Trade openness, market size, transparency, ease of doing business, location advantagesand low levels of corruption and country risk are the main determinants that attractForeign Direct Investment into a host country. FDI inflows in México have increasedremarkably since 1994 when the North America Free Trade Agreement (NAFTA) cameinto effect. Using multiple regression analysis in order to measure the impact of FDI onGDP; the Empirical results showed that a one percent increase in FDI leads on average toan increase of 0.08 percent in GDP which clearly reflects a positive but neither animportant nor a substantial impact of FDI on economic growth in México as it would beexpected. Time series data analysis for the period 1980-2007 has been tested for UnitRoot by applying the Dickey-Fuller (DF) test. Each time series after the first differencebecomes stationary and therefore it might be a causal relationship among the variables.However, FDI will not have a real impact on the society unless there is an effective stockof Human Capital capable of learning and absorbing the know-how to work successfullywith the technology that Multinational Corporations bring into the host country with theirinvestment. The challenge for the Mexican Government is to create structural reformssuch as the deregulation of energy and oil sector for private investment that will lead toconstantly higher flows of FDI. In the medium term this will then be reflected in thesociety in terms of poverty reduction and development of its population.

Abstract The main objective of our paper is to investigate whether expansion in exports can lead to improve economic growth of Sub-Saharan African countries for the period 1970-2006. Four macro economic indicators (real GDP, Trade balance, Government expenditure and Investment) are used in our model to carry out our analysis concerning Sub Saharan African countries. Time series techniques such as unit root test (Augmented Dickey Fuller test) and co integration test (Johansen’s procedure) are used to find out whether there is a long run relationship between economic growth and trade balance. The results of the unit root test indicate that all series are stationary after first difference, with I (1). Johansen’s co integration test showed that co integration (long run relationship) exists between GDP and Trade balance, as we got significant eigenvalues and found co integration between all of the four variables which shows that they are co integrated with each other and indicates a long run relationship. Our results indicate that for the time period of 1970 to 2006, Sub Saharan African countries experienced a simultaneous increase in economic growth and trade balance as well as in investment and Govt expenditure.   Key words: exports, economic growth, unit root, co integration, Sub-Saharan Africa

This paper addresses the question if income security can enhance economic growth in developing countries? It takes its starting point in the income security problems of a developing country and summarizes evidence from published empirical research on formal income security mechanisms. We conclude that the findings on incomes security efficiency effects are ambiguous. A limited econometric study based on data from Chile is carried out with a regression showing that social securities total effect on economic growth is negative but more econometric research on total effect on growth are needed to give a definite answer.

Although there is a considerable evidence on the link between Foreign Direct Investment (FDI) and economic growth in developing countries, the causal relationship of these two variables still remains an important question. This study attempts to examine the possible causal relationship between FDI and economic growth in Turkey, during the period 1992 (Quarter 2) – 2006 (Quarter 3). We employed the Johansen Cointegration and Granger Causality tests for detecting the long run or short run causality. Our results showed that there is no long run relationship between the variables, which led us to search the causality in the short run. However we couldn’t find any evidence for a causality running from FDI to economic growth or economic growth to FDI in Turkey.

This dissertation attempts to uncover the causal relationship between alcohol abuse and both income growth and crime. These two research questions are investigated in three essays: Essay I investigates the relationship between alcohol abuse and income growth in the United States; Essay II examines the impact of alcohol abuse on income growth at the international level; Essay III investigates the effect of alcohol abuse on crime in the united states. Essay I of this dissertation uses state level data from the United States for the period 1970-1998 to estimate the impact of alcohol abuse on income growth by utilizing per capita beer consumption as the measure of alcohol abuse. Results suggest that, even though generally small, there is a negative relationship between alcohol abuse and income growth once the endogeneity between income growth and per capita beer consumption is addressed by utilizing levels of excise alcohol taxes and the Minimum Drinking Age Law of 21 as instruments. These results indirectly favor the previous research on two dimensions: First, alcohol abuse generates a significant burden on the economy; Second, increases in excise alcohol taxes would be efficient in terms of income growth. Essay II of this dissertation uses data from 72 countries for the period 1960-1995 to estimate the impact of alcohol abuse on income growth by utilizing per capita beer, wine, liquor, and total ethanol consumption as the measures of alcohol abuse. Results suggest that, even though generally small, there is a negative significant relationship between per capita beer consumption and income growth once the endogeneity between income growth and per capita beer consumption is addressed with system GMM dynamic panel estimators. These results show that per capita beer consumption is the medium of alcohol abuse not only in the United States, but also around the world. Moreover, these results favor the previous research on the fact that alcohol abuse generates a significant burden on economies. Essay III of this dissertation uses state level data from the United States for the period 1982-2000 to investigate the relationship between crime and alcohol abuse by utilizing per capita beer consumption as the measure of alcohol abuse. Potential endogeneity between per capita beer consumption and crime is addressed by using excise beer taxes and alcohol control measures as instruments. Results show that alcohol abuse seems to have a positive impact overall on the crime rate. Nevertheless, the effect is not uniform among different crime types. In the case of property crime types, results suggest that alcohol abuse plays a more important role in crime types that require a lesser degree of organization and more spontaneity (i.e., larceny theft versus burglary and motor vehicle theft). In the case of violent crime types, results suggest that the impact of alcohol abuse is more pressing in non-murder crime types versus murder. These results have policy implications: excise alcohol taxes and alcohol control policies may play a role in reducing certain crime types, which are larceny theft, rape, robbery, and aggravated assault, but not the other crime types, which are burglary, motor vehicle theft, and murder.

