Food security and political instability-foreign divestment analysis.

Abstract

Purpose: Prior studies have found evidence for the role of political instability on foreign divestment (FD) where a high level of instability encourages FD decisions. Therefore, this paper aims to examine how the food security level explains the linkage between political instability and 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 political instability’s impact on divestment tends to be lower in countries with better levels of food security. Other controlled variables, such as economic growth, human capital and trade openness, also have a negative effect on FD, discouraging FD. Practical implications: As a result, policymakers could take steps to ensure that food security levels reach acceptable levels, as food security has been linked to a country’s political stability. Originality/value: To the authors limited knowledge, no studies have looked at the relationship between political instability and food security in determining a country’s FD. Our study aims to analyse this issue because the current global crisis, which is being caused by high food prices, will push millions of more people into severe poverty and exacerbate hunger and malnutrition.