scholarly journals The dissuasive effect of U.S. political influence on Chinese FDI during the “Going Global” policy era

2017 ◽  
Vol 20 (1) ◽  
pp. 38-69 ◽  
Author(s):  
Jing-Lin Duanmu ◽  
Francisco Urdinez
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Political Influence ◽  
The United States ◽  
Chinese Government ◽  
Host Countries ◽  
Firm Level ◽  
Economic Diplomacy ◽  
Country Level ◽  
Political Determinants

AbstractBuilding on the growing debate on political determinants of foreign direct investment, we investigate the relationship between U.S. political influence and the global distribution of China's outward foreign direct investment (OFDI). Using country-level and firm-level datasets of China's greenfield investment, we find strong evidence that Chinese state controlled firms strategically reduce investment in host countries under significant political influence of the United States. Our results are robust to alternative specification and two falsification tests. The findings suggest that the Chinese government uses FDI as a way of economic diplomacy.

Location Determinants of Indian Multinationals: A Multilevel Analysis

2019 ◽  
Vol 21 (5) ◽  
pp. 1200-1217
Author(s):  
Munmi Saikia
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Outward Foreign Direct Investment ◽  
New Wave ◽  
Host Countries ◽  
Firm Level ◽  
The Past ◽  
Country Level ◽  
Location Determinants ◽  
Multilevel Linear Regression

The study investigates a simultaneous act of country-level determinants and firm-level heterogeneity on location distribution of the new wave of outward foreign direct investment (OFDI) from India. Indian firms are nested within host countries. Therefore, the current study employs mixed multilevel linear regression model to analyse multilevel and longitudinal data. Using firm-to-destination data, the study finds that location distribution of Indian multinationals is simultaneously driven by firm-level heterogeneity and country-level determinants. The study shows that location determinants of the recent wave of OFDI of Indian firms are significantly different from the past wave.

Foreign Direct Investment and the Flying Geese Model: Japanese Electronics Firms in Asia-Pacific

2000 ◽  
Vol 32 (2) ◽  
pp. 281-304 ◽  
Author(s):  
David W Edgington ◽  
Roger Hayter
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Asia Pacific ◽  
Critical Examination ◽  
Host Countries ◽  
Billiard Ball ◽  
Firm Level ◽  
Geographical Patterns ◽  
Japanese Fdi

This paper is a critical examination of the ‘flying geese’ and ‘billiard ball’ models of foreign direct investment (FDI) and their ability to explain the spatial expansion of Japanese electronics multinationals (MNCs) in Asia-Pacific countries from 1985 to 1996. Data on Japanese FDI are analyzed in this region at the aggregate, sectoral, and firm level. The paper commences with a review of the flying geese model, especially that version which interprets Japanese FDI as a catalyst for Asian development, and the billiard ball metaphor which suggests a mechanism for host countries to ‘catch up’ with Japan. The authors then turn to an analysis of Japanese FDI in Asia-Pacific together with employment data for fourteen major firms. This allows an evaluation of the two models in terms of recent geographical patterns of investment and employment growth by electronics MNCs. A special case study of Matsushita Electric Industrial Co. Ltd (MEI) helps flesh out the evolving geography of Japanese electronics firms in Asia-Pacific. Although the results support the overall patterns suggested by the two models, the authors argue that metaphors and analogies such as flying geese and billiard balls should not be used casually and as a substitute for analysis.

scholarly journals Climbing the Rungs of the Quality Ladder: FDI and Domestic Exporters in Romania

2020 ◽  
Vol 130 (628) ◽  
pp. 937-955
Author(s):  
Matej Bajgar ◽  
Beata Javorcik
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Positive Relationship ◽  
Host Countries ◽  
Firm Level ◽  
Level Information ◽  
Quality Ladder ◽  
Quality Of Products

Abstract This article argues that inflows of foreign direct investment can facilitate export upgrading in host countries. Using customs data merged with firm-level information for 2005–11, it shows a positive relationship between the quality of products exported by Romanian firms and the presence of multinational enterprises (MNEs) in the upstream (input-supplying) industries. Export quality is also positively related to MNE presence in the downstream (input-sourcing) industries and the same industry, but these relationships are less robust. These conclusions hold both when the product quality is proxied with unit values and when it is estimated following the approach of Khandelwal et al. (2013).

scholarly journals The political determinants of foreign direct investment: a firm-level analysis

2018 ◽  
Author(s):  
Vincent Arel-Bundock
Keyword(s):  
Foreign Direct Investment ◽  
Political Institutions ◽  
Direct Investment ◽  
Multinational Firms ◽  
Statistical Significance ◽  
Machine Learning Techniques ◽  
The Political ◽  
Firm Level ◽  
Data Set ◽  
Political Determinants

Many large-N cross-national studies claim to show that political institutions and phenomena determine where foreign direct investment (FDI) flows. In this article, I argue that these studies tend to overemphasize statistical significance and often neglect to assess the explanatory or predictive power of their theories. To illustrate the problem, I estimate variations of a statistical model published in an influential article on “Political Risk, Institutions, and FDI.” I find that none of the political variables that the authors consider accounts for much of the variation in aggregate FDI inflows. To ensure that this underwhelming result is not driven by misspecification or measurement error, I leverage a large firm-level data set on the investment location decisions of thousands of multinational firms. Using nonparametric machine-learning techniques and out-of-sample tests, I show that gravity variables can help us develop very accurate expectations about firm behavior but that none of the 31 “political determinants” of FDI that I consider can do much to improve our expectations. These findings have important implications because they suggest that governments retain some room to move in the face of economic globalization.

