Domestic arbitral institutions and foreign direct investment

2020 ◽  
Author(s):  
Weiwen Yin
Keyword(s):  
International Economic ◽  
Foreign Direct Investment ◽  
Dispute Resolution ◽  
Local Governments ◽  
Direct Investment ◽  
International Institutions ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
Domestic Firms ◽  
Institutional Variable

Abstract Existing literature focuses on how domestic and international institutions address investor–state disputes and attract foreign direct investment (FDI). However, contractual disputes between foreign and domestic firms are largely neglected. For foreign investors, dispute resolution mechanisms that can effectively resolve contractual disputes are very important as well. In this article, I examine the effect of institutions that conduct arbitrations for disputes between foreign and domestic firms on FDI inflows. Focusing on the within-country variation of China, I find that provinces with CIETAC (China International Economic and Trade Arbitration Commission) agencies receive a higher level of FDI. These agencies attract FDI because they can credibly signal that local governments are truly willing to treat foreign investors fairly when they have disputes with local firms. In sum, this article highlights an institutional variable that has received little attention in the literature on the politics of FDI.

scholarly journals FOREIGN DIRECT INVESTMENT IN INDIA: A TREND ANALYSIS

10.36713/3205 ◽  
2020 ◽  
pp. 57-64
Author(s):  
Rudresha C. E
Keyword(s):  
International Economic ◽  
Foreign Direct Investment ◽  
Economic Integration ◽  
Growth And Development ◽  
Direct Investment ◽  
Policy Reforms ◽  
New Economic Policy ◽  
Fdi Inflows ◽  
Indian Economy ◽  
Made In

International economic integration plays a significant role in the growth and development of any country, whether rich or poor. And foreign direct investment (FDI) is one of the major components in the process of achieving international economic integration in any economy. As is known, FDI serves as a link between investment and savings. This is true even in the case of India which is facing the deficit of savings and which can be addressed with the help of FDI. It (i.e., FDI) also helps in raising the growth and development of the economy. India is one of the leading markets at the global level. It has emerged as one of the attractive destinations in the world with a significant change in the inflow of FDI. The journey of FDI is very interesting with the introduction of liberalized policy through new economic policy 1991 and also other policy reforms of Government of India. It has witnessed a drastic change in the inflow and direction of foreign investment in Indian economy. In this backdrop, an attempt is made in this paper to examine country-wise, sector-wise and region-wise FDI inflows in Indian economy during last 19 years, 2000-01 to 2018-19. KEY WORDS: Economic Integration, Foreign Direct Investment, Developing Nations, Savings, Policy Reforms

scholarly journals DETERMINANTS OF FOREIGN DIRECT INVESTMENT IN THE VISEGRAD GROUP COUNTRIES AFTER THE EU ENLARGEMENT

2018 ◽  
Vol 24 (5) ◽  
pp. 1955-1978 ◽  
Author(s):  
Weihua Su ◽  
Dongcai Zhang ◽  
Chonghui Zhang ◽  
Josef Abrhám ◽  
Mihaela Simionescu ◽  
...  
Keyword(s):  
Foreign Direct Investment ◽  
Czech Republic ◽  
Direct Investment ◽  
Labour Force ◽  
Eu Enlargement ◽  
The European Union ◽  
Macroeconomic Factors ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
Visegrad Group

Considering the role of foreign direct investment (FDI) inflows in the sustainable development of a country, the main aim of this paper is to identify some macroeconomic factors that positively or negatively influence FDI in Visegrad group countries after the European Union (EU) enlargement in 2004. We employed two types of approaches in our analysis: i) time series and ii) panel data approach. According to the generalized ridge regressions estimated in Bayesian framework, the perceived corruption was a factor that influenced FDI in all the countries. In Poland, Czech Republic and Slovakia corruption came through as a serious obstacle for FDIs since 2005, but this was not the case for Hungary. Even if Hungary is perceived as a country with high influence, foreign investors seem no to care about this fact and are more interested in the quality of human resources and the possibility to increase exports. Our panel approach based on a panel ARDL model identified a significant relationship between FDI, corruption index and labour force with advanced education however this causality was only detected in the long run. According to the Granger causality in panel, the attraction of FDI inflows succeeded in generating changes in total tax rate, but the issues related to corruption were not reduced at an acceptable level for foreign investors in Poland, Slovakia, and the Czech Republic.

scholarly journals What worth is a BIT? Impact of BITs on FDI Inflows into India

2018 ◽  
Vol 4 (02) ◽  
Author(s):  
Anshuman Kamila ◽  
Mitali Chinara
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Best Practice ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
New Model ◽  
Indian Model Bit ◽  
The Government

