scholarly journals Foreign Direct Investment, Firm Heterogeneity, and Exports: An Analysis of Indian Manufacturing

2018 ◽  
Vol 35 (1) ◽  
pp. 27-51 ◽  
Author(s):  
Maitri Ghosh ◽  
Saikat Sinha Roy
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Firm Heterogeneity ◽  
Export Performance ◽  
Sunk Costs ◽  
Performance Estimation ◽  
Firm Level ◽  
Specific Factors ◽  
The Impact

Using firm-level data, this paper investigates whether foreign direct investment and the presence of multinational enterprises explains India's improved export performance during the postreform period. The recent literature stresses that firm heterogeneity gives some firms an edge over others to self-select into export markets. Apart from ownership, this paper considers firm heterogeneity and other firm-specific factors of export performance. Estimation results show that the impact of foreign ownership on export performance does not significantly differ from that of domestic firms across sectors in Indian manufacturing. Rather, firms build their international competitiveness by importing raw materials and foreign technical know-how, and by investing in research and development. Further, firm heterogeneity, measured in terms of sunk costs, significantly impacts firm-level export intensity. The study also reveals that there are ownership-specific factors that determine firm-level exports.

Innovation and Information Technology in the MNE

2009 ◽  
Author(s):  
John Cantwell
Keyword(s):  
Information Technology ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Multinational Enterprise ◽  
Product Cycle ◽  
Cycle Model ◽  
Transfer Of Technology ◽  
The 1950S ◽  
The Impact

This article focuses on the roles innovation and information technology play in the multinational enterprise. In recent years there has been a steady expansion in the literature that relates the internationalization of production to the development and transfer of technology by multinational enterprises (MNEs). It is a literature that can be dated back at least to John Dunning's (1958) seminal study of the impact of US MNEs upon UK technology and productivity, and Ray Vernon's (1966) development of the product cycle model (PCM) as an explanation of the technological dynamism associated with the growth of US foreign direct investment (FDI) in Europe in the 1950s and 1960s.

scholarly journals Resolving Conflict between Parties and Consequences for Foreign Direct Investment: The Repsol-YPF Case in Argentina

2019 ◽  
Vol 11 (21) ◽  
pp. 6012 ◽  
Author(s):  
Raquel Fernández González ◽  
María Elena Arce Fariña ◽  
María Dolores Garza Gil
Keyword(s):  
Foreign Direct Investment ◽  
Transaction Costs ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Institutional Framework ◽  
Judicial Process ◽  
Institutional Economic ◽  
Long Duration ◽  
Judicial Procedure ◽  
The Impact

In 2012, the Argentine government expropriated 51% of the shares of Yacimientos Petrolíferos Fiscales S.A. (YPF) from the Spanish company Repsol S.A. The YPF was nationalized without prior compensation, violating Argentina’s own laws and, consequently, the institutional framework in force in the country. As a consequence, the country’s reputation deteriorated and, although there were several contacts with multinational enterprises to become YPF’s new partner, the investment climate was affected, making it really difficult to attract Foreign Direct Investment (FDI). In order to attract these investments after the expropriation, the Argentine government understands that it is necessary to settle the legal proceedings with Repsol. In order to avoid an imperfect judicial procedure of long duration and with high transaction costs, both parties reached a settlement agreement. This paper presents an institutional economic analysis of expropriation, contextualizing it within the Argentine institutional framework and studying the trajectory of the nationalization of YPF. In this way, it seeks to contextualize institutionally the Argentine government’s decision and the impact it has had on both the FDI and the credibility of the country’s institutional framework. It also analyzes how the resolution of the conflict occurs through an agreement between the parties that avoids the judicial process, given its high transaction costs.

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).

