A Comparative Analysis of the Patterns of Japanese and Korean Foreign Direct Investment in China

2012 ◽  
pp. 309-324 ◽  
Author(s):  
Jai S. Mah ◽  
Sunyoung Noh
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Value Added ◽  
Chinese Economy ◽  
The Past ◽  
Employment Generation ◽  
Japanese Fdi ◽  
Investment In China ◽  
Opening Up

The current paper compares the patterns of Japanese outward foreign direct investment (OFDI) in China with that of Korea. As a result of the opening up of the Chinese economy together with the accumulating foreign exchange reserves, their FDI in China has risen over the past decades. The share of Japanese FDI in China has remained less than 20 percent of Japanese OFDI as a whole, while Korean FDI in China reached two-fifths of its total OFDI. The gravity model appears to be suitable for explaining the pattern of Korean FDI in China. By industries, the manufacturing sector has accounted for as much as or over three quarters of Japanese and Korean FDI in China. The former appears to be focused more on value-added industries such as machinery contributing to transfer of advanced technologies, while the latter is relatively more concentrated on labor intensive industries contributing to employment generation.

scholarly journals Capital Account Liberalization and Capital Movement in China

2021 ◽  
Vol 18 (1) ◽  
pp. 63-78
Author(s):  
Badar Alam Iqbal ◽  
Nida Rahman ◽  
Mohd Nayyer Rahman
Keyword(s):  
Foreign Direct Investment ◽  
Current Account ◽  
Direct Investment ◽  
Chinese Economy ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
Theoretical Understanding ◽  
Investment In China ◽  
Opening Up ◽  
Significant Bearing

Capital account liberalization has always been at the core of economic policymaking. China is a country which has chosen to go gradual in opening up the capital account. The present research seeks to manoeuvre aspects of capital account liberalization for the Chinese economy. An empirical investigation is run for ascertaining the particular influence capital controls has had on foreign direct investment in China which has outpaced other capital flows in the past decades. The model applied involves foreign direct investment inflows as the dependent variable while four variables are independent. The stationarity of the univariate series is checked with the use of Augmented Dicky Fuller test. The study concludes with theoretical understanding that full liberalization of the current account in China has overall benefited the economy. The outcome of the study suggests that there is no significant bearing of current account liberalization on foreign direct inflows.

scholarly journals The Rise of China and Foreign Direct Investment from Southeast Asia

2011 ◽  
Vol 30 (2) ◽  
pp. 65-75 ◽  
Author(s):  
Krislert Samphantharak
Keyword(s):  
Foreign Direct Investment ◽  
Southeast Asia ◽  
Direct Investment ◽  
Network Effects ◽  
Ethnic Relations ◽  
Chinese Economy ◽  
Cheap Labour ◽  
Rise Of China ◽  
Growing Economy ◽  
Investment In China

This paper discusses foreign direct investment from Southeast Asia to China. With the exception of some government-linked companies, most investments from Southeast Asia have been dominated by the region's overseas Chinese businesses. In addition to cheap labour costs, large domestic market and growing economy, China has provided business opportunities to investors from Southeast Asia thanks to their geographic proximity and ethnic connections, at least during the initial investment period. However, the network effects seem to decline soon after. As the Chinese economy becomes more globalised and more competitive, the success of foreign investment in China will increasingly depend on business competency rather than ethnic relations.

scholarly journals Modeling the impact assessment of agricultural sector on economic development as a basis for the country’s investment potential

2019 ◽  
Vol 16 (3) ◽  
pp. 229-240
Author(s):  
Alina Bukhtiarova ◽  
Arsen Hayriyan ◽  
Victor Chentsov ◽  
Sergii Sokol
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Agricultural Sector ◽  
Negative Impact ◽  
Manufacturing Sector ◽  
Value Added ◽  
The Cost ◽  
The Impact