Developing countries often consider foreign direct investment (FDI) as an engine to boost economic growth. Therefore they try to promote investment inflow by various means. One approach is to offer investment guarantees to foreign investors using Bilateral Investment Treaties (BITs). Following international best practice, India has signed a number of BITs to stimulate inflow of FDI. Till date, the Government of India has signed BITs with 83 countries. These BITs were largely negotiated on the basis of the Indian Model BIT of 1993. There have been recent moves that point in the direction of India fundamentally altering the text of its BITs with countries, including calling off existing BITs and approving a new model BIT. However, concerns have been raised as to the possible pernicious impact of these changes on the inflow of FDI into India. This paper investigates whether the concern is warranted at all – by asking if BITs significantly impact the inflow of FDI. It is established that BIT is indeed a veritable boost to FDI inflow, and the estimated coefficient remains significant and robust across econometric specifications. Therefore, a note of caution is sounded for the rejigging exercise involving BITs that has been initiated by India.

Introduction

2020 ◽  
Author(s):  
Rubins Noah ◽  
Papanastasiou Thomas-Nektarios ◽  
Kinsella N Stephan
Keyword(s):  
International Economic ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Political Risk ◽  
International Economic Order ◽  
Equal Treatment ◽  
Economic Rights ◽  
Foreign Investors ◽  
Changing Attitudes

This introductory chapter provides an overview of the book’s main themes. It begins with a discussion of the concept of foreign direct investment (FDI). It then details the emergence of a New International Economic Order movement, in which a large number of States initiated a campaign against the prevailing norms of equal treatment for foreign investors, culminating in a U.N. resolution known as the Charter for Economic Rights and Duties of States. It also describes developing States’ changing attitudes toward FDI. Among the questions addressed by this are: What can an investor do to deter manifestations of political risk once the investment has been made? How can international law be brought to bear as protection against political risk? What remedies are available if political risk materializes to the investors’ detriment?

scholarly journals Measuring the inward FDI potential of South African regions

2008 ◽  
Vol 8 (1) ◽  
Author(s):  
W. Krugell ◽  
M. Matthee
Keyword(s):  
South Africa ◽  
Foreign Direct Investment ◽  
South African ◽  
Foreign Investment ◽  
Local Governments ◽  
Direct Investment ◽  
Potential Contribution ◽  
Skills Transfer ◽  
Foreign Investors ◽  
Investment Promotion

Purpose: The purpose of this paper is to construct an index that captures the factors expected to affect a local economy's attractiveness to foreign investors. Problem statement: Following South Africa's reintegration into the world economy in 1994, foreign direct investment has been seen as a potential driver of growth and development. Concerns about the low investment rate in South Africa raise the possibility of augmenting domestic with foreign investment expenditure. The potential of technology spillovers and skills transfer from foreign direct investment have also been emphasised. As a result, Trade and Investment South Africa is involved in identifying, packaging and promoting investment opportunities. However, investments tend to be place-specific and this has lead to the decentralisation of foreign direct investment promotion. Currently the nine provincial development agencies are competing to attract investors and the larger local governments are also getting involved in the fray. This paper argues that some places have better potential to attract foreign investment than others. A first step to use scarce investment promotion resources more efficiently would be to measure the inward FDI potential of South African regions. Approach: This paper uses principal components analysis to construct an index that captures the factors expected to affect a local economy's attractiveness to foreign investors. This approach draws on UNCTAD's Inward FDI Potential Index and applies it to 354 magisterial districts in South Africa for the periods 1996, 2001 and 2006. The index creates a summary measure of FDI potential.Findings: The results show that different places present differential potential in urbanization and localization economies and market size. The high-potential locations are typically found in or around the major agglomerations, but there are a few smaller places on the periphery that offer FDI potential. Contribution: The index should aid the location decisions of prospective investors as well as local policymakers in their efforts to promote FDI-led economic development. Conclusion: The places with high FDI potential are not randomly scattered across South Africa, but tend to cluster together. Cities and towns can improve their attractiveness to foreign investors through the exploitation of natural resources, population growth, economic growth and strengthening links to metropolitan areas.

Reversal of Fortunes: Democratic Institutions and Foreign Direct Investment Inflows to Developing Countries

2003 ◽  
Vol 57 (1) ◽  
pp. 175-211 ◽  
Author(s):  
Quan Li ◽  
Adam Resnick
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Property Rights ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Democratic Institutions ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
Rights Protection ◽  
Property Rights Protection

Does increased democracy promote or jeopardize foreign direct investment (FDI) inflows to less-developed countries? We argue that democratic institutions have conflicting effects on FDI inflows. On the one hand, democratic institutions hinder FDI inflows by limiting the oligopolistic or monopolistic behaviors of multinational enterprises, facilitating indigenous businesses' pursuit of protection from foreign capital, and constraining host governments' ability to offer generous financial and fiscal incentives to foreign investors. On the other hand, democratic institutions promote FDI inflows because they tend to ensure more credible property rights protection, reducing risks and transaction costs for foreign investors. Hence, the net effect of democracy on FDI inflows is contingent on the relative strength of these two competing forces. Our argument reconciles conflicting theoretical expectations in the existing literature. Empirical analyses of fifty-three developing countries from 1982 to 1995 substantiate our claims. We find that both property rights protection and democracy-related property rights protection encourage FDI inflows; after controlling for their positive effect through property rights protection, democratic institutions reduce FDI inflows. These results are robust against alternative model specifications, statistical estimators, and variable measurements.

