scholarly journals Determinants of foreign direct investment in advanced business services

2020 ◽  
Vol 70 (3) ◽  
pp. 407-421
Author(s):  
Artur Klimek
Keyword(s):  
Foreign Direct Investment ◽  
Multinational Corporations ◽  
Direct Investment ◽  
Negative Binomial ◽  
Negative Binomial Regression ◽  
The European Union ◽  
Skilled Workers ◽  
Business Services ◽  
Firm Level ◽  
Foreign Companies

AbstractThis paper is aimed at investigating determinants of recent flows of foreign direct investment (FDI) into advanced business services (ABS) in the European Union with the distinction between “old” (till 2004) and “new” member states (after 2004 extension). Special attention is put on the Visegrád countries. The factors affecting location decisions of multinational corporations were analysed at the national and regional level. The latter approach proved to be very effective due to the fact that foreign companies operating in ABS are highly unequally distributed across economies. Indeed, there are only few regions in economies attracting bulk of the operations in ABS.The research method applied in the paper is negative binomial regression, which measures the probability of occurrence of an ABS foreign firm in an economy or a region taking into consideration its characteristics. This research combines macroeconomic, regional and firm-level data. The explanatory variables are divided into two groups: demand and supply. The main conclusion is the high significance of the supply factors. In other words, foreign companies focus on locations offering large number of skilled workers at reasonable prices. The key recommendation for governments interested in attracting ABS type of investment is to focus on the quality of human capital.

scholarly journals Agglomeration Economies and Foreign Direct Investment in Advanced Business Services in Poland

2018 ◽  
Vol 54 (1) ◽  
pp. 69-79
Author(s):  
Artur Klimek
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Negative Binomial ◽  
Focal Point ◽  
Negative Binomial Regression ◽  
Agglomeration Economies ◽  
Point Of View ◽  
Outcome Variable ◽  
Business Services ◽  
Explanatory Variables

Abstract For many years, services attracted most of the foreign direct investment (FDI) in Central and Eastern European countries. Recently, a distinctive type of business services, i.e., advanced business services (ABS), has become the focal point in FDI in the region. This paper is aimed at defining the role of agglomeration economies in FDI in ABS in Poland. The topic is important from the policy point of view, as foreign investment is supported by the host country’s authorities, and various incentives are provided. The research method applied in this paper is the negative binomial regression. The outcome variable was the number of firms operating in ABS in particular regions. Explanatory variables pertain to the characteristics of 16 regions classified as Level 2 under the Nomenclature des Unités territoriales statistiques (Nomenclature of Territorial Units for Statistics or NUTS) in Poland. The main conclusion of the research is that agglomeration economies are important in the decision of the firms investing in ABS in Poland. The most important factor is the concentration of supply factors, such as abundance of educated employees. The specific features of ABS are associated with lower importance of demand factors in a region.

The Distributional Consequences of Preferential Trade Liberalization: Firm-Level Evidence

2017 ◽  
Vol 71 (2) ◽  
pp. 373-395 ◽  
Author(s):  
Leonardo Baccini ◽  
Pablo M. Pinto ◽  
Stephen Weymouth
Keyword(s):  
United States ◽  
Foreign Direct Investment ◽  
International Trade ◽  
Multinational Corporations ◽  
Direct Investment ◽  
Trade Agreements ◽  
The United States ◽  
Firm Level ◽  
Preferential Trade ◽  
Distributional Consequences

AbstractWhile increasing trade and foreign direct investment, international trade agreements create winners and losers. Our paper examines the distributional consequences of preferential trade agreements (PTAs) at the firm level. We contend that PTAs expand trade among the largest and most productive multinationals by lowering preferential tariffs. We examine data covering the near universe of US foreign direct investment and disaggregated tariff data from PTAs signed by the United States. Our results indicate that US preferential tariffs increase sales to the United States from the most competitive subsidiaries of multinational corporations operating in partner countries. We also find increases in market concentration in partner countries following preferential liberalization with the United States. By demonstrating that the gains from preferential liberalization are unevenly distributed across firms, we shed new light on the firm-level, economic sources of political mobilization over international trade and investment policies.

scholarly journals Environmental Regulations, Competition and Divestment of Foreign Direct Investment: Evidence from China

2021 ◽  
Author(s):  
Lufeng Tai ◽  
Linnan Yan
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Negative Impact ◽  
Environmental Regulations ◽  
Foreign Firms ◽  
Mechanism Analysis ◽  
Firm Level ◽  
Foreign Companies ◽  
Empirical Significance ◽  
Exit Probability

Abstract This paper is concerned with whether the Chinese increasingly stringent environmental regulations (ER) lead to the divestment of foreign direct investment (FDI). Based on industrial firm-level panel data from 2003 to 2010, our results show that the stricter ER do not induce the divestment of FDI but rather reduce the probability of foreign firms’ withdrawal from China. Moreover, in cities with a higher degree of marketization, the ER have greatly reduced the exit probability of foreign firms. The mechanism analysis shows that due to the scale and technological advantages of foreign companies, the ER have stimulated innovation, increased the market share and profits of foreign companies. However, the ER have a greater negative impact on domestic firms’ performance. This research has theoretical and empirical significance for the economic development and environmental protection of developing countries.

scholarly journals Foreign Direct Investment and Technology Transfer: Knowledge Spillover in the Manufacturing Sector in Indonesia

2017 ◽  
Vol 18 (1) ◽  
pp. 57-70 ◽  
Author(s):  
Horas Djulius
Keyword(s):  
Foreign Direct Investment ◽  
Technology Transfer ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Manufacturing Sector ◽  
Critical Factor ◽  
Knowledge Spillover ◽  
Firm Level ◽  
Foreign Companies ◽  
Domestic Companies

