FDI and Local Financial Market Development in Oil Exporting and Importing Emerging Economies: VAR Panel Approach

Introduction

Generally various justifications of the linkages between financial market development and FDI inflows through developing and developed countries have been introduced by literature of FDI. Moreover the role of FDI in total capital flows has been significantly increased during past decades where in 1998, more than half of all private capital flows to developing countries have been contained by FDI. This shift in the combination of capital flows has been simultaneous with a change in emphasis among policymakers in developing countries to absorb more FDI, particularly after the 1980s debt crisis and the recent distress in emerging market economies (EMEs). Since FDI has numerous positive effects such as productivity advantages, technology relocations, the presentation of new procedures, managerial skills, and know-how in the domestic market, worker training, international production networks, and access to markets, policymakers have had significant efforts to attract FDI in EMEs during past decades (Alfaro et al, 2003).

If foreign firms suggest new products or processes to the local market, propagation of new technology leads to gain in domestic firms. Also, technology propagation can happen from labor migration as domestic workers move from foreign to national firms. In addition to the direct capital financing that caused by FDI, these gains imply that FDI has a significant role in updating the domestic economy and stimulating growth. Hence, governments have offered extraordinary motivations to foreign firms to absorb companies in EMEs. However, growth regressions introduced by Borensztein et al. (1998) and Carkovic and Levine (2003) indicate that there are little support for FDI as an exogenous positive effect for economic growth at the macroeconomic level.

Also, the empirical studies following Hirschman’s (1958) tried to introduce and promote the role of FDI in EMEs including backward linkages to achieve economies of scale for existing firms and the importance of linkages that multinationals can generate for the creation of new firms. However, it should be mentioned that adequate developed financial markets are important to create potential linkages of FDI.

Moreover, the empirical studies such as Hermes and Lensink (2003), Alfaro et al. (2004, 2010), Durham (2004), Azman-Saini et al. (2010), Choong (2012) show that the development of financial market is important. The traditional insight indicates that financial development is a critical factor and also a main catalyst of economic growth. As first reason, Shen and Lee (2006) show that a more developed financial system can rise the efficiency for allocation of resources and monitoring of economic conditions and decreasing information asymmetries, so leading to high economic growth. Furthermore, according to Greenwood and Jovanovic (1990) and Levine (1991), financial system can create facility for economic growth via two channels including i) mobilizing savings (i.e. rising the capacity of resources accessible to finance investment, ii) screening and monitoring investment projects (i.e. lowering information attainment costs); hence the efficiency of the projects will be increased via the two channels. As second reason, the volume of credit rationing in financial markets can be influenced by financial systems and so potential entrepreneurs will be constrained which can affect economic growth. This phenomenon is particularly prevalent for an entirely new technology that influences domestic and export markets (Alfaro et al. 2004). As third reason, when foreign firms tend to extend their innovative operations in the host country, the financial sector can determine the ability of foreign firms to borrow, which can lead to increase the possibility for technological spillovers to local firms. So, if financial markets in the host country are more developed, the diffusion procedure will be more effective and the subsidiary of a multinational corporation can easily invest in the host country (Hermes & Lensink, 2003).

Hence, a sound financial sector is a critical element and prerequisite for the country to emerge new innovations and allocate its resources efficiently (Demetriades & Andrianova, 2004). Moreover, financial channels can be considered as a facilitator for growth except its role as a determinant for growth. It should be mentioned that the productivity of financial market is important to the economic growth. Indeed, some studies such as Bordo and Meissner (2006) and Beck et al. (2000) have explained that the probability of financial crisis occurring will be decreased and the economy can be more resilient in the face of crises in countries with efficient financial systems. In fact, the economic growth will be faster in countries with healthier developed financial systems, since the more efficient financial markets and institutions work most productively in mobilizing savings (Bekaert et al. 2003; Ranciere et al. 2006). Moreover, Blejer (2006) show that the probability of banking and currency crises is less in countries with efficient financial systems, and the countries endure much less when a crisis does happen. While, empirical studies as a stylized fact show that financial system have significant and positive effect on the relationship between FDI and economic growth, the question is that how financial system effects this relationship.