Brazil, BITs and FDI: A Synthetic Control Approach

2019 ◽  
Vol 20 (1) ◽  
pp. 68-97
Author(s):  
Paulo Cavallo
Keyword(s):  
Foreign Direct Investment ◽  
Comparative Analysis ◽  
Direct Investment ◽  
Control Method ◽  
Synthetic Control ◽  
Synthetic Control Method ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
Control Approach ◽  
Peculiar Case

Abstract The explosion in bilateral investment treaties (BITs) signed between countries in the 1990s and the concurrent surge in foreign direct investment (FDI) flows draw substantial attention in the literature. This article tackles the controversial relationship between BITs and FDI inflows using an innovative technique: the synthetic control method. Brazil is a peculiar case because it is one of the few cases where FDI inflows had a significant surge even in the complete absence of BITs. Did foreign investors really not need BITs in order to invest in Brazil? I find evidence that, although Brazil received substantial amounts of FDI even in the absence of BITs, had they enacted any BIT, the inflow in the period would have been greater. The method builds a synthetic Brazil from a pool of other countries providing this way a better comparative analysis. The findings are robust to both in-space and in-time placebo experiments.

Does Corruption Affect Foreign Direct Investment (FDI) Inflows in SADC Countries?

2020 ◽  
Vol 5 (2) ◽  
pp. 166-174
Author(s):  
Moses Garai Chamisa
Keyword(s):  
Foreign Direct Investment ◽  
Panel Data ◽  
Random Effects ◽  
Direct Investment ◽  
Economic Transformation ◽  
Random Effects Model ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
The Impact

Foreign Direct Investment (FDI) is a crucial factor to development in SADC, while at the same time corruption continues to be an obstacle to economic transformation in these countries. Empirically, studies provide controversial results on the effect of corruption on FDI. Some studies conclude that corruption negatively impacts FDI inflows in a country, while others provide evidence that corruption can act as a ‘helping hand’ to FDI inflows in a country. Given this ambiguity in the results of previous studies, using panel data for the period 2000-2016 for 15 SADC countries, this study examines the impact of corruption on FDI inflows in these countries. Lack of attention in previous studies on the impact of corruption on FDI inflows in SADC motivated this research. Estimation results using robust random effects model show that when corruption is widespread in a country, foreign investors are reluctant to invest. Thus, corruption negatively affects FDI inflows in SADC countries. The study recommends that SADC countries should develop and implement efficient, effective and strong anti-corruption measures to reduce corruption and hence increase FDI inflows.

The impact of FDI on setting and implementation of strategic priorities for regional development

2018 ◽  
Vol 11 (4) ◽  
pp. 152-160
Author(s):  
A. V. Tedeyeva
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
Economic Relations ◽  
Investment Projects ◽  
Manufacturing Enterprises ◽  
Analysis Of Dynamics ◽  
Business Entities ◽  
The Impact

The subject of study is foreign direct investment (FDI) being a source for attracting both financial resources to implement investment projects in certain regions and improved production technologies, quality management systems, established sales markets, etc. The purpose of the work is to estimate the relationship between the growth in intensity of FDI inflows into the region’s economy and the increased potential for implementation of regional strategic development priorities. Thus, the growth in dynamics of accumulated foreign direct investment in the region may serve as an indicator of efficient economic strategy aimed at increased investment attractiveness, improved technologies, and broader integration into international economic relations. The article notes that FDI influences setting of strategic priorities designed to achieve desired results. The paper concludes that regions seeking to increase foreign investors’ activity should develop strategic documents that stipulate priorities and ensure the coherence of interests and values between foreign investors and regional business entities. Results: the article presents an analysis of dynamics in FDI inflows into the economy of Russian regions, their sources and sectoral allocation structure. Conclusions are drawn about the FDI effectiveness for financing strategic projects in various regions of the country. Also, the study identifies regions that consistently implement the set priorities and successfully attract FDI to develop manufacturing enterprises.

scholarly journals THE IMPACTS OF CORRUPTION ON ATTRACTING FOREIGN DIRECT INVESTMENT

2020 ◽  
Vol 4 ◽  
pp. 10-14
Author(s):  
Najibullah Zaki
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Financial Resources ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
Long Period ◽  
Different Types ◽  
Sustainable Economic Growth ◽  
Growth Economic

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.

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