Suchergebnisse

The paper models the multinational choice between foreign direct investment in and exporting to a domestic market as an equilibrium outcome of strategic play between domestic and foreign firms. Two cases are considered, one in which the domestic firm can precommit to output levels (as, for example, through investment in a distribution network), and one in which such precommitment is not possible. The domestic firm's strategy in the case of precommitment includes aggressive efforts to deter or divert foreign investment and results in fewer observed equilibria with foreign investment than would otherwise occur. Tariffs designed to switch the foreign decision from exporting to direct investment may lead instead to monopolization of the market by the domestic firm.

This paper employs cross-country growth regressions for a sample of developing countries to examine the determinants of FDI. In addition to economic factors affecting foreign direct investment, the analysis also tests for the role of institutional quality (enforcement of property rights, corruption, etc.) and policy orientation factors (openness). The paper evaluates whether foreign investment responds to changes in levels of economic freedom. In addition it tests whether the insignificant coefficient found in previous studies is the result of the level of aggregation in the economic freedom data. Finally, it disaggregates the data on economic freedom and re-estimates the relationship between FDI and components of economic freedom. Foreign direct investment is found to vary positively with increases in certain components of economic freedom.

A large number of countries have enacted laws aimed at making it easier for firms to invest in their country, while many countries offer various monetary incentives and tax incentives to encourage inward Foreign Direct Investment (FDI). The desire to attract FDI is due not only to the fact that FDI brings in new investment boosting national income and employment, but also due to the expectation that inward FDI would also provide additional spillover benefits to the local economy that can result in higher productivity growth and increased export growth. This study aims to examine the impact of foreign direct investment on innovation in developing countries. The estimation of a panel threshold model on a sample of 54 developing countries for the 1980-2009 period shows the presence of non linear effects in the relationship between FDI and innovation. We find a threshold value of technological development below which FDI has a negative impact on innovation and above which FDI has a significant positive impact on innovation. We conclude that it is not enough for economic policy to attract foreign investments, it is still necessary to support domestic firms to build an absorptive capacity allowing them to enjoy the benefits of multinational firms.

Developing economies need foreign direct investments to complement domestic investment with a view to increase capital accumulation, productivity and growth rates. But, foreign direct investments (FDIs) may have costs in addition to the well-known benefits to the host country. Generating higher net benefits from FDI necessitates design and implementation of 'smart' investment policies by the host countries rather than the current orthodoxy of 'neutral' FDI policies, which is based on liberalizing the FDI inflows and aim to attract 'any' kind of FDI. In this article, we discuss such polices and how they relate to host country circumstances.

"This book offers a comparative and historical analysis of foreign direct investment (FDI) liberalization in China and India and explains how the return of these countries' diasporas affects such liberalization. It examines diasporic investment from Western FDIs and finds that diasporas, rather than Western nations, have fueled globalization in the two Asian giants. In China, diasporas contributed the lion's share of FDI inflows. In India, returned diasporas were bridges for, and initiators of, Western investment at home. Min Ye illustrates that diasporic entrepreneurs helped to build China into the world's manufacturing powerhouse and that Indian diasporas facilitated their homeland's success in software services development"--

We study a multinational enterprise's (MNE) choice of foreign direct investment (FDI) mode in a vertically related market with local input sourcing. We show that the vertical structure of the market and its features play a crucial role for the MNE's decision: backward linkages, enhanced upstream bargaining power, use of non-linear contracts, and interim unobservability of contract terms favor cross-border acquisition relative to greenfield investment. We also show that while a cross-border acquisition reduces welfare, greenfield investment can be welfare-improving. These results suggest that policy should distinguish among FDI modes as well as among markets with more or less dependence on backward linkages.

Investment is a macroeconomic variable and its well-known as the engine of economy that boosts economic growth, economic development and sustainable development. Investment plays an important role in the livelihood welfare of citizens. All economies require different types of investments particularly Foreign Direct Investment/ FDI in different sectors. Based on empirical researches, mostly FDI has positive impacts on the sustainable economic growth of the host economies. On one hand, FDI transfers technologies, skills, innovations, experiences, techniques and knowledge to the host economies. On the other hand, it provides host economies with stable financial resources for long period of time. Thus, it is the responsibility of governments to open their borders toward FDI inflows in order to attract this valuable financial resource. Despite the fact that countries require FDI but corruption is one of the main obstacles against it. Theoretically, there is a negative correlation between corruption and FDI inflows. In other words, corruption negatively impacts the FDI inflows and decreases FDI volume. Because, corruption increases costs and decreases benefits of FDI, corruption deteriorates the competitive trade environment; corruption discourages foreign investors through protecting domestic investors and corruption negatively effects the productivity of foreign investors. In practice, although most of the empirical researches showed that corruption negatively impacts the FDI flows. But some empirical researches also confirmed that there is a positive correlation between corruption and FDI flows. Hence, countries are responsible in fighting against corruption to attract more FDI and in return benefits their sustainable economic growth.

