(1), 86-93.

Resmini, L., & Casi, L. (2010). The Determinants of Foreign Direct Investments: Regional vs. National Characteristics. Proceeding of the 50th Congress of the European Regional Science Association.

Stolzenburg, V., Matthee, M., Janse van Rensburg, C., &Bezuidenhout, C. (2021). Foreign Direct Investment and Gender Inequality: Evidence from South Africa. Transnational Corporations Journal, 27(3), 93-113.

Seguino, S. (2000). The Effects of Structural Change and Economic Liberalization on Gender Wage Differentials in South Korea and Taiwan. Cambridge Journal of Economics, 24(4), 437–459.

Seguino, S., Berik, G., & Rodgers, Y. (2009). Promoting Gender Equality as a Means to Finance Development. Friedrich Ebert Stiftung Occasional Paper Series.

Vahter, P., & Masso, J. (2019). The Contribution of Multinationals to Wage Inequality: Foreign Ownership and the Gender Pay Gap. Review of World Economics, 155, 105-148. https://doi.org/10.1007/s10290-018-0336-2.

Xu, C., Han, M., Dossou, T. A. M., & Bekun, F. V. (2021). Trade Openness, FDI, and Income Inequality: Evidence from Sub‐Saharan Africa. African Development Review, 33(1), 193-203.

Full Text: PDF

DOI: 10.15408/etk.v22i2.27099