Does regionalism matter? Local politics and foreign direct investment in South Korea

2019 ◽  
Vol 8 (3) ◽  
pp. 295-306
Author(s):  
Dong-Hun Kim ◽  
Sunwoo Paek
Keyword(s):  
Foreign Direct Investment ◽  
South Korea ◽  
Foreign Investment ◽  
Direct Investment ◽  
Design Methodology ◽  
Local Politics ◽  
Political Stability ◽  
Foreign Investments ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to examine how political/authoritarian regionalism affects foreign direct investment (FDI) in sub-national states in South Korea. Design/methodology/approach This paper employs statistical analysis to examine the relationship between regionalism and FDI, along with historical description of regionalism in South Korea. Findings The analyses suggest that not only authoritarian regionalism influence foreign investment to the region but also political regionalism matters. Sub-national states with higher authoritarian regionalism receive less foreign investment while sub-national states with high political regionalism, which imply political stability, receive more FDI than others. Originality/value The paper examined how local politics influence foreign investments in South Korea, and suggests stronger decentralization will positively influence FDI in the future.

MNEs, FDI, inequality and growth

2019 ◽  
Vol 27 (3) ◽  
pp. 217-220 ◽  
Author(s):  
Jonathan P. Doh
Keyword(s):  
Foreign Direct Investment ◽  
International Business ◽  
Direct Investment ◽  
Design Methodology ◽  
Negative Impact ◽  
Positive Impact ◽  
Negative Relationship ◽  
Content Type ◽  
Relationship Of ◽  
The Relationship

Purpose The relationship among foreign direct investment, multinationals, inequality and growth is a vexing one that has occupied considerable scholarly and practical attention for many decades. To date, international business scholars have not fully concerned themselves with this issue (Buckley, Doh and Benischke, 2017, for an exception). This paper aims to briefly review this literature and report some of the insights of this work. The author draws from and integrates this literature, concluding that multinationals and the foreign investment that emanate from them have a generally positive impact on growth and a generally negative impact on income and wealth equality. The author then details some of the potential contributions MNEs can make to attenuate the negative relationship of foreign direct investment (FDI) on equality, concluding that governments and their policies are the primary vehicle for addressing wealth and income inequality. Design/methodology/approach This paper is an essay. Findings The relationship between inequality, growth and FDI is complex. On balance, FDI contributes to growth but may exacerbate inequality under some conditions. More research needs to be conducted, and policymakers need to carefully consider these nuanced relationships. Originality/value The paper provides review of the relationship of FDI, growth and inequality.

Does foreign direct investment influence R&D activity in the host country? Evidence from Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Van Ha ◽  
Mark J. Holmes ◽  
Gazi Hassan
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Probit Model ◽  
Innovation Activity ◽  
Heckman Selection Model ◽  
Content Type ◽  
Domestic Firms ◽  
The Impact ◽  
Local Firms

PurposeThis study focuses on the linkages between foreign direct investment and the research and development (R&D) and innovation activity of domestic enterprises in Vietnam.Design/methodology/approachThe Heckman selection model approach is applied to a panel dataset of nearly 7,000 Vietnamese firms for the 2011–2015 study period to investigate the impact of foreign presence on the R&D of local firms through horizontal and vertical linkages. Probit model estimation is employed to examine how foreign investment influences the innovation activity of local companies.FindingsWhile there are a small number of firms carrying out R&D activities in Vietnam, foreign or joint domestic–foreign venture firms are less inclined than domestic firms to undertake R&D. Domestic factors that include capital, labor quality, location and export status of firm have a significant effect on the decision of domestic firms to participate in R&D activity. Only forward linkages and the gross firm output are found to have an impact on the R&D intensity of domestic enterprises, while other factors appear to have no significant influence on how much firms spend on R&D activities.Practical implicationsIn order to promote the R&D activity of domestic firms, policy should focus on (1) the backward linkages between local firms in downstream sectors with their foreign suppliers in upstream sectors, and (2) the internal factors such as labor, capital or location that affect the decisions made by domestic firms.Originality/valueGiven that foreign investment may affect R&D and innovation activity of local firms in host countries, the impact is relatively unexplored for many emerging economies and not so in the case of Vietnam. The availability of a unique survey on Vietnamese firm technology and competitiveness provides the opportunity to address this gap in the literature.