Finally evidences show that FDI now represents the largest component of net resource flows to developing countries, surpassing official development assistance, portfolio investments, and bank loans (Miyamoto, 2003, De Mello, 1999, Zhang, 2001; and Ashraf Abdelaah, 2010). So, this study tries to evaluate the interactions between FDI and financial development indicators in oil exporting and importing EMEs[1] based on data availability. The EMEs has been selected by Banco Bilbao Vizcaya Argentaria (BBVA) Research criteria.

The rest of the paper is structured as follows. Section (2) reviews the literature on FDI and its related interaction with financial development. Section (3) discusses on realized facts. The methodology of research will be represented in Section (4). Section (5) analyzes the empirical results and finally, Section (6) concludes relevant remarks.

2. Literature Review

FDI is traditionally measured as a form of international inter-firm co-operation that includes significant equity stake and effective management decision power in, or ownership control of, foreign enterprises. FDI is also considered to encompass other broader, heterogeneous non-equity forms of co-operation that include the supply of palpable and impalpable assets by a foreign enterprise to a local firm. Those broader cooperative association include most type of quasi-investment arrangement, such as licensing, leasing, and franchising; start-up and international production sharing arrangements; joint ventures with limited foreign equity participation; and broad R&D co-operation (De Mello, 1999).

In the existence of FDI, aggregate production in the host economy is carried out by combining labor and physical capital. Generally, by increasing the stock of physical capital in the host economy, as foreign-owned capitalis accumulated, and indirectly, by encouraging human capital development and promoting technological upgrading, FDI influences growth directly. It is also important to investigate the degree of complementarity and substitution between domestic investment and FDI, because a simplistic Schumpeterian view of FDI related innovative investment that emphasizes creative destruction through substitution may overlook the scope for complementarity between FDI and domestic investment. Under complementarity, innovations embodied in foreign investment may create, rather than reduce, rent accruing to older technologies (Young, 1993). Also, if FDI is expected to affect growth positively, it may be argued that it requires some degree of complementarity with domestic investment, at least in the short run, given that the existing factor endowments in the host country act as a FDI determinant.

Moreover, the introduction of FDI in standard Ramsey models yields important results. Under constant results to domestic capital, the condition for saddle point stability with FDI indicates that negative consumption may not be avoided, and so FDI may be immiserising (Bhagwati, 1973; Brecher and Diaz Alexandro, 1977; Calvo et al., 1996) or dynamically inefficient. On the other hand, as in the tradition of endogenous growth models, long-run growth can be realized if the marginal product of capital can be restricted away from the rate of time preference as the stock of FDI rises, and the long-run growth rate depends positively on FDI. Increases in the stock of foreign-owned capital lead to temporary rises in the output growth rate if diminishing returns prevail in the aggregate. However, the FDI-led growth can also be shown to depend on the degree of complementarity between capital stocks embodying domestic and foreign technologies, and the volume of FDI as a share of GDP. Under linearity, the growth rates of the capital stock and output are constant and equal to the growth rate of consumption, and permanent increase in FDI leads to the long-run output growth rate (De Mello, 1999).

2.1 Review of the Literature on FDI and Growth

There is a huge literature emphasizing the positive impact FDI may have on economic growth. Next to the direct increase of capital formation of the recipient economy, FDI may also help increasing growth by introducing new technologies, such as new production processes and techniques, managerial skills, ideas, and new varieties of capital goods. In the new growth literature the importance of technological change for economic growth has been emphasized (Grossman and Helpman, 1991; Barro and Sala-i-Martin, 1995). The growth rate of less developed countries (LDCs) is perceived to be highly dependent on the extent to which these countries can adopt and implement new technologies available in developed countries (DCs). By adapting new technologies and ideas (i.e. technological diffusion) they may catch up to the levels of technology in DCs. One important channel through which adoption and implementation of new technologies and ideas by LDCs may take place is FDI. The new technologies they introduce in these countries may spillover from subsidiaries of multinationals to domestic firms (Findlay, 1978). The use of new technologies may be important in contributing to higher productivity of capital and labor in the host country. The spillover may take place through demonstration and/or imitation (domestic firms imitate new technologies of foreign firms), competition (entrance of foreign firms leads to pressure on domestic firms to adjust their activities and to introduce new technologies), linkages (spillovers through transactions between multinationals and domestic firms), and/or training (domestic firms upgrade the skills of their employees to enable them to work with the new technologies) (Kinoshita, 1998; Sjoholm, 1999a).