Investment is a macroeconomic variable and its well-known as the engine of economy that boosts economic growth, economic development and sustainable development. Investment plays an important role in the livelihood welfare of citizens. All economies require different types of investments particularly Foreign Direct Investment/ FDI in different sectors. Based on empirical researches, mostly FDI has positive impacts on the sustainable economic growth of the host economies. On one hand, FDI transfers technologies, skills, innovations, experiences, techniques and knowledge to the host economies. On the other hand, it provides host economies with stable financial resources for long period of time. Thus, it is the responsibility of governments to open their borders toward FDI inflows in order to attract this valuable financial resource. Despite the fact that countries require FDI but corruption is one of the main obstacles against it. Theoretically, there is a negative correlation between corruption and FDI inflows. In other words, corruption negatively impacts the FDI inflows and decreases FDI volume. Because, corruption increases costs and decreases benefits of FDI, corruption deteriorates the competitive trade environment; corruption discourages foreign investors through protecting domestic investors and corruption negatively effects the productivity of foreign investors. In practice, although most of the empirical researches showed that corruption negatively impacts the FDI flows. But some empirical researches also confirmed that there is a positive correlation between corruption and FDI flows. Hence, countries are responsible in fighting against corruption to attract more FDI and in return benefits their sustainable economic growth.

This paper investigates the impact of economic freedom and human capital on Foreign Direct Investment (FDI) in a large panel dataset of 137 developing and developed countries covering the period of 1995-2010. Foreign direct investment is by far the largest source of private capital flows to developing and middle income countries, far exceeding other private capital flows such as portfolio investment and remittances. Many of these countries have been liberalizing their policies in recent decades to attract more foreign direct investment. The ultimate goal of attracting more foreign direct investment is to augment limited domestic investment and spur economic growth through transfer of knowledge, technology, and managerial skills. The role of traditional determinants of FDI such as availability of natural resources, market size, and cheap labor are well researched in the literature. What has not received much attention is the impact of non-traditional determinants of FDI flows like the presence of economic freedom and high skilled labor in the recipient countries. Besides, there has not been any attempt to simultaneously model the impacts of economic freedom and human capital as well as their interaction on foreign direct investment inflows, a crucial void which this paper fills. In order to deal with potential endogeneity problem in the explanatory variables and unobserved country fixed-effects, we use dynamic panel data methods. The system generalized method of moments (S-GMM) estimator of Arellano and Bond, and Blundell and Bond are estimated in two-step procedure, using levels of the variables as instruments for the difference equation and differences of the variables as instruments for the levels equation. We test for instrument validity using Sargan's test and second order autocorrelation AR (2) in the differenced equation. The results show that economic freedom has a positive and significant effect on foreign direct investment in middle- and high-income countries. Human capital is a significant determinant of FDI in all countries. After accounting for endogeneity of and interaction between economic freedom and human capital, we find that the marginal effect of economic freedom on FDI is contingent upon the level of human capital in the recipient country. We postulate that Transnational Corporations (TNCs) care about the quality of human capital only in the case of low-income countries when they make their decisions to locate in developing countries. We do not find this to be the case with respect to TNCs' decisions to invest in middle-income and high-income countries.

The main purpose of this article is to study the effect of political risk on foreign direct investment in the Pacific Rim. The considered time period is from 1984 to 2008. In this study, 12 indexes of political risk offered by Political Risk Services Group have been used. After studying the stationarity of variables by Im-Pesaran Shin test, the benchmark model is estimated for 12 political risks and we come to the conclusion that the risks of Corruption, External Conflict, Internal Conflict, Investment Profile, and Military in Politics have significant effect on FDI.

In 2010, Portugal's outward foreign direct investment (OFDI) was severely affected by the global economic and financial crisis, with flows recording a negative figure of -US$ 8.4 billion, the lowest in an ever-steeper declining trend exhibited since 2005. Nevertheless, Portugal's OFDI stock increased almost three-fold between 2000 and 2010. During this period, Portugal's OFDI annual growth rates were lower than those of comparator economies, such as Spain or Ireland, and only slightly above those of Italy. OFDI flows in the 2001-2010 period were concentrated in the services sector, particularly in real estate, followed by retail and manufacturing. In contrast, there has been a clear decline of investment in financial services (largely explaining the negative figures recorded in 2010) and in the construction industry. Excluding 2010, the Netherlands has attracted a significant share of Portugal's OFDI. Investment in non-traditional destinations has gained importance in recent years, both in Europe (Romania, Bulgaria) and outside Europe (the United States, India), but their weight remains limited. The crisis affected OFDI policy, leading to growing concern regarding the localization of value-added activities in Portugal. There has been a shift in government policy in the past three years, prioritizing exports over direct investment as a mode of entry into foreign markets.