This dissertation seeks to analyze, both theoretically and empirically, the impact of quality of governance on growth by looking at various dimensions of the concept of governance. We use a dynamic panel estimator and various indicators of governance to estimate the impact of governance on growth. Our empirical results suggest a positive and statistically significant impact of governance on growth. The second part of the analysis looks at a possible transmission mechanism of the effect of governance on growth through the composition of expenditures. As such, we estimate a seemingly unrelated regressions (SUR) model with shares of three functional categories of public expenditures – education, health, and defense – in total spending as the dependent variables. We find that high quality governance leads to a higher share of education and health expenditures and a lower share of defense expenditures in total expenditures. Further, we examine the impact of governance of public capital spending. Our empirical results from this analysis suggest that high quality governance is associated with a smaller share of capital expenditures in total expenditures

This dissertation is an investigation into one of the important functions of the banking system: to transform short-term liquid deposits into long-term illiquid financial assets that can fund long gestation activities and, thus, raise the rate of economic growth. To investigate this function empirically, the dissertation uses two new data sets on the maturity of bank credit to the private sector. First data set contains yearly observations covering 74 countries during the period from about 1990 to 2005, while the second data set contains quarterly observations covering 14 transition countries from about 1995 to 2006. Using the data on a broad set of countries, the dissertation shows that economic growth is enhanced in countries where the financial system extends more long-term credit. This finding is the first empirical confirmation of the theoretical predictions regarding the liquidity transformation function of banks. Furthermore, using the same data set, the dissertation shows that credit maturity depends on a number of institutional and economic factors. The determinants of credit maturity have an impact on economic growth via their influence on the availability of long-term external financing. Credit maturity is longer in countries with strong legal institutions, with low inflation, with deeper financial markets, and with schemes for sharing credit information between financial institutions. From a policy perspective, the institutions for sharing credit information probably present the most interest because their establishment is a policy choice. Findings from the broad set of countries are confirmed in the second data set using several definitions of maturity. Additional results from the second data set suggest that credit maturity is longer in countries at the higher level of economic development, with less liquid stock markets, and with more privately owned domestic banks. Furthermore, the results suggest that credit information sharing mechanisms lengthen the maturity of credit if credit information sharing institutions are privately owned or have greater quality of information.

What is the impact of financial development on economic growth and how institutional quality affects the role of financial development on economic growth? This thesis attempts to answer to these questions using a fixed effects estimation and two-step GMM estimator on a panel dataset of 93 countries from 2000-2007. The preposition is that financial sector development increases the availability of extra finance thereby increasing firms investment, which is essential for economic growth. The findings suggest that bank credit has anegative impact on economic growth. However when interacted with protection of property rights, bank credit has a positive impact economic growth. Additionally results further indicate that stock market capitalization is important for economic growth. For Countries that exhibit low levels of protection of property rights, stock market capitalization has a negative impact but countries that exhibit high protection of property rights the impact of stock market capitalization on growth is positive.

The fact that saving is one of the main factors to economic growth is unquestionable. Accumulated saving can be consider as the sources of capital stock to which play a crucial role in creating investment, production, and employment. And all these activities eventually enhance the economic growth. Therefore the main objective of this paper, ―The relationship between domestic saving and economic growth and convergence hypothesis: case study of Thailand‖, was to investigate the causality relationship between the domestic saving and economic growth of Thailand. This paper will analyze whether the direction of causality go from domestic saving to economic growth, or vice versa. Granger causality test were conducted by using time series annual data from 1960 to 2010, and the empirical result suggests that the direct of causality go from economic growth to domestic saving only. Aiming to grow its economy, Thailand had had development plans which used both saving and direct investment to stimulate economy. This paper examine whether the convergence hypothesis does hold in Thailand. This part would check whether or not Thailand is in the process of convergence, catching up, lagging behind, loose catching up, loose lagging behind or divergence over time compared with other developed countries. This test was conducted in pairwise between Thailand-Singapore, Thailand-United States, Thailand-United Kingdom, deployed data from 1970 to 2010, and the Augmented Dickey–Fuller (ADF) Test. The regression results demonstrate that convergence hypothesis does not hold in Thailand. Finally, the result of Granger Causality report that economic growth rate does matter lead to growth rate of domestic savings in Thailand only. Thus, in order to learn the effect of gross domestic saving per capita growth rate can help narrow the different of GDP between two countries concerned, this paper will examine the correlation of two variables, deployed the OSL methods to investigate the correlation between gross domestic saving growth rate and the different of GDP per capita between Thailand and Singapore. This test also examine whether saving does help support convergence hypothesis for Thailand or not. The test results shows that domestic saving growth rate does not help narrowing the range of different of income of Thailand and Singapore which mean that domestic saving growth rate does not support the convergence hypothesis in Thailand.

Health is one of the most important components of human capital. It can affect production level of a country through various channels. In this study the causal relationship of health and real GDP per capita income in 5 low income countries of Africa south of the Sahara is analyzed using granger causality test. Unbalanced panel data set during the year 1970 to 2009 is used. Life expectancy and mortality rate are used as a proxy for health. The result revealed that mortality rate has a significant and negative impact on real per capita income. The Granger causality test showed, real GDP per capita and mortality rate have causal or bidirectional relationship. On the other hand, real GDP per capita does not granger cause life expectancy, but life expectancy granger cause real GDP per capita. The comparative descriptive analysis of the health indicators in different income groups of the world also showed that, higher income countries are better off in their health status.