Food security and political instability-foreign divestment analysis
| DOI | https://doi.org/10.1108/JCEFTS-04-2022-0025 |
| Published date | 31 January 2023 |
| Date | 31 January 2023 |
| Pages | 55-63 |
| Subject Matter | Economics,International economics |
| Author | Yogeeswari Subramaniam,Nanthakumar Loganathan,Tajul Ariffin Masron |
Food security and political
instability-foreign
divestment analysis
Yogeeswari Subramaniam and Nanthakumar Loganathan
Faculty of Management, Universiti Teknologi Malaysia,
Kuala Lumpur, Malaysia, and
Tajul Ariffin Masron
School of Management, Universiti Sains Malaysia, George Town, Malaysia
Abstract
Purpose –Prior studies have foundevidence for the role of political instability onforeign divestment (FD)
where a high levelof instability encourages FD decisions.Therefore, this paper aims to examine how the food
securitylevel explains the linkage between political instabilityand FD.
Design/methodology/approach –The current study adopts the system generalised method of moment
(GMM) to achieve accurate and reliable empirical evidence for 60 developing countries in the period 2011 to 2020.
Findings –The results demonstrated a negative and significant relationship between political instability
and FD on food security. This suggests that politicalinstability’s impact on divestment tends to be lower in
countries with better levels of food security. Other controlled variables, such as economic growth, human
capitaland trade openness, also have a negative effect on FD, discouragingFD.
Practical implications –As a result, policymakers could takesteps to ensure that food security levels
reach acceptablelevels, as food security has been linked to a country’spolitical stability.
Originality/value –To the authorslimited knowledge, no studies have looked at therelationship between
political instability and food security in determining a country’s FD. Our study aims to analyse this issue
because the currentglobal crisis, which is being caused by high food prices, will push millionsof more people
into severe povertyand exacerbate hunger and malnutrition
Keywords Foreign divestment, Food security, Political instability, Developing countries
Paper type Research paper
1. Motivation
As political instability is relatively high and expected to rise globally, the effect of political
stability on foreign divestment (FD) has been one of the most highly debated areas of research.
Verisk Maplecroft, a risk consultant, has stated that the pandemic’s fallout causes many
countries to become more unstable, predicting that developed and developing countries will
encounter more political instability by 2023 (Matthew Moshiri, 2022). A few studies have been
conducted on the relationship between political stability and FD, where political stability
encompasses corruption, institutional strength and the rule of law (Nishimura and Liu, 2016;
Hasan et al., 2017;Nguyen, 2019;Kammoun et al., 2020;Loukil et al.,2021;Nguyen et al .,2 022).
It, therefore, investors are more cautious when choosing foreign direct investment (FDI)
destinations. For instances, poor institutions, the rule of law and a lack of accountability,
The first author wishes to thank Universiti Teknologi Malaysia for funding the project under the
UTM Fundamental Research (UTMFR) with cost center No. Q.J130000.3855.21H98.
Food security
55
Journalof Chinese Economic and
ForeignTrade Studies
Vol.16 No. 1, 2023
pp. 55-63
© Emerald Publishing Limited
1754-4408
DOI 10.1108/JCEFTS-04-2022-0025
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