The theory of the investment development path and agriculture in Eastern Europe.

The outdated investment development path results in Eastern Europe and the lack of focus on the agricultural sector necessitated this study. The generalised least squares estimator employed countries from 1993 to 2021 for agricultural sector data on 17 Eastern Europe. Eastern European agriculture is in the early phase of stage IV of the investment development path, consistent with the theory of the investment development path. Human capital enhanced net foreign direct investment. Agricultural trade openness, exchange rate, and inflation did not influence net foreign direct investment. Developed and transition countries in Eastern Europe were not distinguished regarding net foreign direct investment. Eastern European countries must increase agricultural growth relative to population growth. This would increase agricultural development. The increased income can be saved and channelled into domestic investments to spur additional growth. This would make capital available for export. The growth in human capital must be sustained to enhance technical know-how in agriculture that would accompany agricultural capital export. Agricultural sector managers of Eastern European countries must focus on enhancing the sector's supervisory and regulatory functions. The goal should be to reduce the costs of doing agricultural business through effective facilitation towards efficient agricultural markets.

Food manufacturing foreign divestment and domestic investment in developed countries.

Whilst there is some literature on the effect of inward foreign direct investment on domestic investment for the whole economy and the agricultural sector, that of foreign divestment on domestic investment for food manufacturing is rare. This paper contributes to the literature by estimating the crowding effect of foreign divestment on domestic investment in the food manufacturing sector using an unbalanced panel of 29 countries from 1991 to 2019. Foreign divestment crowded out domestic investment for developed countries in the short and long runs. In terms of the absolute reduction in domestic investment, the short-run effect is higher than the long-run effect. Policies to attract inward foreign direct investment and retain it should be pursued.

The Investment development path theory: Evidence from developing countries' agricultural sector.

Background: We examined the investment development path (IDP) through the perspective of developing countries' agricultural sector. Our analytical approach indirectly accounts for interactions among countries regarding cross-border resource transfers. Aside from providing knowledge on testing the IDP by inferential statistics, the information would be relevant for policymaking. Identifying the stage(s) in the IDP not only highlights the global appeal of agriculture but also guides firms seeking to expand beyond borders. This information is essential for developing an effective economic strategy. Methods: We employed data from 1991 to 2021 for 55 countries from the Food and Agriculture Organization Corporate Statistical Database (FAOSTAT) and applied a fixed effects estimator corrected for serial correlation and non-constant variances. Results and conclusions: We found that agriculture in developing countries is currently in stages I and II of the IDP. Broadly, agricultural production requires policies that would increase outward foreign direct investment and inward foreign direct investment. Domestic agricultural businesses in developing countries must develop capacity by learning from foreign multinationals. This would enable agricultural businesses to invest abroad. Such a move would lead to an increase in outward FDI. As this would have resulted from increased GDP per capita, it will lead to movement from the existing stage to higher ones.

Level of development, foreign direct investment and domestic investment in food manufacturing.

Background: Whilst the literature on the complementarity and substitutability of foreign direct investment (FDI) on domestic investment (DI) is not uncommon, the facet of food manufacturing is non-existent. This paper fills this void by investigating the effect of FDI on DI in the food manufacturing sector for developing, economies in transition and developed countries. Methods: Using an unbalanced panel data of 49 countries from 1993 to 2016, from FAOSTAT, estimated by the system generalised method of moments (GMM), the Wald statistics for the short and long-run effects of FDI on DI were computed for the development groups. Results: Developed economies experienced a crowd-out effect of FDI on DI in the short run, whilst the others experienced no significant effect. In the case of the long run, the food manufacturing sectors of all three development groups exhibited a crowd-out effect. The effect in the long run for all development groups together is a crowd-in. Analysing all country groups together could mask the results of the various country groups. Conclusions: A review of investment policies to prioritise FDI entry mode that favour domestic investment is needed. Improvement of the investment regulatory and administrative efficiency among others are recommended.