The next question is what conditions in the host country are important to maximize the technology spillovers discussed above? In the literature it has been emphasized by some that the spillover effect can only be successful given certain characteristics of the environment in the host country. These characteristics together determine the absorption capacity of technology spillovers of the host country. Thus, FDI can only contribute to economic growth through spillovers when there is a sufficient absorptive capacity in the host country.

Several country studies have been carried out, providing diverging results on the role of FDI spillovers with respect to stimulating economic growth. These studies deal with the productivity effects of FDI spillovers on firms or plants using micro level data. Whereas positive effects from spillovers have been found, e.g. Mexico (Blomstrom and Persson, 1983; Blomstrom and Wolff, 1994; Kokko, 1994), Uruguay (Kokko et al. 1996) and Indonesia (Sjoholm, 1999b), no spillovers were traced in studies for Morocco (Haddad and Harrison, 1993) and Venezuela (Aitken and Harrison, 1999). These diverging results may underline the crucial role of certain host country characteristics necessary to let FDI contribute positively economic growth through spillovers. They emphasize the difference in absorptive capacity between countries to adopt FDI.

Some authors argue that the adoption of new technologies and management skills requires inputs from the labor force. High-level capital goods need to be combined with a labor who is able to understand and work with the new technology. Therefore, technological spillover is possible only when there is a certain minimum, or ‘threshold’ level of human capital available in the host country (Borensztein, et al., 1998). This suggests that FDI and human capital are complementary in the process of technological diffusion. Other authors argue that the process of technological spillovers may be more efficient in the presence of well-functioning markets. Under these circumstances, the environment in which FDI operates ensures competition and reduces market distortions, enhancing the exchange of knowledge among firms (Bhagwati, 1978; Ozawa, 1992; Balasubramanyam et al., 1996). Some authors stress that the establishment of property rights – in particular intellectual property rights – is crucial to attract high technology FDI (Smarzynska, 1999). If intellectual property rights are only weakly protected in a country, foreign firms will undertake low technology investments, which reduces the opportunities for spillover effects and improvements of productivity of domestic firms.

2.2. Financial Development and Economic Growth

The costs of acquiring information, enforcing contracts, and making transactions create incentives for the emergence of particular types of financial contracts, markets and intermediaries. Different types and combinations of information, enforcement, and transaction costs in conjunction with different legal, regulatory, and tax systems have motivated distinct financial contracts, markets, and intermediaries across countries and throughout history (Levine, 2004).

In arising to ameliorate market frictions, financial systems naturally influence the allocation of resources across space and time (Merton and Bodie, 1995). For instance, the emergence of banks that improve the acquisition of information about firms and managers will undoubtedly alter the allocation of credit. Similarly, financial contracts that make investors more confident that firms will pay them back will likely influence how people allocate their savings. As a final example, the development of liquid stock and bond markets means that people who are reluctant to relinquish control over their savings for extended periods can trade claims to multiyear projects on an hourly basis. This may profoundly change how much and where people save.

To organize a review of how financial systems influence savings and investment decisions and hence growth, we focus on five broad functions provided by the financial system in emerging to ease information, enforcement, and transactions costs. While there are other ways to classify the functions provided by the financial system (Merton, 1992; Merton & Bodie, 1995, 2004), we believe that the following five categories are helpful in organizing a review of the theoretical literature and tying this literature to the history of economic thought on finance and growth. In particular, financial systems:

• • Produce information ex ante about possible investments and allocate capital
• • Monitor investments and exert corporate governance after providing finance
• • Facilitate the trading, diversification, and management of risk
• • Mobilize and pool savings
• • Ease the exchange of goods and services

While all financial systems provide these financial functions, there are large differences in how well financial systems provide these functions.

Financial development occurs when financial instruments, markets, and intermediaries ameliorate – though do not necessarily eliminate – the effects of information, enforcement, and transactions costs and therefore do a correspondingly better job at providing the five financial functions. Thus, financial development involves improvements in the (i) production of ex ante information about possible investments, (ii) monitoring of investments and implementation of corporate governance, (iii) trading, diversification, and management of risk, (iv) mobilization and pooling of savings, and (v) exchange of goods and services. Each of these financial functions may influence savings and investment decisions and hence economic growth. Since many market frictions exist and since laws, regulations, and policies differ markedly across economies and over time, improvements along any single dimension may have different implications for resource allocation and welfare depending on the other frictions at play in the economy (Levine, 2004).