The determinants of foreign direct investment: what about the potential of the Arab Maghreb countries?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hamdi Khalfaoui ◽  
Abdelkader Derbali
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Political Stability ◽  
The United States ◽  
Investment Risk ◽  
Content Type ◽  
Foreign Companies ◽  
Main Determinants ◽  
General Method Of Moments

Purpose The purpose of this paper is to elucidate the main determinants of foreign direct investment (FDI) in the case of the Arab Maghreb countries. Design/methodology/approach We employ a dynamic panel analysis using the General Method of Moments for a sample composed of 105 countries over the period 1985–2018. Findings We show that FDI stability, market size, higher education enrolment, quality of institutions, distance, sharing of common border, and bilateral investment and integration agreements are the main determinants of FDI location. These determinants are neither general. The potential for attracting FDI from AMU countries is poorly exploited. FDI to the AMU is lower than estimated stock. The observed FDI to potential FDI ratio does not exceed 87%. France and Spain are the main investors in the AMU region thanks to historical and cultural links. The FDI from the United States, Canada, Germany, Belgium, and Japan are below what is expected. Originality/value The contribution of this paper is observed on the examining oh the determinants of the FDI in the Arab Maghreb countries. Our study demonstrate that the political stability can decrease investment risk in these countries. The administrations correspondingly require expanding their rules and strategies with union demonstrations which were at the beginning of the departure and closing of several foreign companies.

The legal guarantees to protect foreign investment in Jordan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohamad Ali Helalat
Keyword(s):  
Host Country ◽  
Foreign Investment ◽  
Design Methodology ◽  
Foreign Investor ◽  
Foreign Investments ◽  
Content Type ◽  
Legal Principles ◽  
Bilateral Agreements ◽  
The Status ◽  
Investment System

Purpose This paper aims to indicate that the foreign investment system in Jordan includes many provisions that create an appropriate environment for encouraging foreign investments and grant a distinctive treatment for the foreign investor that allows them the status equal to the national investor. Design/methodology/approach This study deals with the protection provided by the Jordan Government for foreign investments to attract foreign investment by studying the guarantees given by Jordan including many legal principles that encourage investment. The legal guarantees for the foreign investor enhance the confidence of the foreign investor in the host country. Findings The system provides a lot of guarantees with respect to non-commercial risks to which the foreign investor may be exposed. Originality/value The paper also clarifies that the role played by bilateral agreements in the field of investments, as these agreements give foreign investments a measure of protection through the guarantees and they are considered as incentives for the investor.

scholarly journals Foreign direct investment and institutional stability: who drives whom?

2019 ◽  
Vol 24 (47) ◽  
pp. 145-156 ◽  
Author(s):  
Nihal Mahmood ◽  
Mohammad Hassan Shakil ◽  
Ishaq Mustapha Akinlaso ◽  
Mashiyat Tasnia
Keyword(s):  
Foreign Direct Investment ◽  
Financial Stability ◽  
Direct Investment ◽  
Global Financial Crisis ◽  
Institutional Development ◽  
Optimal Level ◽  
Empirical Literature ◽  
Content Type ◽  
Institutional Stability ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between foreign direct investment (FDI) flows and institutional stability. The focus country is Canada. It is one of the few countries where the economy remained relatively stable compared to other economies during the Global Financial Crisis. It is crucial for Canada to determine the optimal level of institutional development to attract more FDI and sustain the sound financial stability in future. Design/methodology/approach This study uses the auto-regressive distributive lag (ARDL) approach to understand the relationship between FDI and institutional stability along with other controlled variables, for instance, gross national product, inflation and exports. Findings The key finding of this work is that FDI and institutional stability are cointegrated in the long run. The error correction model of ARDL shed light on institutional stability being an exogenous variable, and FDI is an endogenous variable. Institutional stability affects FDI, as it is exogenous. The findings will help policymakers to implement policies to strengthen the institution’s settings, and this, in turn, will attract more investment. Originality/value Based on previous theoretical and empirical literature, most of the research points to FDI positively affect institutional stability. In some cases, the relationship does not always hold true. This study will fix the gap in the literature by investigating the relationship between FDI and institutional stability of Canada.

scholarly journals The long run relationship between fish production, marine trade balance and foreign direct investment

2020 ◽  
Vol 5 (3) ◽  
pp. 271-280
Author(s):  
Naseem H. Jamei ◽  
Mira Nurmakhanova ◽  
Shahbaz Mustafa ◽  
Alloysius Egbulonu ◽  
Wagdi Hadidan
Keyword(s):  
Foreign Direct Investment ◽  
Trade Balance ◽  
Direct Investment ◽  
Design Methodology ◽  
Fish Production ◽  
Content Type ◽  
Gulf Countries ◽  
Long Run ◽  
Short Run ◽  
The Impact

Purpose This paper aims to focus on testing the long-run relationship between fish production and two main variables, the foreign direct investment inflow and the marine trade balance in Oman, which is one of the Arab Gulf countries, during the period 1985-2016. Design/methodology/approach This study uses what known as the two-step Engle–Granger cointegration test to give evidence for the long-run relationship among the variables. Findings The results show that there are a negative long- and short-run relations between fish production and marine trade balance; moreover, any shocks will be corrected within two periods at the most.  Originality/value This study is one of few studies in using the econometric models to study the impact of fish production on marine trade balance and foreign direct investment.