Socialist Protoglobalization and Patterns of Uneven Transnational Integration After 1989

2018 ◽  
pp. 108-141
Author(s):  
Besnik Pula
Keyword(s):  
Foreign Direct Investment ◽  
Institutional Change ◽  
Capital Flows ◽  
Joint Ventures ◽  
Direct Investment ◽  
Economic Liberalization ◽  
Organizational Processes ◽  
Firm Level ◽  
Policy Orientation ◽  
The Impact

This chapter looks at the rise of foreign direct investment (FDI), both as a new policy orientation, and as a process of capital flows with institutionally transformative consequences in postsocialist economies. While the previous chapters focused largely on political elites and macro-institutional change during the late socialist era, this chapter shifts attention to the impact of organizational processes at the firm level during the immediate postsocialist period in driving the transition towards globally integrated postsocialist industries. The chapter systematically examines patterns of institutional change from joint ventures to foreign direct investment across the region, and demonstrates the capacities of economies with the most diffuse experience with socialist proto-globalization in making the most rapid gains from globalization after economic liberalization post-1989.

scholarly journals Foreign direct investment in the G-20: to what extent do institutions matter?

2018 ◽  
Vol 53 (3) ◽  
pp. 404-421
Author(s):  
Jurema Tomelin ◽  
Mohamed Amal ◽  
Nelson Hein ◽  
Andreia Carpes Dani
Keyword(s):  
Decision Making ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Global Financial Crisis ◽  
Economic Factor ◽  
Topsis Method ◽  
Firm Level ◽  
Content Type ◽  
Governance Indicators ◽  
The Impact

Purpose This study aims to identify to what extent the economic factor effect is more salient in shaping inward foreign direct investment (IFDI) than are institutional factors in G-20 inflow patterns. Design/methodology/approach Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) method was applied using the World Bank Governance and Development Indicators, followed by a panel data technique over the period 2005-2015 to estimate the connections between the different dimensions of economics, institutions and IFDI in the G-20. Findings Results showed that countries with better economic performance contrasting with the governance indicators are more effective at attracting IFDI. However, the correlation between FDI intensity and governance indicators has been found relatively weak, which may suggest a more controversial role of institutions as determinants of IFDI. Research limitations/implications This quantitative approach uses a country-level set of variables; therefore, the authors suggest the development of more firm-level analysis of the impact of institutions. Also, the limitation of the TOPSIS method itself is based on heuristic assumptions. Practical implications The main findings point to a relatively low impact of institutions on IFDI. The authors suggest that the global financial crisis has changed the rationale of decision-making by multinational companies. Originality/value The originality of the present study was to apply a multi criteria decision-making technique on FDI’s analysis combined with institutional data.

scholarly journals Impact of Foreign Direct Investment, Trade Openness, Domestic Demand, and Exchange Rate on the Export Performance of Bangladesh: A VEC Approach

2012 ◽  
Vol 2012 ◽  
pp. 1-10 ◽  
Author(s):  
Bishnu Kumar Adhikary
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Export Performance ◽  
Trade Openness ◽  
Domestic Demand ◽  
Vec Model ◽  
Long Run ◽  
Short Run ◽  
The Impact

This paper investigates the impact of foreign direct investment (FDI), trade openness, domestic demand, and exchange rate on the export performance of Bangladesh over the period of 1980–2009 using the vector error correction (VEC) model under the time series framework. The stationarity of the variables is checked both at the intercept and intercept plus trend regression forms under the ADF and PP stationarity tests. The Johansen-Juselius procedure is applied to test the cointegration relationship between variables followed by the VEC regression model. The empirical results trace a long-run equilibrium relationship in the variables. FDI is found to be an important factor in explaining the changes in exports both in the short run and long-run. However, the study does not trace any significant causal relationship for the cases of trade openness, domestic demand, and exchange rate. The study concludes that Bangladesh should formulate FDI-led polices to enhance its exports.

scholarly journals Foreign Direct Investment and the Survival of Domestic Private Firms in Viet Nam

2014 ◽  
Vol 31 (1) ◽  
pp. 53-91 ◽  
Author(s):  
Ari Kokko ◽  
Tran Toan Thang
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Private Firms ◽  
Viet Nam ◽  
Firm Level ◽  
Level Data ◽  
Vertical Fdi ◽  
Negative Effect ◽  
The Impact ◽  
Local Firms