The Distributional Consequences of Preferential Trade Liberalization: Firm-Level Evidence

2017 ◽  
Vol 71 (2) ◽  
pp. 373-395 ◽  
Author(s):  
Leonardo Baccini ◽  
Pablo M. Pinto ◽  
Stephen Weymouth
Keyword(s):  
United States ◽  
Foreign Direct Investment ◽  
International Trade ◽  
Multinational Corporations ◽  
Direct Investment ◽  
Trade Agreements ◽  
The United States ◽  
Firm Level ◽  
Preferential Trade ◽  
Distributional Consequences

AbstractWhile increasing trade and foreign direct investment, international trade agreements create winners and losers. Our paper examines the distributional consequences of preferential trade agreements (PTAs) at the firm level. We contend that PTAs expand trade among the largest and most productive multinationals by lowering preferential tariffs. We examine data covering the near universe of US foreign direct investment and disaggregated tariff data from PTAs signed by the United States. Our results indicate that US preferential tariffs increase sales to the United States from the most competitive subsidiaries of multinational corporations operating in partner countries. We also find increases in market concentration in partner countries following preferential liberalization with the United States. By demonstrating that the gains from preferential liberalization are unevenly distributed across firms, we shed new light on the firm-level, economic sources of political mobilization over international trade and investment policies.

Geopolitics, Nationalism, and Foreign Direct Investment: Perceptions of the China Threat and American Public Attitudes toward Chinese FDI

2019 ◽  
Vol 12 (4) ◽  
pp. 495-518
Author(s):  
Ka Zeng ◽  
Xiaojun Li
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Public Attitudes ◽  
The United States ◽  
Host Countries ◽  
Mediation Analyses ◽  
Rise Of China ◽  
China Threat ◽  
The Rise Of China ◽  
The Impact

Abstract The rapid increase in recent years of Chinese outbound foreign direct investment (FDI) has prompted growing scholarly interest in its economic and political implications for host countries. However, relatively little attention has been paid to how concerns over the rise of China may shape public attitudes towards such investment. This article tests the link between threat perception and preferences for FDI in the United States. We argue that, due to heightened geopolitical concerns and nationalism, perceptions of the China threat negatively affect how the American public views the impact of incoming Chinese FDI. Using a survey experiment, we show that respondents are indeed less likely to support Chinese FDI when primed with information that highlights the security and economic threats posed by China than when they receive no such priming. Furthermore, causal mediation analyses reveal that the treatment effects of security and economic threats are mediated by respondents’ concerns about the challenges that Chinese FDI poses to national security as well as to American economy.

Country-level macro-corporate governance and the outward foreign direct investment

2018 ◽  
Vol 45 (1) ◽  
pp. 107-123 ◽  
Author(s):  
Tong Tong ◽  
Tarlok Singh ◽  
Bin Li
Keyword(s):  
Corporate Governance ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
National Level ◽  
Political Stability ◽  
Outward Foreign Direct Investment ◽  
Host Countries ◽  
Data Set ◽  
Content Type ◽  
Country Level

Purpose China’s outward foreign direct investment (ODI) has become a recent phenomenon in that China is now rated as the world’s third largest country for ODI. Previous studies have found that China’s ODI is driven by the attractions of natural resources and overseas markets. Yet these studies have ignored the role of corporate governance at a national level, the paper aims to discuss these issues. Design/methodology/approach The Kaufmann et al. (1999) data set is used in our study and the data sample have covered the period from 2003 to 2012 for a comprehensive set of 171 host countries. Random effects model are applied in the paper and population average model is used to check the robustness of the results. Findings The authors find that the effects of macro-corporate governance are distinct in different sample periods, as well as in geographical and economic regions, when attracting China’s ODI. Indicators such as political stability, the absence of violence, regulatory effectiveness, regulatory quality, the rule of law and the control of corruption are found to be positively related to China’s ODI. Originality/value This is one of the first papers to investigate the relationship between macro-corporate governance indicators and China’s ODI. 171 countries are included in the data sample and sub-sample tests are also conducted.

scholarly journals Taking stock of firm-level and country-level benefits from foreign direct investment

2018 ◽  
Vol 26 (2) ◽  
pp. 126-144 ◽  
Author(s):  
Randolph L. Bruno ◽  
Nauro F. Campos ◽  
Saul Estrin
Keyword(s):  
Foreign Direct Investment ◽  
Emerging Economies ◽  
Direct Investment ◽  
Meta Analysis ◽  
Spillover Effects ◽  
Empirical Literature ◽  
Firm Level ◽  
Content Type ◽  
Country Level ◽  
Enterprise Level

Purpose This paper aims to conduct a systematic meta-analysis on emerging economies to summarize these effects and throw light on the strength and heterogeneity of these conditionalities. Design/methodology/approach This paper proposes a new methodological framework that allows country- and firm-level effects to be combined. The authors hand collected information from 175 studies and around 1,100 estimates in Eastern Europe, Asia, Latin America and Africa from 1940 to 2008. Findings The two main findings indicate that “macro” effects are much larger than enterprise-level ones, by a factor of at least six and the benefits from foreign direct investment (FDI) into emerging economies are substantially less “conditional” than commonly thought. Originality/value The empirical literature has not reached a conclusion as to whether FDI yields spillovers when the host economies are emerging. Instead, the results are often viewed as conditional. For macro studies, this means that the existence and scale of spillover effects are contingent on the levels of institutional, financial or human capital development attained by the host economies. For enterprise-level studies, conditionality relates to the type of inter-firm linkages, namely, forwards, backwards or horizontal.

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