In terms of integrating the links between finance and growth theory, two general points are worth stressing from the onset. First, a large growth accounting literature suggests that physical capital accumulation per se does not account for much of long-run economic growth (Jorgenson, 1995, 2005). Thus, if finance is to explain economic growth, we need theories that describe how financial development influences resource allocation decisions in ways that foster productivity growth and not aim the analytically spotlight too narrowly on aggregate savings.

Second, there are two general ambiguities between economic growth and the emergence of financial arrangements that improve resource allocation and reduce risk. Specifically, higher returns ambiguously affect saving rates due to well-known income and substitutions effects. Similarly, lower risk also ambiguously affects savings rates (Levhari and Srinivasan, 1969). Thus, financial arrangements that improve resource allocation and lower risk may lower saving rates. In a growth model with physical capital externalities, therefore, financial development could retard economic growth and lower welfare if the drop in savings and the externality combine to produce a sufficiently large effect.

2.3. Interaction between FDI and Financial Development

The literature on FDI has advanced several explanations of those links between financial market development and FDI inflows which can exert a positive influence through the transfer of new technology and spillover efficiency. However, such a positive impact depends on certain circumstances. Capital shortage, which leads to increased poverty in developing countries, has been frequently related to deficient, unstable financial markets that fail to accumulate and allocate resources efficiently (Stiglitz, 1998). In a trade, English capital is instantly at the disposal of persons capable of understanding the new opportunities and making good use of them. In countries where there is little money to lend enterprising traders are long kept back, because they cannot at once borrow the capital, without which skill and knowledge are useless (Bagehot, 1873).

Schumpeter (1912) argues that monetary institutions are important and money could be a separate driving force. Literature on finance goes hand in hand with that line. It can be argued that reduce transaction costs, allocate the capital to the highest returns projects will lead to higher output growth and reduce poverty. Gurley and Shaw (1955); Goldsmith (1969) and Hicks (1969) argue that development of a financial system is important in catalyzing the economic growth. McKinnon (1973) and Shaw (1973) argue that any increase in the level of financial development, which follows financial liberalization, will lead to a higher level of growth.

Greenwood and Jovanovic (1990) and King and Levine (1993) show that financial market development reduces informational frictions and improves resource allocation more efficiently. Hermes and Lensink (2003) shows that FDI plays an important role in contributing to economic growth but the level of financial development is crucial for these positive effects to be realized. Alfaro et al. (2004) and Choong et al. (2005) show that better developed financial systems tend to benefit more from FDI. Omran and Bolbol (2003), show that domestic financial reforms should precede policies promoting FDI. Beck et al. (2000) suggest that financial systems are important for both productivity and development. Ashraf Abdelaah (2010) shows that Countries with better financial systems and healthy business environment are able to attract more FDI. Rebecca et al. (2009) examined the volatility of capital flows (FDI, portfolio flows, and other debt flows) following the liberalization of financial market and found that capital flows are responding differently to financial liberalization. Surprisingly, portfolio flows appear to show little response to capital liberalization, while FDI flows show significant increases in volatility, particularly for the emerging markets (Ashraf Abdelaah, 2010).

James Ang (2009) shows that efficient financial system facilitates FDI to create backward linkages, which are beneficial to the local suppliers in the form of improved production efficiency. This implies that financial market development plays a crucial role in the host country and its ability to attract FDI and absorbs the benefits associated with it. Durham (2004) observed that the deeper financial systems absorb capital inflows such as FDI.

Furthermore, financial markets affect both the financing of investment and day-to-day business activities. Wurgler (2000) shows that even if financial development does not lead to higher levels of investment, it seems to allocate the existing investment better. In this paper, we examine whether better-developed financial markets are able to catalyze the flow of foreign direct investment. To do this, we use a battery of financial market variables that exist in the literature

3. Realized Facts

It is accepted that FDI took an impressive surge in the early 1990s, triggered by the removal of barriers on capital flows, the formation of regional free trade arrangements, and the expansion of global vertical production methods and inter-process (component parts) trade (among others, see Fry, 1993; Athukorala and Menon, 1997).