Foreign direct investment (FDI) may benefit local firms in the host country through various kinds of spillovers, but it may also raise competition and result in the crowding out of domestic firms. Using detailed firm-level data for the period 2001–2008, this paper examines the aggregate effect of FDI on the survival of domestic private firms in Viet Nam. We estimate the impact of both horizontal and vertical FDI and explore how the presence of state-owned enterprises (SOEs) influences the exit hazard for private firms. The results suggest that horizontal and upstream FDI raise the exit hazard significantly, while downstream FDI may reduce the hazard. The presence of SOEs has a direct negative effect on the survival odds of local private firms in the same industry, but there is also an indirect impact on the exit hazard from FDI. Local firms are more vulnerable to foreign entry in sectors with high SOE shares. Looking at the net effects of FDI during the period 2001–2008, we find that results vary between sectors and over time but that the overall impact has been surprising small. The paper also discusses policy conclusions and implications for empirical analyses of spillovers from FDI.

scholarly journals Does Inward Foreign Direct Investment Promote Export? Empirical Evidence from Sri Lanka

2018 ◽  
Vol 8 (3) ◽  
pp. 1
Author(s):  
Samantha NPG ◽  
Liu Haiyun
Keyword(s):  
Foreign Direct Investment ◽  
Sri Lanka ◽  
Direct Investment ◽  
Export Performance ◽  
Real Effective Exchange Rate ◽  
Domestic Investment ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Bound Test

Export-led growth hypothesis assumed that long-term economic growth can be achieved through higher exports. Foreign Direct Investment (FDI) is one of the determinants of export performance that can have a substitute effect or complementary relationship to export. The aim of this study is to investigate the impact of inward FDI on the export performance of Sri Lanka during the period from 1980 to 2016. Auto Regressive Distributed Lag (ARDL) model and bound test are applied to identify the long-run relationship and short-run dynamics of the selected variables. The short-run causality is checked by applying the Granger causality test. The ARDL bound test confirms long-run relationship among the variables. The study finds positive insignificant long run and short-run relationships between FDI and exports in Sri Lanka for the data period. Exports are highly sensitive to GDP and real effective exchange rate in the short-run and to domestic investment in the long-run. In order to promote exports via FDI, government policy should focus on attracting more FDI by drawing attention to national competitiveness. The study suggests a comprehensive sector level investigation on the impact of FDI on export performance of Sri Lanka.

Foreign Direct Investment, Technological Innovation, and Export Performance

2018 ◽  
pp. 1-24
Author(s):  
Arzu Tay Bayramoglu ◽  
Tezcan Abasız
Keyword(s):  
Foreign Direct Investment ◽  
United Arab Emirates ◽  
Direct Investment ◽  
Technological Development ◽  
Export Performance ◽  
Panel Cointegration ◽  
Foreign Direct Investments ◽  
Asian Countries ◽  
Patent Applications ◽  
The Impact

This chapter's objective is to explore the effects of foreign direct investment inflows and technological innovations on export performance in developing Asian countries (Hong Kong, China, Indonesia, Singapore, India, Turkey, Malaysia, Vietnam, United Arab Emirates, and Thailand) in the period of 1990-2015 by using the panel cointegration technique. The empirical results reveal that there is a cointegration among the variables, and cointegration regression shows that the foreign direct investments, per income and patent applications, have a positive and statistically significant impact on export performance in developing Asian countries. The results reveal that the impact of patent applications is greater than the foreign direct investments on exports. Then, technological development affects exports positively in all countries in the sample, except for India and the United Arab Emirates.

scholarly journals Impact of Extensive and Intensive Margins of Foreign Direct Investment on Domestic Corporate Performance: Evidence from Japanese Automobile Parts Suppliers

2017 ◽  
Vol 16 (2) ◽  
pp. 187-209
Author(s):  
Toshiyuki Matsuura
Keyword(s):  
Foreign Direct Investment ◽  
Instrumental Variable ◽  
Direct Investment ◽  
Corporate Performance ◽  
Firm Level ◽  
Extensive And Intensive Margins ◽  
Level Data ◽  
Automobile Parts ◽  
The Impact ◽  
Parts Suppliers

This study uses firm-level data on Japanese automobile parts suppliers to investigate the impact of foreign direct investment (FDI) on domestic corporate performance. We use the automobile makers’ FDI as an instrumental variable for suppliers’ FDI and estimate the impact of both the extensive and intensive margins of FDI. We find that whereas the intensive margin of FDI does not significantly impact corporate performance, the extensive margin positively influences sales and total factor productivity. Furthermore, the impact of the initial FDI entry brings stronger effects than that of subsequent FDI flows.

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