scholarly journals Effects of Foreign Direct Investments on Serbian Exporters′ Profitability

2017 ◽  
Vol 55 (1) ◽  
pp. 1-23
Author(s):  
Violeta Domanović ◽  
Sandra Stojadinović Jovanović
Keyword(s):  
Direct Investment ◽  
Foreign Capital ◽  
Transition Process ◽  
Foreign Direct Investments ◽  
Return On Assets ◽  
Foreign Investors ◽  
Return On Equity ◽  
The Subject ◽  
Ownership Transformation ◽  
Domestic Companies

Abstract For Serbia the efforts to attract investments from abroad came to the fore with the beginning of transition process. The process of ownership transformation in Serbia most often implied foreign direct investment inflows, because it included participation of foreign investors in purchase of domestic companies that had been the subject of privatisation. The subject of research in the paper is Serbian experience in attracting foreign capital into local export companies with special emphasis on their profitability. Aim of the paper is to estimate the profitability of leading Serbian exporters financed by foreign direct investments, i.e. to determine whether and to what extent foreign direct investments contributed to the increase of return on assets (ROA) and return on equity (ROE), as basic profitability measures. The results show that, in the case of Serbian exporters, the profitability varies, both per companies and per individual years. There is no general conclusion that foreign direct investments contributed to the ROA increase. On the contrary, ROA values significantly varied during this period. Either enormous increase or enormous decrease could be observed. The same goes for ROE values.

scholarly journals Just Look behind the Data! Czech and Hungarian Outward Foreign Direct Investment and Multinationals

2019 ◽  
Vol 69 (S2) ◽  
pp. 73-105 ◽  
Author(s):  
Magdolna Sass ◽  
Jana Vlčková
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Transition Process ◽  
Balance Of Payments ◽  
Foreign Direct Investments ◽  
Outward Foreign Direct Investment ◽  
Outward Fdi ◽  
Foreign Investors ◽  
The Czech Republic ◽  
Main Factors

There has been an increase in outward foreign direct investment (FDI) and in the number of locally-owned or controlled multinationals in the Czech Republic and Hungary. However, data problems hinder to determine accurately the underlying trends and the main factors behind the changes. Data on outward FDI contain investment realised by all locally operational firms, regardless of their ownership. We rely on newly available balance of payments manual 6 (BPM) data and on company case studies. We show that outward investment by Czech firms must be much higher than what balance of payments data show. Hungary's case is the opposite. The leading Czech and Hungarian foreign investor firms can be categorised as “virtual indirect” foreign investors: they are in majority foreign ownership, but under domestic control. The reason for this special type of firms dominating in outward foreign direct investments can be found in the privatisation technique applied in these countries during the transition process.

scholarly journals Establishment of a Company and Share Acquisitions in Turkey by Foreigner Investors

2019 ◽  
Author(s):  
Mustafa Topaloğlu
Keyword(s):  
Foreign Capital ◽  
Stock Exchange ◽  
Foreign Investor ◽  
Foreign Direct Investments ◽  
Government Bonds ◽  
Foreign Investors ◽  
Foreign Companies ◽  
The Republic ◽  
Economic Assets ◽  
A Company

Relating to the establishment and acquisition of a company in Turkey by foreign investors, Foreign Direct Investments Law No.4875, FDI has entered into force on 17.06.2003. FDI formed a notification-based system rather than an approval-based system for foreigners to establish a new company and to take over company shares. Accordingly, company information regarding foreign investors will be notified to the General Directorate of Incentive Implementation and Foreign Capital via “Electronic Incentive Implementation and Foreign Capital Information System”. Foreign investment means establishment of a new company by a foreign investor or share acquisitions of an existing company, any percentage of shares acquired outside the stock exchange or 10 percentage or more of the shares/voting power of a company acquired through the stock exchange, by means of the following economic assets: assets acquired from abroad by the foreign investor which are capital in cash in the form of convertible currency bought and sold by the Central Bank of the Republic of Turkey, stocks and bonds of foreign companies excluding government bonds, machinery and equipment, industrial and intellectual property rights; or assets acquired from Turkey by foreign investor which are reinvested earnings, revenues, financial claims, or any other investment-related rights of financial value, rights for the exploration and extraction of natural resources. According to Article 4 of the Regulation for Implementation of Foreign Direct Investment Law, the Ministry of Economy shall provide information on the companies within the scope of foreign direct investments from Trade Registry Offices and related public institutions and organizations.