In Tables (1) and (2), net FDI inflows to oil importing and exporting EMEs has been shown. Generally as Table (1) and (2) show, net FDI inflows (as percentage of GDP) increased by more than 6 times during 1990-2014 in oil exporting and importing EMEs. In addition, it is shown that net FDI inflow to oil importing countries is more than oil exporting counties which it is not unexpected.

Table (1): Net FDI Inflow (% GDP) for Oil Exporting Emerging Market Countries

Source: World Bank

Table (2): Net FDI Inflow (% GDP) for Oil Importing Emerging Market Countries

Source: World Bank

Moreover, in Figures (1) and (2), data on FDI and financial development show the links between financial market development (domestic credit to private sector) and FDI inflows for oil exporting and importing countries, respectively. Generally, the results for oil exporting countries seem different from oil importing counties. It seem that there is a negative relationship between FDI inflows (%GDP) and domestic credit to private sector (%GDP) for oil exporting countries, while it is positive for oil importing countries.

Figure (1). FDI Inflows (%GDP) and Domestic Credit to Private sector (%GDP) for Oil Exporting Countries, 1990-2014 (Average).

Source: World Bank and Research Calculation

Figure (2). FDI Inflows (%GDP) and Domestic Credit to Private sector (%GDP) for Oil Importing Countries, 1990-2014 (Average).

Source: World Bank and Research Calculation

4. Methodology and Data

The data used in the study including the measures of FDI, and financial market development indicators have been described in this section. One of the essential problems in empirical and theoretical literatures is that precise causality analysis of the relationship between FDI and financial market development indicators has not been suggested. Because the suitably long time series necessary for using Granger causality tests are not accessible. However, recent theoretical developments in Granger causality approaches have introduced tests using relatively short time series possible through the use of panel data approach which the methodology proposed by Larrain et al. (1997) Hurlin and Venet (2001) and Robert et al. (2005) and applied by Erdil and Yetkiner (2009).

This study tries to investigate Granger causality between FDI and local financial market development indices. It should be mentioned that FDI calculated by the net inflow of foreign direct investment/GDP, which is the total of equity capital, reinvestment of earnings, long-term capital and short-term capital that are displayed in the balance of payments. However, FDI inflows with a negative sign imply that at least one of the three elements of FDI is negative and not balance by positive amounts of the remaining elements. The data are from World Bank Financial Structure Database.

Secondly, local financial market development introduced by various measures which can be categorized into two levels: measures relating to the banking sector and measures relating to the equity markets. For the first group, the study will employ first, Private Credit by Deposit Money Banks to GDP (DCPS) and second, Private Credit by Deposit Money Banks and Other Financial Institutions to GDP (DCPBS). They are the indicators of the activity of financial intermediaries in one of its major function: channeling savings to investors. Both measures have been employed by empirical studies (the first by Levine and Zervos (1998) and the second by Levine et al. (2000, 2002) and Beck et al. (2000).

Third, liquid liabilities (LL) of the financial system that it is the sum of currency and interest-bearing liabilities of banks and other financial institutions as ratio of GDP. It is the main available index of financial intermediation, since it contains all three financial sectors. Also, as a usual indicator of financial depth and the general size of the financial sector is liquid liabilities which does not distinguish between the financial sectors or between the uses of liabilities.

For the second group, to calculate the activity or liquidity of the stock markets, the study uses stock market total value traded to GDP (MCLC), which is defined as total shares traded on the stock market exchange as ratio of GDP, and as measure of the size of the stock market, the study uses the stock market capitalization to GDP ratio (ST) which equals the value of registered shares as percentage of GDP. Data for financial variables are available from the World Bank Financial Structure.

The selected sample comprises two groups of countries of emerging markets including oil exporting and importing. In November 2010, BBVA Research introduced a new economic concept, to identify a key emerging markets. This classification is divided in two set of developing economies. As of March 2014, the groupings are as follows: Expected Incremental GDP in the next 10 years to be larger than the average of the G7 economies, excluding the US, and or to be lower than the average of the G6 economies (G7 excluding the US) but higher than Italy’s. The first group of our sample comprises namely Mexico, Russian, Iran, Kazakhstan, Nigeria, Saudi Arabia, United Arab Emirates, Kuwait and Venezuela. These countries were classified into oil exporting countries and emerging markets. And the second group of emerging markets oil importing countries include Brazil, China, India, Indonesia, Turkey, Argentina, Bangladesh, Chile, Colombia, Egypt, Malaysia, Pakistan, Peru, Philippines, South Africa, Thailand, Korea, Rep.,  and Sri Lanka from 1970-2014.

