Part II Economic Regulation, 6 Liberalization and Promotion of Inward Investment

2021 ◽  
Author(s):  
Muchlinski Peter T
Keyword(s):  
Direct Investment ◽  
Global Economy ◽  
Multinational Enterprises ◽  
Economic Regulation ◽  
Investment Incentives ◽  
Host State ◽  
Economic Organizations ◽  
Positive Gain ◽  
International Distribution ◽  
Geographical Space

This chapter focuses on policies of investment liberalization and promotion, both at the host state and at the bilateral, regional and multilateral levels. In all cases, the aim has been to remove barriers to inward foreign direct investment (FDI) in the belief that this will offer positive economic gains to states and to the global economy. However, the removal of host state controls cannot automatically guarantee adequate levels, or useful kinds, of inward investment. Nor will it guarantee an equitable international distribution of its benefits. Moreover, competition over investment incentives between states may create economic distortions between them, with little positive gain. The reduction of barriers to direct investment, and the use of investment incentives, stand to benefit multinational enterprises (MNEs), as they can establish operations over a wider geographical space and can enjoy reduced investment risks. Against this background, the major home states of MNEs have placed the reduction of barriers to FDI onto the agendas of regional and multilateral economic organizations, with some success.

scholarly journals FOREIGN DIRECT INVESTMENT TRENDS

2020 ◽  
Vol 18 (2) ◽  
Author(s):  
Vlatka Bilas
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Global Value Chains ◽  
Value Chains ◽  
Investment Policies ◽  
Technological Advances ◽  
Innovation And Technology

The beginning of this century is characterized by deepening globalization and one of the main features of this process is global foreign direct investment flows. The relevance of foreign direct investment as a source of economic growth is inevitable and it has sound theoretical foundation. Despite this fact, many forces shaping the global economy receive a significant amount of attention, but foreign direct investment is often overlooked. Technological progress, trade and foreign direct investment are interrelated. Namely, foreign direct investment has greatly accelerated the spread of innovation and technology, while the technological advances especially in the era of Industry 4.0 have been driving the dynamics of foreign direct investment. Due to expected positive impacts, many countries are continuing policy efforts aimed at attracting foreign direct investment. However, foreign direct investment is experiencing new trends. Over the last few decades the global map of inward and outward foreign direct investment has changed significantly. There are new players with increasing roles in the global foreign direct investment area which are reshaping the world economy. Global foreign direct investment is undergoing a shift as emerging markets countries both inflows and outflows rise dramatically. For example, China’s outbound foreign direct investment has been growing dramatically in recent years, and impacted significant shifts in the global economy. Motives for foreign direct investment, as well as the type are changing due to globalization and new trends, especially high liberalization of trade. The proliferation of global value chains also influenced foreign direct investment trends. One of the examples is necessity of rethinking the framework on motives of foreign direct investment when analyzing emerging market multinational enterprises and their interdependent relationships within global value chains. The contribution of the paper is three-fold. Firstly, the paper gives an overview of key global and regional foreign direct investment trends. Secondly, key factors, as well as potential impacts of these changes are explored. Thirdly, paper offers recommendations for new investment policies.

Part I The Conceptual Framework, 1 Getting to Know Multinationals

2021 ◽  
Author(s):  
Muchlinski Peter T
Keyword(s):  
Direct Investment ◽  
Global Economy ◽  
Multinational Enterprises ◽  
Business Associations ◽  
World War ◽  
Contemporary World ◽  
Business Association ◽  
The First World War ◽  
Great Crash ◽  
Second World

This chapter provides an overview of multinational enterprises (MNEs), which are the most talked-about business associations in the contemporary world economy. The MNE is a business association that engages in direct investment outside its home country; that is, in foreign direct investment (FDI). The chapter traces the patterns of MNE growth over time and space. The evolution of modern MNEs has usually been divided into historical periods, interrupted by the First and Second World Wars. The ‘first global economy’ emerged during the second half of the nineteenth century and began to disintegrate with the outbreak of the First World War in 1914, finally collapsing with the Great Crash of 1929. The ‘second global economy’ originated in the post-Second World War era and gathered pace between the 1980s and into the first decade of the twenty-first century. The chapter then looks at the main explanations of MNE growth, and the role of legal factors in this process.

Outward Foreign Direct Investment from India: A Comparative Analysis

2020 ◽  
pp. 355-362
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Comparative Analysis ◽  
Direct Investment ◽  
Global Economy ◽  
Multinational Enterprises ◽  
Series Data ◽  
Outward Foreign Direct Investment ◽  
Outward Fdi ◽  
Data Set

The outward foreign direct investment (OFDI) is an important vehicle through which the multinational enterprises (MNEs) expand their global business. Before the initiation of the liberalisation measures, India was more of a recipient than a contributor of foreign direct investment in the global economy. led to an astounding The ongoing liberalisation measures embarked in 1991 growth of outward FDI in India. This study performed a comparative analysis of the outward FDI from India during the post-liberalisation period (1992 to 2018) using a time series data set collected from the UNCTAD. The analysis revealed that the outward FDI from India was increasing faster than the inward FDI, both in terms of FDI stock as well as FDI flows, in the post-liberalisation period. At the same time, growth of outward FDI from India was much faster than that from the developing countries and from the world; therefore, the share of India in the global outward FDI and in the outward FDI from developing countries has been steadily increasing. This reflected the growing presence of Indian multinational enterprises (MNEs) in the global economy in the post-liberalisation period.

