IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v12y2024i11p314-d1523882.html
   My bibliography  Save this article

Assessing the Foreign Direct Investment Performance of Middle-Income Countries Using Data Envelopment Analysis with Translation Invariance

Author

Listed:
  • Runyu Yang

    (College of Professional Studies, Northeastern University, 360 Huntington Ave, Boston, MA 02115, USA)

  • Youngbok Ryu

    (College of Professional Studies, Northeastern University, 360 Huntington Ave, Boston, MA 02115, USA)

  • Mikhail V. Oet

    (College of Professional Studies, Northeastern University, 360 Huntington Ave, Boston, MA 02115, USA)

Abstract

Foreign direct investment (FDI) is a primary vehicle for manufacturing transfer. Middle-income countries can benefit by effectively utilizing FDI to achieve technological development and economic equality and possibly address the middle-income trap issue. This study assessed the FDI performance of ten middle-income countries and examined the statistical relationships between their performance and their contexts: technological development, economic equality, and during the COVID-19 pandemic. For the former, we employed non-radial data envelopment analysis, taking advantage of its translation invariance property to derive efficiency scores; for the latter, we conducted a series of Kruskal–Wallis tests to examine the statistical relationships. According to the analysis results, we found that (a) most countries, except China and India, showed stable efficiency scores over time, (b) their efficiency scores were statistically significantly associated with the level of technological development (indicated by their technology lifecycle-based sigmoid curves) and economic equality (represented by Gini index and poverty indicator); and (c) their efficiency scores were not associated with the COVID-19 pandemic. The results imply that to improve their foreign direct investment performance, host countries may need to enhance their absorptive capacity in both the technological and economic domains.

Suggested Citation

  • Runyu Yang & Youngbok Ryu & Mikhail V. Oet, 2024. "Assessing the Foreign Direct Investment Performance of Middle-Income Countries Using Data Envelopment Analysis with Translation Invariance," Economies, MDPI, vol. 12(11), pages 1-27, November.
  • Handle: RePEc:gam:jecomi:v:12:y:2024:i:11:p:314-:d:1523882
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/12/11/314/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2227-7099/12/11/314/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:12:y:2024:i:11:p:314-:d:1523882. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.