scholarly journals Troubled Banks, Impaired Foreign Direct Investment: The Role of Relative Access to Credit

2002 ◽  
Vol 92 (3) ◽  
pp. 664-682 ◽  
Author(s):  
Michael W Klein ◽  
Joe Peek ◽  
Eric S Rosengren
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Real Exchange Rates ◽  
The United States ◽  
Data Sets ◽  
Firm Level ◽  
Access To Credit ◽  
Japanese Firms ◽  
Level Data ◽  
Japanese Fdi

During the 1980's, theories were developed to explain the striking correlation between real exchange rates and foreign direct investment (FDI). However, this relationship broke down for Japanese FDI in the 1990's, as the real exchange rate appreciated while FDI plummeted. We propose the relative access to credit hypothesis and show that unequal access to credit by Japanese firms contributes to the explanation of declining Japanese FDI. Using bank-level and firm-level data sets, we find that financial difficulties at banks were economically and statistically important in reducing the number of FDI projects by Japanese firms into the United States.

Foreign Direct Investment and the Flying Geese Model: Japanese Electronics Firms in Asia-Pacific

2000 ◽  
Vol 32 (2) ◽  
pp. 281-304 ◽  
Author(s):  
David W Edgington ◽  
Roger Hayter
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Asia Pacific ◽  
Critical Examination ◽  
Host Countries ◽  
Billiard Ball ◽  
Firm Level ◽  
Geographical Patterns ◽  
Japanese Fdi

This paper is a critical examination of the ‘flying geese’ and ‘billiard ball’ models of foreign direct investment (FDI) and their ability to explain the spatial expansion of Japanese electronics multinationals (MNCs) in Asia-Pacific countries from 1985 to 1996. Data on Japanese FDI are analyzed in this region at the aggregate, sectoral, and firm level. The paper commences with a review of the flying geese model, especially that version which interprets Japanese FDI as a catalyst for Asian development, and the billiard ball metaphor which suggests a mechanism for host countries to ‘catch up’ with Japan. The authors then turn to an analysis of Japanese FDI in Asia-Pacific together with employment data for fourteen major firms. This allows an evaluation of the two models in terms of recent geographical patterns of investment and employment growth by electronics MNCs. A special case study of Matsushita Electric Industrial Co. Ltd (MEI) helps flesh out the evolving geography of Japanese electronics firms in Asia-Pacific. Although the results support the overall patterns suggested by the two models, the authors argue that metaphors and analogies such as flying geese and billiard balls should not be used casually and as a substitute for analysis.

IS THERE A POSITIVE ASSOCIATION BETWEEN MERGER AND ACQUISITION AND NON-MERGER AND ACQUISITION FDI? FIRM-LEVEL EVIDENCE FROM JAPANESE FOREIGN DIRECT INVESTMENT INTO UNITED STATES

2013 ◽  
Vol 58 (04) ◽  
pp. 1350028
Author(s):  
JOSEPH D. ALBA ◽  
PETER X. K. SONG ◽  
PEIMING WANG
Keyword(s):  
United States ◽  
Positive Association ◽  
The United States ◽  
Merger And Acquisition ◽  
Foreign Direct Investments ◽  
Firm Level ◽  
Complementary Effect ◽  
Japanese Firms ◽  
Level Data ◽  
Unit Increase

Japanese firms undertake multiple foreign direct investments (FDIs) in the United States. When Japanese firms undertake merger and acquisition (M&A) FDI, they acquire indivisible assets in the United States. To utilize their acquired assets fully, these firms may undertake additional non-M&A FDI. This implies a positive association between the number of M&As and the number of non-M&A FDIs because they may be complements. In contrast, the literature on the choice of modes of FDI examines the tradeoff between M&A and non-M&A FDI. This may suggest a negative association between the number of M&As and non-M&A FDIs because they may be substitutes. The authors examine whether the number of M&As and non-M&A FDIs are positively associated or not by proposing an econometric model that tests the contemporaneous association and the lagged complementary effect between M&A and non-M&A FDI. Using firm-level data, the authors find evidence that M&A and non-M&A FDI of Japanese firms in the United States are positively associated. Particularly, the findings indicate that given all other things equal, a one unit increase in the number of the firm's M&A FDI (non-M&A) projects in a given year will increase the firm's average non-M&A (M&A) FDI by 28.1% (15.8%) the following year.

Does FDI Mode of Entry Matter for Economic Developments of a Host Country? The Case of Korea

2006 ◽  
Vol 5 (3) ◽  
pp. 171-185
Author(s):  
Seong-Bong Lee ◽  
Mikyung Yun
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Classification Scheme ◽  
Ongoing Debate ◽  
Firm Level ◽  
Mode Of Entry ◽  
Level Data ◽  
Firm Level Data ◽  
Economic Developments ◽  
Level Performance

There is an ongoing debate on whether benefits of foreign direct investment (FDI) differ depending on the modes of FDI entry. This paper examines this debate using firm-level data on FDI in Korea. The paper adopts a new, more accurate classification scheme than the current official classification system and finds that there is little difference in firm-level performance according to FDI mode of entry. The paper thus argues against any provision of preferential incentives based on modes of entry.

Determinants and effects of foreign direct investment: evidence from German firm-level data

2005 ◽  
Vol 20 (41) ◽  
pp. 52-110 ◽  
Author(s):  
C. M. Buch ◽  
J. Kleinert ◽  
A. Lipponer ◽  
F. Toubal ◽  
R. Baldwin
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
German Firm ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data

scholarly journals Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages

2004 ◽  
Vol 94 (3) ◽  
pp. 605-627 ◽  
Author(s):  
Beata Smarzynska Javorcik
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Ownership ◽  
Foreign Investments ◽  
Firm Level ◽  
Productivity Spillovers ◽  
Level Data ◽  
Firm Level Data ◽  
Foreign Affiliates ◽  
Backward Linkages

Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. In contrast with earlier literature that failed to find positive intraindustry spillovers from FDI, this study focuses on effects operating across industries. The analysis, based on firm-level data from Lithuania, produces evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local suppliers in upstream sectors. The data indicate that spillovers are associated with projects with shared domestic and foreign ownership but not with fully owned foreign investments.

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.

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