The Oxford Handbook of the Brazilian Economy

2018 ◽  
Keyword(s):  
Direct Investment ◽  
Global Economy ◽  
Iron Ore ◽  
Structural Features ◽  
Economic Importance ◽  
Closed Economy ◽  
Current Characteristics ◽  
Insight Into ◽  
Contemporary Context ◽  
Over Time

Brazil constitutes a globally vital but troubled economy. It accounts for the largest GDP in Latin America and ranks among the world’s largest exporters of critical commodities including iron ore, soya, coffee, and beef. In recent years Brazil’s global economic importance has been magnified by a surge in both outward and inward foreign direct investment. This has served to further internationalize what has been historically a relatively closed economy. The purpose of this Handbook is to offer real insight into the Brazil’s economic development in contemporary context, understanding its most salient characteristics and analyzing its structural features across various dimensions. At a more granular level, this volume accomplishes the following tasks. First, it provides an understanding of the economy’s evolution over time and the connection of its current characteristics to this evolution. Second, it analyzes Brazil’s broader place in the global economy, and considers the ways in which this role has changed, and is likely to change, over coming years. Third, reflecting contemporary concerns, the volume offers an understanding, not only of how one of the world’s key economies has developed and transformed itself, but also of the ways in which this process has yet to be completed. The volume thus analyzes the current challenges facing the Brazilian economy and the kinds of issues that need to be tackled for these to be addressed.

Economic Actors' Lobbying Influence on the Prospects for War and Peace

2013 ◽  
Vol 67 (4) ◽  
pp. 863-888 ◽  
Author(s):  
Stephen G. Brooks
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
Economic Globalization ◽  
Economic Incentives ◽  
Special Interests ◽  
War And Peace ◽  
The Past ◽  
The Government

AbstractPolitical scientists and economists have long been interested in the role of special interests in the policymaking process. In the past few years, a series of important new books have argued forcefully that the lobbying activities of economic actors have an important influence on the prospects for war and peace. All of these analyses claim that whether economic actors enhance or decrease the likelihood of conflict ultimately depends on the domestic political balance between economic actors who have a strong vested interest in pushing for peace versus those that do not. I advance two contrary arguments. At least among the advanced states, I posit there are no longer any economic actors who will be favorable toward war and who will lobby the government with this preference. All of the identified mechanisms that previously contributed to such lobbying in these states have been swept away with the end of colonialism and the rise of economic globalization. In particular, I show that the current structure of the global economy now makes it feasible for foreign direct investment to serve as an effective substitute for conquest in a way that was not possible in previous eras. My second argument concerns those economic actors in advanced states with a preference for peace. I posit that it has become unnecessary for them to directly lobby the government to avoid war on economic grounds because economic globalization—the accumulation of decisions by economic actors throughout the globe—now has sufficiently clear economic incentives for leaders.

scholarly journals Technology-sourcing investment abroad as an enhancer of Chinese MNEs’ innovative capabilities

2015 ◽  
Vol 10 (2) ◽  
pp. 243-271 ◽  
Author(s):  
Philippe Gugler ◽  
Laura Vanoli
Keyword(s):  
Foreign Direct Investment ◽  
Citation Analysis ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Knowledge Diffusion ◽  
Technological Capabilities ◽  
Content Type ◽  
Chinese Mnes ◽  
Firm Knowledge ◽  
Innovative Capabilities

Purpose – The purpose of this paper is to focus on Chinese firms’ innovation processes that are induced by foreign direct investment abroad. The study uses a patent and citation analysis to examine the extent to which investments abroad contribute to enhancing these firms’ innovative capabilities. More specifically, this study focusses on the role of foreign location competitiveness as an asset to provide technological capabilities to Chinese affiliates. Design/methodology/approach – Patents are good indicators of firms’ innovative capabilities. Moreover, patents allow to track the inter-firm knowledge transfer through the citations of patents on which they are based. The authors use an OECD patent database called “OECD REGPAT July 2013” that compiles patents registered with the European Patent Office (EPO) over the period from 1986 to 2013. The authors focus the analysis on patents registered by Chinese multinational enterprises’ (MNEs) based in Europe because the authors assume inter alia that innovations patented by Chinese affiliates in Europe are registered with the EPO. The sample comprises 3,010 patents involving 5,749 citations that the authors have individually examined. Findings – The findings suggest that Chinese MNEs ability to generate innovation based on their own knowledge is low, with a self-citation rate of approximately 4 percent. Patents by Chinese MNEs are largely based on foreign patents, especially from developed economies (at least 90 percent). The citation analysis also suggests that 39.2 percent of citations represent domestic firms in the local recipient country. This subgroup of citations is categorized as follows: 1.04 percent are M&A linkages, 13.8 percent are cluster linkages, and 24.36 percent are localization linkages. The remaining 60.8 percent of the total sample demonstrates that firms do not necessarily need to be collocated in foreign locations with domestic firms to exchange assets. Research limitations/implications – Patent and citation analysis considers only a part of the inter-firm knowledge diffusion. Some innovations are not patented and tacit knowledge diffusion is not observable. Moreover, the analysis focusses only on Chinese outward foreign direct investment to Europe, but a large part of knowledge is accumulated in China thanks to inward foreign direct investment. Originality/value – Many scholars have scrutinized emerging markets multinational enterprises’ strategic asset-seeking investments abroad that are designed to upgrade the companies’ technological capabilities (Cui and Jiang, 2009; Zhang and Filippov, 2009; Huang and Wang, 2013; Amighini et al., 2014; De Beule et al., 2014; Nicolas, 2014). However, few studies analyze the results of these strategies in terms of innovation output.