scholarly journals Financial development and foreign direct investment nexus: A systematic review of literature

2021 ◽  
Vol 10 (4) ◽  
pp. 226-238
Author(s):  
Mollah Aminul Islam ◽  
Md Nahin Hossain ◽  
Muhammad Asif Khan ◽  
Mohammad Raihanul Hasan ◽  
Md Riad Hassan
Keyword(s):  
Financial Development ◽  
Direct Investment ◽  
Financial Sector ◽  
Foreign Direct Investments ◽  
Risk Averse ◽  
Real Sector ◽  
Review Of Literature ◽  
Foreign Investors ◽  
Good Resource ◽  
Risk Taker

In this study, we review the literature to find how the financial development of a country attracts foreign direct investments for a sustainable real sector development of the country. The area is least focused on literature. Thus we don’t limit our search and review to any time or database or journal category. We find the theoretical logic and empirical evidence so far available in the literature. Our review finds that the development of the financial sector of a country is one of the most important attractors of FDIs. Theoretically, financial sector development works as a symbol of trust and goodness to the new potential investors and a good resource allocation channel for the existing investors. However, very few researchers find that FDIs are more prone to countries with a low developed financial system which may happen due to the presence of risk-taker foreign investors and risk-averse domestic entrepreneurs.

scholarly journals The impact of the sanctions regime on foreign direct investments in Russia

2018 ◽  
Vol 26 (4) ◽  
pp. 760-772
Author(s):  
Yury K Zaytsev
Keyword(s):  
Foreign Direct Investment ◽  
Central Bank ◽  
Direct Investment ◽  
Foreign Direct Investments ◽  
Investment Strategies ◽  
Investment Activity ◽  
Foreign Investors ◽  
Qualitative Level ◽  
European Economies ◽  
The Impact

The economic and political sanctions had a significant impact on the behavior of foreign investors in the real sector of the Russian economy in the period 2014-2017. Despite a significant outflow of foreign direct investment (FDI) in 2015, in 2016-2017, there was an increase in investment activity associated with a steady inflow of FDI, which could be explained by the change in investment strategies of foreign business in Russia. The purpose of the study. The article assesses the impact of Western sanctions and Russian countersanctions on the influx of foreign direct investment into Russia. Methods. The work is based on methods of statistical analysis of the behavior of foreign investors in Russia on the basis of macroeconomic data of the Central Bank of Russia and microeconomic data of the “Ruslana” database. Results. The author gives various assessments of sanctions and counter-sanctions impact on the Russian and European economies, and compares the effects of sanctions policies in Russia and Iran. The stylized facts, identified by the author at the micro level, allow to interpret the macro statistics provided by the Central Bank of Russia at a qualitative level. The conclusion . In conclusion, the author gives recommendations on the possibilities of using new mechanisms of interaction with international institutions to overcome the investment crisis as a consequence of the sanctions regime.

Does Trust Matter for Foreign Direct Investment Decisions?

