scholarly journals The motives for Japanese foreign direct investment in the Southeastern United States

2019 ◽  
Vol 11 (4) ◽  
pp. 324-338
Author(s):  
Remy Magnier-Watanabe ◽  
James Hoadley
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
National Level ◽  
State Level ◽  
Industrial Clusters ◽  
Southeastern Usa ◽  
Content Type ◽  
The Usa ◽  
Japanese Fdi ◽  
Japanese Companies

Purpose Whereas the USA is still the largest investment destination for Japanese companies, Japan also accounts as the second largest source of investment in the country. The purpose of this paper is to, empirically, examine the detailed motives of Japanese affiliates when investing in the Southeastern USA, adding to previous research at the national level. Design/methodology/approach This paper uses a qualitative approach based on the interviews of long-term Japanese investors in the manufacturing and wholesale trade industries in the Southeastern USA and applies text analysis to identify their motives. Findings The results show that Japanese firms engage in market- and efficiency-seeking foreign direct investment (FDI), and still apply a classic sequence of gradual and incremental market commitments. Market size and growth rate, reducing transaction or transportation costs, and integration within local value chains are the most important to them, whereas competition, creating an export base, lowering tax and accessing skilled labor are of little concern. Practical implications The goal of Japanese FDI in the USA is no longer to bypass tariffs but is still part of a complex industrial network of relations which drives further investment. This result can inform policy makers at the state level about the factors that can drive additional foreign investment, such as the establishment of industrial clusters. Originality/value This study offers current insights into the motives of Japanese FDI in two industries.

Advancing research on the determinants of Indian MNEs: the role of sub-national institutions

2018 ◽  
Vol 13 (3) ◽  
pp. 536-556 ◽  
Author(s):  
Rishika Nayyar
Keyword(s):  
Foreign Direct Investment ◽  
Conceptual Framework ◽  
Direct Investment ◽  
Empirical Studies ◽  
National Level ◽  
State Level ◽  
Outward Foreign Direct Investment ◽  
Outward Fdi ◽  
Indian States ◽  
Content Type

Purpose The purpose of this paper is to provide directions for advancing the research on determinants of outward foreign direct investment (FDI) from India. Design/methodology/approach The paper uses literature review as a method to identify a research gap in the literature on internationalization of Indian firms. Findings The synthesis of the theoretical debate and empirical studies conducted in context of EMNEs, with a particular focus on India and preliminary examination of data on cross-border acquisitions as well as institutions in India lead us to argue for the consideration of institutions at sub-national level (Indian states) in examining the determinants of outward FDI from India. The paper also proposes a conceptual framework relating to the mechanism through which institutions at the state level in India affect the propensity of firms to invest overseas. Research limitations/implications Since the propositions are not tested empirically, the paper does not provide conclusive results. Originality/value In addition to providing the synthesis of the theoretical debate and empirical studies, paper is, to the best of author’s knowledge, the first one to present a conceptual framework relating institutions at sub-national level with the outward foreign direct investment from India.

The halo effect: violent crime and foreign direct investment

2017 ◽  
Vol 25 (4) ◽  
pp. 287-306 ◽  
Author(s):  
Miguel A. Ramos ◽  
Nathan J. Ashby
Keyword(s):  
Foreign Direct Investment ◽  
Violent Crime ◽  
Direct Investment ◽  
Cognitive Biases ◽  
State Level ◽  
Halo Effect ◽  
Test Theory ◽  
Content Type ◽  
International Business Research ◽  
The Impact

Purpose The purpose of this paper is to develop and test theory regarding a geographic halo effect, whereby foreign investors draw overly broad impressions about a country based on high levels of violent crime in specific locations impacting foreign direct investment (FDI) across the country. Design/methodology/approach The authors analyze the impact of homicides on FDI by source country into Mexican states from 2001 to 2015. They estimate fixed effect and dynamic panel models controlling for several determinants of FDI at the state level and the potential geographic spillover of such violence from adjacent states. Findings The authors find robust support for the existence of a geographic halo effect caused by violent crime. The results show that the highest number of state homicides is associated with lower FDI across states. Research limitations/implications The research provides some evidence of the potential role of cognitive biases on FDI decisions. In addition, its focus on Latin America brings attention to an understudied region in international business research. Practical implications For practitioners engaged in FDI decisions, the results imply the need to be more aware of potential cognitive biases that may influence them. Originality/value Few papers have explored the influence of cognitive biases on FDI.

A new era for foreign direct investment?