In the context of countries integration into the world economic space, agricultural sector is one of the priorities and strategically important sectors of the national economy. Development of instruments aimed to increase investment potential of this sector is therefore an important component of the country’s economy growth. The article proposes a science-based model of the impact of the agricultural sector on the economic development level of countries trying to move towards European integration.It was found that the employment rate (+58.4) has the largest influence on the rate of GDP change in the studied group of countries (Ukraine, Moldova, Georgia, Armenia). The impact of the gross value added of the manufacturing sector on its economic growth is positive (+44.6). The negative foreign direct investment ratio in the model (–40.3) may be due to the fact that the indicator in the studied countries is still largely influenced by the intervention of the state mechanism, significant uncertainty and risk, which is a deterrent to the overall economic development. An important result of the study was that foreign direct investment had a negative impact on economic growth in developing countries. Further development of the investment potential of a country’s agricultural sector provides for a radical acceleration of scientific and technological progress and, on this basis, a reduction in the cost of a unit of agricultural products and food and an increase in their competitiveness in the domestic and world markets.

FOREIGN DIRECT INVESTMENTS AND MANUFACTURING SECTOR PERFORMANCE IN NIGERIA, (1970-2009)

2013 ◽  
Vol 03 (04) ◽  
pp. 39-56
Author(s):  
Adejumo Akintoye Victor
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Manufacturing Sector ◽  
Value Added ◽  
Foreign Direct Investments ◽  
Long Run ◽  
Negative Effect ◽  
Sector Performance ◽  
The Relationship

The study examined the relationship between foreign direct investment and the value added to the manufacturing industry in Nigeria, between the period 1970 and 2009. In view of the development and industrialising desires of Nigeria, as well as the foreign aid received in form of private investments, it is pertinent to examine the effect the presence of multinationals has had in shaping the Nigerian manufacturing industry. Using the autoregressive lag distribution technique to determine the relationship between foreign direct investment and manufacturing value added, it was discovered that in the long-run, foreign direct investments have had a negative effect on the manufacturing sub-sector in Nigeria.

Malaysia's Response to the China Challenge

2003 ◽  
Vol 2 (2) ◽  
pp. 46-73 ◽  
Author(s):  
Zainal Aznam Yusof
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Manufacturing Industries ◽  
Policy Recommendations ◽  
Policy Options ◽  
Electronics And Electrical ◽  
Opening Up

Malaysia is a rapidly growing and resource-rich country that has been industrializing since the late 1960s. Its industrialization has relied on the growth of labor-intensive industries, particularly the electronics and electrical-products industries, which have contributed significantly to the growth of the manufacturing sector. The growth and opening up of China has raised concerns about Malaysia's loss of competitiveness to China and the diversion of foreign direct investment to China. This paper examines the relative competitive position of Malaysia and China and explores Malaysia's responses and policy options, both international and national, to the challenges posed by China. The following policy recommendations for Malaysia are explored: working intensively with its partners in ASEAN to develop a common stand with regard to trade arrangements, forming bilateral free trade agreements with selected countries, restructuring Malaysia's manufacturing industries so they are far less dependent on labor-intensive industries, and improving the education and technological skills of Malaysia's labor force.

Foreign direct investment in the czech manufacturing sector

1997 ◽  
Vol 6 (2) ◽  
Author(s):  
Vladimír Benáček ◽  
Alena Zemplinerová
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Capital ◽  
Manufacturing Sector ◽  
Value Added ◽  
Salient Feature ◽  
Physical Capital ◽  
Manufacturing Industries ◽  
Input Side ◽  
Capital Intensive

In the period of 1991-96 there were large volumes of foreign direct investment directed to various Czech manufacturing industries and services. Our empirical analysis has shown that enterprises of the manufacturing sector, into which the foreign capital was invested, were generally physical capital intensive and labor saving. At the same time, both capital and labor efficiencies in firms with FDI have been significantly above the domestic average. Another salient feature of the FDI enterprises is that they are very export intensive and, on the input side, they have a higher proportion of material inputs and thus relatively lower proportion of value added.