Knowledge spillover, as a form of technology transfer from foreign direct investment (FDI), has frequently been investigated in the contexts of various countries. This study aims to examine whether the availability of labour working for foreign companies could trigger improved productivity of the companies’ domestic workers. It also aims to investigate the horizontal and vertical spillovers that might occur, formally or less formally, and to discover whether specialization and industrial competition play a role in facilitating knowledge spillover in Indonesia’s manufacturing industry. What differentiates this study from previous similar studies is our investigation of whether or not the business orientation and intensity factors of domestic companies could be catalysts for knowledge spillover. To examine this, we use firm-level data and econometrics modelling to test our hypotheses. An important finding of this study is that the export orientation of domestic companies is a critical factor in promoting knowledge spillover.

scholarly journals Offshoring of white-collar jobs: theory and evidence1

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Artur Klimek
Keyword(s):  
Foreign Direct Investment ◽  
Czech Republic ◽  
Multinational Corporations ◽  
Direct Investment ◽  
Logistic Model ◽  
Formal Model ◽  
White Collar ◽  
Business Services ◽  
Multinomial Logistic Model ◽  
Foreign Affiliates

Abstract Foreign direct investment (FDI) in advanced business services (ABSs), referred to here as the offshoring of white-collar jobs, has become one of the major developments in the operations of multinational corporations (MNCs). However, a specific theoretical approach to this phenomenon has not been adequately defined. In this article, we have two objectives. The first objective is to outline the key elements of the theoretical framework and introduce a simple formal model for business services within MNCs. The second objective is to verify the assumptions of the model in the empirical part. We use the sample of the largest European companies having foreign affiliates. Special attention is paid to Visegrád economies (i.e. Czech Republic, Hungary, Poland, and Slovakia) as host economies. We applied here a multinomial logistic model, which indicates the probability of having an ABS subsidiary taking into consideration the characteristics of MNCs.

scholarly journals Exploring the significance of domestic investment for foreign direct investment in China: A city-network approach

Urban Studies ◽  
2018 ◽  
Vol 56 (12) ◽  
pp. 2447-2464 ◽  
Author(s):  
Shuai Shi ◽  
Ronald Wall ◽  
Kathy Pain
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Negative Binomial ◽  
Geographic Distance ◽  
Positive Association ◽  
Negative Binomial Regression ◽  
Negative Binomial Regression Model ◽  
Domestic Investment ◽  
Network Approach ◽  
Chinese Cities

This article uses a network approach and a negative binomial regression model (NBRM) to shed light on the association between Domestic Investment (DI) and Foreign Direct Investment (FDI) in interlinking Chinese cities in a space of flows. The empirical analysis is based on 2743 FDI and 9315 DI projects covering 77 Chinese cities. We address the question of what the association is between DI network measures and city attractiveness for FDI, and if the geographic distance of DI matters. While the physical distance of DI activity is found to have a negative association with FDI, city functional proximity and structural position in the DI network are found to have a positive association. We conclude that strategic policies to stimulate cross-territorial economic ties between Chinese cities should be advantageous in attracting inward foreign investment.

Influence of foreign direct investment on domestic investment in the Russian economy

2020 ◽  
pp. 69-85
Author(s):  
I. M. Drapkin ◽  
S. A. Lukyanov ◽  
A. A. Bokova
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Crowding Out ◽  
Domestic Investment ◽  
Empirical Estimation ◽  
Negative Effects ◽  
Firm Level ◽  
Foreign Companies ◽  
Russian Economy ◽  
The Government

The paper is devoted to the empirical estimation of the effects of foreign direct investment (FDI) on domestic investment in the Russian economy. The results suggest that there are crowding-out effects of FDI on the Russian economy. Using the firm-level database for 2008—2017, we analyze the presence of foreign companies in the Russian economy on the region, industry and industry in region levels. On the regional level the statistically significant effects of crowding out domestic investment are identified for state-owned, large as well as less effective companies. On the industry level the negative effects of crowding out are observed in case when FDI share in the industry exceeds 25. Estimating the effect of FDI presence on the industry in the region level, we reveal crowding out effects mainly for private and more effective national companies. Analyzing the effects in case of different levels of FDI in the economy, we do not find support for the hypothesis of adaptation of national companies for foreign companies’ presence in the economy. The paper suggests that the government policy in FDI regulation should focus on mitigation of the effects of pushing national companies off the market, and also creating conditions for cooperation of foreign and domestic companies.

scholarly journals AN ANALYSIS OF THE ECONOMIC DETERMINANTS AND THE QUALITY OF THE INSTITUTIONAL FRAMEWORK AS FACTORS TO ATTRACT FOREIGN DIRECT INVESTMENT IN SOUTHEASTERN EUROPE: THE CASE OF GREECE

2020 ◽  
Vol 7 (1) ◽  
Author(s):  
Constantinos CHOROMIDES
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Critical Factor ◽  
The European Union ◽  
Firm Level ◽  
Economic Determinants ◽  
Level Data

Foreign Direct Investment (FDI) is considered by researchers as a critical factor for economic growth and development since they have shown a positive relationship between FDI and economic growth. The recent economic crisis in the European Union (EU) has brought up again the discussion of the key drivers specific to the attraction of FDI. In addition to strict economic factors the literature emphasizes the role of institutions in a country as determinants in attracting FDI inflows. An analysis of the role that the quality of institutions in attracting FDI has in Greece is attempted using an econometric model on institutional, regulatory, country specific and firm level data. For the purpose of giving a regional dimension in the analysis, and for attempting a comparison of the findings, the analysis focuses besides Greece, in two other Southeastern European countries (SEE), Bulgaria and Romania, being two new member states of the EU.

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