5. Empirical Results

In a panel data approach, suppose a time-stationary vector auto-regressive specification. For each cross section and :

                   (1)

                         (2)

with  and ,  where  and  are  , respectively.

At the first step, the hypotheses to be tested are the homogenous non-causality hypotheses, as follows:

For equation (1):

    (3)

For equation (2):

     (4)

In the general case, the test statistics can be calculated by the following Wald test proposed by Hurlin and Venet (2001):

           (5)

where SN represents the total number of observations,  stands for the restricted sum of squared residuals achieved under whereas  is unrestricted sum of squared residual calculated from equations 3 and 4. This method pursues a standard Granger causality assumption where the variables listed into the system should be time-stationary. The results for unit root test of FDI and financial development indicators based on Im, Pesaran and Shin test (IPS) (2003) are reported in Table (3). It should be mentioned that because of unbalanced data, IPS test is employed. The null hypothesis is that there is a unit root.

Table (3): Results of the Unit Root Test for FDI and Financial Market Indicators

The Figures in parentheses are probability.

Source: Research Findings

According to Table (3), FDI is stationary at level in both oil exporting and importing countries. However, the all financial development indicators are stationary at first difference in both oil exporting and importing countries, except MCLC which is stationary at level in oil importing countries. Given these results, we have to use stationary first difference level variables for conducting the Granger causality analysis. It should be mentioned that the causality relationships between two variables are subject to evaluation. The results for Granger causality test are represented for both oil exporting and importing countries in Table (4) and Table (5) where financial development indicators are Granger cause for FDI in Table (4) and FDI is Granger cause for financial development indicators in Table (5).

Table (4): Granger Causality Analysis FDI to Financial Market

Source: Research Findings, F_c is 1.6.

Table (5): Reverse Granger Causality Analysis Financial Market to FDI

Source: Research Findings, F_c is 1.6.

The panel data VAR models (equations 1, 2) have been fitted to examine the simultaneous relationships between FDI and Financial market development indicators. For both oil exporting and importing countries, the econometric specification has been considered as FDI=f(X) where X denotes financial development indicator. The results are given in Tables (6) and (7) for oil exporting and importing countries, respectively. The results show that all models revealed an acceptable overall fit. Also, the impulse response functions are represented in Figures (3) and (4) for both oil exporting and importing countries, respectively.

For oil exporting countries in Table (6), there are positive and significant coefficients for FDI lag, stock market total value traded to GDP and stock market capitalization to GDP ratio, which implies that countries with high levels of financial market development attract more FDI. However, the coefficients are negative and not significant for domestic credit to private sector provided by banks (% of GDP), domestic credit provided by banks and other financial institutions (% of GDP), liquid liabilities (M3) as percentage of GDP in oil exporting countries.

Table (6): Contemporaneous Relationship between FDI and Financial Development Indicators for Oil Exporting Countries

Source: Research Findings

The impulse response function based on VAR panel results are shown in Figure (3) for oil importing countries. According to the Figure, the shock will be eliminated after a few periods.

Figure (3): Impulse Response Functions for FDI and Financial Development Indicators in Oil Exporting Countries

Source: Research Findings

Results for oil importing countries has been displayed in Table (7). According to the results in Table (7), there are positive and significant coefficients for FDI lag and other financial development indicators except for stock market capitalization to GDP ratio. Also, the significant coefficients of domestic credit to private sector provided by banks (% of GDP) and domestic credit provided by banks and other financial institutions (% of GDP) implies that the banking sector of oil importing countries and high levels of financial market development lead to attracting more FDI.

Table (7): Contemporaneous Relationship between FDI and Financial Development Indicators for Oil Importing Countries

Source: Research Findings

The impulse response function based on VAR panel results are shown in Figure (4) for oil importing countries. According to the Figure, the stock market indicators have had efficient role in the model than banking system indicators and the results are acceptable between FDI and stock market indicators where shock will be eliminated after a few periods.

Figure (4): Impulse Response Functions for FDI and Financial Development Indicators in Oil Importing Countries

Source: Research Findings