2017 ◽  
Vol 25 (1) ◽  
pp. 5-10 ◽  
Author(s):  
Steven Globerman
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Design Methodology ◽  
Empirical Literature ◽  
The European Union ◽  
Content Type ◽  
New Era ◽  
Political Events ◽  
The Usa ◽  
The Uk

Purpose The paper aims to provide an updated broad assessment of the environment for foreign direct investment (FDI) in light of the referendum vote in the UK to exit the European Union (Brexit), the election of Donald Trump as President of the USA and growing nationalist movements in Europe. Design/methodology/approach The paper uses an essay format to set out the main issues linking recent political developments to FDI. It reviews some relevant empirical literature to assess the identified linkages. Findings It seems reasonable to argue that there will be a reduction in FDI intensity on a global basis over the foreseeable future. It is also likely that the nature of FDI will move more toward being a substitute rather than a complement to trade. Originality/value The essay is original and valuable in the sense of offering a contemporary assessment of how important the recent political events may affect the FDI process.

Economic and Political Factors for the Fall of Japanese Foreign Direct Investment in China

2016 ◽  
Vol 08 (03) ◽  
pp. 110-120
Author(s):  
Yuqing XING
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Wage Growth ◽  
Economic Factors ◽  
Political Factors ◽  
Japanese Fdi ◽  
Japanese Companies ◽  
Investment In China

Japanese direct investment in China fell sharply in 2013 and 2014. Both political and economic factors contributed to the fall. Political tensions between the two countries greatly exacerbated China risks as perceived by Japanese companies and dampened their confidence of investing in China. Additionally, China has lost its competitiveness of attracting export-oriented Japanese FDI because of the cumulative appreciation of the Yuan and rapid wage growth.

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.

The impact of labor freedom on geographic cost of living differentials

2017 ◽  
Vol 6 (3) ◽  
pp. 385-395
Author(s):  
Richard Cebula ◽  
James E. Payne ◽  
Donnie Horner ◽  
Robert Boylan
Keyword(s):  
Labor Market ◽  
State Level ◽  
The State ◽  
Annual Data ◽  
Significant Finding ◽  
Cost Of Living ◽  
Content Type ◽  
The Usa ◽  
The Cost ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of labor market freedom on state-level cost of living differentials in the USA using cross-sectional data for 2016 after allowing for the impacts of economic and quality of life factors. Design/methodology/approach The study uses two-stage least squares estimation controlling for factors contributing to cost of living differences across states. Findings The results reveal that an increase in labor market freedom reduces the overall cost of living. Research limitations/implications The study can be extended using panel data and alternative measures of labor market freedom. Practical implications In general, the finding that less intrusive government and greater labor freedom are associated with a reduced cost of living should not be surprising. This is because less government intrusion and greater labor freedom both inherently allow markets to be more efficient in the rationalization of and interplay with forces of supply and demand. Social implications The findings of this and future related studies could prove very useful to policy makers and entrepreneurs, as well as small business owners and public corporations of all sizes – particularly those considering either location in, relocation to, or expansion into other markets within the USA. Furthermore, the potential benefits of the National Right-to-Work Law currently under consideration in Congress could add cost of living reductions to the debate. Originality/value The authors extend the literature on cost of living differentials by investigating whether higher amounts of state-level labor market freedom act to reduce the states’ cost of living using the most recent annual data available (2016). That labor freedom has a systemic efficiency impact on the state-level cost of living is a significant finding. In our opinion, it is likely that labor market freedom is increasing the efficiency of labor market transactions in the production and distribution of goods and services, and acts to reduce the cost of living in states. In addition, unlike previous related studies, the authors investigate the impact of not only overall labor market freedom on the state-level cost of living, but also how the three sub-indices of labor market freedom, as identified and measured by Stansel et al. (2014, 2015), impact the cost of living state by state.

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.

Neither side is ready to step back in Georgian crisis

2021 ◽  
Keyword(s):  
United States ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Prime Minister ◽  
The United States ◽  
Content Type ◽  
Eu Membership ◽  
National Movement ◽  
Election Victory ◽  
Political Turmoil

Significance The authorities went ahead with the arrest of Nika Melia, leader of the opposition United National Movement (UNM), on February 23 even after the prime minister resigned in protest. Georgian Dream's actions have caused concern in Western capitals that approved its election victory when the opposition cried foul. Impacts The crisis is a setback for the government's stated plan to apply for EU membership in 2024. There is growing talk in the United States about individual sanctions targeting Ivanishvili and his associates. Political turmoil will harm hopes of foreign direct investment and the imminent Anaklia port tender.

India’s vaccine diplomacy brings money and influence

2021 ◽  
Keyword(s):  
United States ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
The United States ◽  
Active Pharmaceutical Ingredients ◽  
Content Type ◽  
Pharmaceutical Ingredients ◽  
The World

Significance Last week, its partners in the ‘Quad’ grouping -- the United States, Japan and Australia -- agreed to help increase its vaccine manufacturing and exporting capacity. Each of the Quad members is wary of China, which like India is gifting and selling coronavirus jabs around the world. Impacts India’s manufacturing sector will attract more foreign direct investment. Greater cooperation over supply chains will help strengthen India-Australia ties. Indian pharma will in the long term aim to ease dependence on imports of active pharmaceutical ingredients from China.

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.

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