2016 ◽  
pp. 224-239 ◽  
Author(s):  
Sibel Bali Eryigit
Keyword(s):  
Direct Investment ◽  
Emerging Market ◽  
Investment Decisions ◽  
General Level ◽  
Location Decisions ◽  
Foreign Direct Investments ◽  
Cultural Characteristics ◽  
Host Countries ◽  
Foreign Investors ◽  
Factors Affecting

Factors affecting the investment decisions of multinational companies are heavily researched in the literature. However, the number of studies dealing with the socio-cultural characteristics of host countries among these factors is quite limited. Among the cultural characteristics affecting location decisions, one of the primary cultural characteristics is the general level of trust between individuals. In this scope, this chapter intends to research whether the general level of trust in a society has an effect on the location decisions of foreign investors. In line with this objective, an analysis will be conducted by employing the panel data method for 39 emerging market countries for the period between 1998 and 2011. According to the results of the study, a low general level of trust in the host country represents a significant disadvantage for the attraction of foreign direct investments.

scholarly journals Foreign Direct Investments Induced Innovation? A Case Study – Macedonia

2016 ◽  
Vol 19 (1) ◽  
pp. 5-24
Author(s):  
Mico Apostolov
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Knowledge Society ◽  
Transition Process ◽  
Industrial Society ◽  
Foreign Direct Investments ◽  
Southeast Europe ◽  
A Company ◽  
Triadic Relationship

This paper, while analysing innovation in Southeast Europe, and in particular the case study of Macedonia, focuses on the basic ties between foreign direct investments and innovation. Foreign direct investment is usually defined as dominant or controlling ownership of a company in one country (the host country), by an entity based in another country. The concept of industry-government-university relationships interprets the change from a dominating industry-government duo in the ‘industrial society’ to a growing triadic relationship between industry-government-university in the ‘knowledge society’.From the beginning of the transition process, foreign direct investments have been a priority, an essential pillar that moves the society forward towards a developed market economy. In addition, as the influx of capital increases it inevitably brings with it increased innovation. Hence we examine the possibility that these two indicators have a positive and upward ascent and facilitate the development of the economy.

scholarly journals The Determinants of Cash Conversion Cycle and Firm Performance: An Empirical Research for Borsa Istanbul Turkey

2020 ◽  
Vol 5 (2) ◽  
pp. 197-206
Author(s):  
Mesut DOĞAN ◽  
◽  
Mustafa KEVSER ◽  
Keyword(s):  
Negative Relationship ◽  
Debt Ratio ◽  
Medium Term ◽  
Return On Assets ◽  
Planning Stage ◽  
Return On Equity ◽  
Cash Conversion Cycle ◽  
Basic Functions ◽  
The Subject ◽  
Finance Function

The ultimate goal of firms is to make a profit and to achieve this ultimate goal, firms execute various functions. Finance is one of the basic functions of firms and firms need financial instruments such as cash reserve and outsource to carry out their activities. Cash management within the finance function is an important issue that needs to be carefully considered, especially in the short and medium term financial planning stage. Presently, the high competition among firms forces companies to manage their cash in the most effective way. The conceptual studies on the subject are quite old and date back to Keynes. According to Keynes, firms demand cash for transaction, prudence and speculation. As a result of analysis, it has been determined that cash conversion cycle has an impact on return on assets (ROA) and return on equity (ROE). There is a statistically significant and negative relationship between cash conversion cycle (CCC) return on assets (ROA) and return on equity (ROE). In addition, there is a positive relationship between return on assets (ROA) and firm size while there is a negative and statistically significant relationship between debt ratio (DEBT) and return on assets (ROA).

scholarly journals Indicators influencing performance and stability in GCC banking sector

2017 ◽  
Vol 15 ◽  
pp. 408-420 ◽  
Author(s):  
Majed Alharthi
Keyword(s):  
Banking Sector ◽  
Foreign Direct Investments ◽  
Z Score ◽  
Return On Assets ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Vision 2030 ◽  
Generalised Method Of Moments ◽  
Using Data ◽  
Conventional Banks