Chinese outward foreign direct investment

2018 ◽  
Vol 34 (4) ◽  
pp. 10-12
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Design Methodology ◽  
Reading Time ◽  
Outward Foreign Direct Investment ◽  
Foreign Markets ◽  
Content Type ◽  
Pertinent Information ◽  
Strategic Motives ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings This briefing looks at the strategic motives behind Chinese firms when looking to expand globally and create subsidiaries in foreign markets. Originality/value The briefing saves busy executives, strategists, and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Fading FDI faces increasing challenges in Chile

2016 ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Food Industry ◽  
Public Infrastructure ◽  
Sharp Drop ◽  
Content Type ◽  
Investment Promotion ◽  
The Government

Subject The fall in foreign investment last year. Significance The government has launched a new Foreign Investment Promotion Agency (APIE) to buck a sharp drop in foreign direct investment (FDI) last year. Breaking with the country's long-standing sector-agnostic approach, the agency will seek to attract investment to specific sectors, including energy, public infrastructure and the food industry. Impacts A more business-friendly administration in Argentina could potentially divert FDI from Chile. Critics of the new FDI regulation maintain that it will dampen inflows. Efforts to attract investment in food and mining services represent a bid to diversify from mineral exports.

scholarly journals Foreign direct investment and the SME sector

2015 ◽  
Vol 21 (1) ◽  
pp. 50-75 ◽  
Author(s):  
Piers Thompson ◽  
Wenyu Zang
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Firm ◽  
Local Level ◽  
Economic Conditions ◽  
Local Economies ◽  
Content Type ◽  
Foreign Influence ◽  
The 2008 Financial Crisis ◽  
The Relationship

Purpose – Although foreign direct investment and entrepreneurship are potential routes to recovery (Girma and Wakelin, 2001; Lyon et al., 2002), existing literature is divided on the relationship between the two. The purpose of this paper is to examine the influence of foreign investment on the local SME sector after the 2008 financial crisis. Design/methodology/approach – Local authority district data from Great Britain is used to examine the influence of foreign firm employment on the size of the local SME sector as a proportion of all firms, and foreign firm influence on firm births in the locality. In order to control for local geographical, infrastructural and economic conditions regression analysis is used to examine the relationship between foreign business employment and indigenous business activities. Findings – The potential for technological spillovers and spinout activities appears to dominate with firm birth rates higher where there is greater foreign firm employment. However, there is also evidence of crowding out in relation to the existing SME sector, which is found to be reduced in size where foreign influence through employment is greater. Research limitations/implications – The results here indicating a complementarity relationship between foreign influence on employment and firm births is important for policy makers looking to revive struggling local economies. However, the relevant support needs to be in place to maximise the benefit from the supply of new entrepreneurs generated. Originality/value – Unlike many other studies the relationship between the SME sector, firm births and foreign influence is considered at a local level and where economic conditions are more uncertain and economic recovery is less taken for granted. A better understanding of the relationship allows more appropriate policy to be developed in order to aid local economies to recover.

scholarly journals Ways of attracting foreign direct investment in the Ukrainian economy

2021 ◽  
pp. 168-173
Author(s):  
Yuliia Horodnichenko
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
New Technologies ◽  
Synthesis Method ◽  
The State ◽  
Local Market ◽  
Foreign Investments ◽  
Foreign Experience ◽  
Study Results

Subject of research is the directions and ways of attracting foreign direct investment in Ukraine. The purpose of the article is to study the essence and features of foreign direct investment and to study the foreign experience of ways to attract direct investment to Ukraine. Methods used in the research process: method of system-structural analysis and synthesis, method of comparative analysis, generalization, general scientific, special methods of scientific knowledge and other research methods. Study results. The importance of foreign investments in the activity and development of the state is described. The main measures that need to be implemented to attract foreign investment are identified. International investment cooperation, given the high level of its efficiency, provides the country and its businesses with a number of current and future benefits. Positive and negative factors influencing the attraction of foreign investments into the state economy are outlined. One of the most common ways to attract direct investment to Ukraine is to create joint ventures, which are manifested in the processes of cooperation, pooling of knowledge, efforts, resources and experience. Motivational levers of influence on direct investment partners are singled out. They can be divided into two large groups. In the first case, firms are mainly engaged in the sale of goods and services produced in other countries, in the second - invest in the creation of production facilities in this country in order to sell products in the local market or export it to markets in other countries. Application of results. The results of the study can be used in the activities of the Ministry of Finance of Ukraine, the Verkhovna Rada of Ukraine, the National Commission on Securities and Stock Market, as well as in higher education institutions in the teaching of economic disciplines. Conclusions. Foreign investment plays an important role in the development of the country's economy. Attracting funds from foreign investors contributes to the intensification of the investment process, the introduction of new technologies, the use of advanced foreign experience, the development of small and medium-sized businesses, the growth of investment potential of the territories.

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