DETERMINAN PENANAMAN MODAL ASING LANGSUNG DI ASEAN

2012 ◽  
Vol 7 (1) ◽  
pp. 75
Author(s):  
Joko Susanto
Keyword(s):  
Foreign Direct Investment ◽  
Panel Data ◽  
Data Model ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Statistical Data ◽  
Regression Equation ◽  
Panel Data Model ◽  
Market Size ◽  
Research Analysis

This research analysis the factors’ that determine the foreign directinvestment (FDI) in ASEAN’s countries especially Indonesia, Malaysia, Philippine and Thailand during 1990-2009. Multinational Enterprises’ (MNE) must decideto choose a locationfor relocating its’ factory by market seeking dan resources seeking strategy. Based on this statement, it can be obtained the regression equation with foreign direct investment is a function of market size, worker’s productivity and infrastructure of road. Statistical data of UNESCAP was used in this research. The regression was base on the panel data model, while the estimation was based on common effects model. This results showthat the market size, worker’s productivity and availability of infrastructure road could be an importance consideration for MNE’s in their choice for FDI.Keywords: foreign direct investment, market size, worker’s productivity, infrastructure of road

The Rise of Transnational Corporations from Developing Countries in the Second Half of the 20th Century

Istoriya ◽  
2021 ◽  
Vol 12 (11 (109)) ◽  
pp. 0
Author(s):  
Alexey Kuznetsov
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Economy ◽  
World Order ◽  
Developed Countries ◽  
Global South ◽  
Business Environment ◽  
Outward Foreign Direct Investment ◽  
Foreign Direct Investment Stock

The article highlights three stages of the formation of multinationals from developing countries. Although first Argentine TNCs appeared at the turn of the 19th — 20th centuries, in the majority of the Global South countries TNCs appeared in the 1960s — 1980s. With the collapse of the bipolar world order, which in many developing countries was accompanied by significant internal political and economic transformations, the second stage of foreign expansion of TNCs from the Global South began. Indeed, in 1990 they accounted for 6 % of global outward foreign direct investment stock, while the figure was 10 % by the end of 2005. We date the beginning of the third stage to the financial and economic crisis of 2007—2009, since multinationals from developing countries as a whole are more successfully overcoming the period of turbulence in the global economy. By the end of 2020, they accounted for 22 % of global outward foreign direct investment stock, and during the COVID-19 pandemic crisis they generally exported more than 50% of the capital. The modern foreign expansion of such TNCs has many reasons, differs greatly from country to country, and often differs slightly from the specifics of Western multinationals. At the same time, initially, “late internationalization” in developing countries had two main vectors — the use of new opportunities for South — South cooperation and overcoming, through the creation of subsidiaries in highly developed countries, the shortcomings of the business environment of “catching up” countries.

scholarly journals Vertical spillovers from multinational enterprises: Does technological gap matter?

2016 ◽  
Vol 63 (3) ◽  
pp. 313-323 ◽  
Author(s):  
Rosanna Pittiglio ◽  
Filippo Reganati ◽  
Edgardo Sica
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Manufacturing Sector ◽  
Spillover Effect ◽  
Empirical Literature ◽  
Foreign Investors ◽  
Technological Gap ◽  
Local Companies ◽  
The Relationship

Foreign direct investment (FDI) from Multinational enterprises (MNEs) can augment the productivity of domestic firms insofar as knowledge ?spills over? from foreign investors to local producers. The capacity of local companies to exploit knowledge from MNEs can be affected by the technology gap between foreign and local enterprises at both horizontal (in the same industry) and vertical (in different industries) level. Whereas most of the empirical literature has focused exclusively on the analysis of horizontal and backward spillovers (i.e. between MNEs and local suppliers), the present paper also examines the relationship between FDI-related spillovers and technological gap in the Italian manufacturing sector at forward level (i.e. between MNEs and local buyers). Results suggest that at both intra-industry and forward level, the technological gap is of considerable importance for the spillover effect, particularly in the case of low-medium gap.

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