The main objective of this study is to identify the factors that can impact on the profitability and stability of GCC banks, using data from the period 2005-2014, to achieve GCC Vision 2030. The profitability indicators are: return on assets (ROA), return on equity (ROE), and net interest margin (NIM). In terms of stability, this can be presented through z-score and capital ratio. The statistical regressions in this study are generalised least squares (GLS) and generalised method of moments (GMM). Using both statistical indicators (GLS and GMM) is highly limited in previous studies. The main results for profitability show that stable banks are typically more profitable than instable banks. Moreover, there is a significant and positive correlation between capital ratio and profits – larger banks obtained higher returns. To achieve GCC Vision 2030, GCC banks may benefit from concentrating on lending services. Furthermore, attracting foreign direct investments can enhance banks’ profits. In contrast, outflow remittances badly affect ROA and ROE. As for the findings of stability, z-score and capital ratio impacted each other significantly and positively. Additionally, larger banks were found to be more risky when compared to smaller banks, and lending services support stability with lower insolvency risks. Finally, ROA significantly and strongly affects both stability indicators (z-score and capital ratio). Using the foreign direct investment (FDI) as an independent variable is a contribution to the performance and stability studies in banking. The result indicates that more FDI leads to better profitability in banking sector. In addition, examining the effects of outflow remittances on performance and stability adds to the knowledge. The outflow remittances decreased ROA and ROE but improve NIM significantly. In general, Islamic banks could achieve more profits (with higher insolvency risks) than conventional banks, and are found to be well-capitalised compared to conventional banks

scholarly journals Comparative Analysis of Banking System Profitability in Western Balkan Countries

2019 ◽  
Vol 2 (2) ◽  
pp. p33 ◽  
Author(s):  
Qazim Tmava ◽  
Fahredin Berisha ◽  
Milaim Mehmeti
Keyword(s):  
Comparative Analysis ◽  
Interest Rates ◽  
Commercial Banks ◽  
Direct Investment ◽  
Banking Sector ◽  
Banking System ◽  
Return On Assets ◽  
Return On Equity ◽  
Macroeconomic Variables ◽  
Balkan Countries

The aim of this paper is to analyze the profitability of the banking sector in the Western Balkan countries. (Note 1) This paper reviews return on assets (ROA) as an indicator of profit and return on equity (ROE) as an indicator of profitability in the banking systems of the respective countries, as well as some other macroeconomic variables that influence them. The main objective of this study is to identify the specific and macroeconomic variables of this industry, that have an impact on the profitability of commercial banks operating in the Western Balkan countries during the 2008-2015 period. Specifically, this paper addresses external indicators (gross domestic product, remittances, foreign direct investment, unemployment), and industry and bank specific indicators (assets, loans, loan-to-deposit ratio, non performing loans and interest rates) that affect the profitability of the banking system in respective countries. Therefore, according to the data generated during the research and the literature review, the profitability of banks measured by the ROA and ROE indicators, regarding the analyzed countries, turns out to be extremely low, especially compared to EU countries where they strive.

Does Trust Matter for Foreign Direct Investment Decisions?

2020 ◽  
pp. 1773-1788
Author(s):  
Sibel Bali Eryigit
Keyword(s):  
Direct Investment ◽  
Emerging Market ◽  
Investment Decisions ◽  
General Level ◽  
Location Decisions ◽  
Foreign Direct Investments ◽  
Cultural Characteristics ◽  
Host Countries ◽  
Foreign Investors ◽  
Factors Affecting

Factors affecting the investment decisions of multinational companies are heavily researched in the literature. However, the number of studies dealing with the socio-cultural characteristics of host countries among these factors is quite limited. Among the cultural characteristics affecting location decisions, one of the primary cultural characteristics is the general level of trust between individuals. In this scope, this chapter intends to research whether the general level of trust in a society has an effect on the location decisions of foreign investors. In line with this objective, an analysis will be conducted by employing the panel data method for 39 emerging market countries for the period between 1998 and 2011. According to the results of the study, a low general level of trust in the host country represents a significant disadvantage for the attraction of foreign direct investments.

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