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.

scholarly journals Essays on Foreign Direct Investment, International Trade, and Inequality

2021 ◽  
Author(s):  
Minh Nam Ngo
Keyword(s):  
Foreign Direct Investment ◽  
International Trade ◽  
Vocational Education ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Tertiary Education ◽  
Value Added ◽  
The United States ◽  
High Tech ◽  
The Impact

<p>This thesis consists of three empirical essays on the impact on inequality of Foreign Direct Investment (FDI), international trade, and technological progress that comes with them. The first essay examines whether FDI contributes towards income convergence of the host country, drawing evidence from provincial data in Vietnam. Using the spatial econometrics approach and an exogenous set of distance-based weights to characterize spatial dependences, we identify the substantial role of both spatial interactions and FDI spillovers in bringing provinces closer together in terms of income level. We show that high-tech FDI and industry FDI agglomerations contribute significantly more towards the convergence process than low-tech FDI and agglomerations formed by FDI firms coming from the same country. A similar pattern also emerges when we consider consumption convergence. The second essay studies the impact of local labour demand shocks from FDI firms on wage distribution, using microdata from the Vietnam Household Labour Force Survey. We use Bartik shift-share instrument based on the interaction between predetermined local employment structure and time-varying nationwide employment to deal with the endogeneity between local wage level and multinational firms’ locational decisions. Overall, we find that surges in foreign hiring increase average local wage, but the benefits are considerably higher for workers who work in lower-skilled occupations or have lower educational attainments. Given the prevailing skill and education wage premium, this heterogeneous effect provides evidence that the presence of FDI firms can reduce wage inequality. The third essay analyzes the association between income inequality, dependence on the manufacturing sector, and the availability of vocational education as an alternative track to general tertiary education. We find that in countries where tertiary and vocational are the two main available pathways for students to pursue, as economic recovery, trade, and automation increases the value-added of the manufacturing sector but decreases the number of manufacturing jobs, improving access to vocational education is associated with a larger decline in inequality compared to tertiary education. Therefore, in the long run, limited public resources should be directed towards vocational education in order to smooth out adjustment to trade and skilled-biased technological change. A case study comparing the United States and Germany in terms of their recovery paths from the Global Financial Crisis provide further evidence for our claims.</p>

scholarly journals Essays on Foreign Direct Investment, International Trade, and Inequality

2021 ◽  
Author(s):  
Minh Nam Ngo
Keyword(s):  
Foreign Direct Investment ◽  
International Trade ◽  
Vocational Education ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Tertiary Education ◽  
Value Added ◽  
The United States ◽  
High Tech ◽  
The Impact

<p>This thesis consists of three empirical essays on the impact on inequality of Foreign Direct Investment (FDI), international trade, and technological progress that comes with them. The first essay examines whether FDI contributes towards income convergence of the host country, drawing evidence from provincial data in Vietnam. Using the spatial econometrics approach and an exogenous set of distance-based weights to characterize spatial dependences, we identify the substantial role of both spatial interactions and FDI spillovers in bringing provinces closer together in terms of income level. We show that high-tech FDI and industry FDI agglomerations contribute significantly more towards the convergence process than low-tech FDI and agglomerations formed by FDI firms coming from the same country. A similar pattern also emerges when we consider consumption convergence. The second essay studies the impact of local labour demand shocks from FDI firms on wage distribution, using microdata from the Vietnam Household Labour Force Survey. We use Bartik shift-share instrument based on the interaction between predetermined local employment structure and time-varying nationwide employment to deal with the endogeneity between local wage level and multinational firms’ locational decisions. Overall, we find that surges in foreign hiring increase average local wage, but the benefits are considerably higher for workers who work in lower-skilled occupations or have lower educational attainments. Given the prevailing skill and education wage premium, this heterogeneous effect provides evidence that the presence of FDI firms can reduce wage inequality. The third essay analyzes the association between income inequality, dependence on the manufacturing sector, and the availability of vocational education as an alternative track to general tertiary education. We find that in countries where tertiary and vocational are the two main available pathways for students to pursue, as economic recovery, trade, and automation increases the value-added of the manufacturing sector but decreases the number of manufacturing jobs, improving access to vocational education is associated with a larger decline in inequality compared to tertiary education. Therefore, in the long run, limited public resources should be directed towards vocational education in order to smooth out adjustment to trade and skilled-biased technological change. A case study comparing the United States and Germany in terms of their recovery paths from the Global Financial Crisis provide further evidence for our claims.</p>

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