FDI

Abstract This paper presents a review of nine theoretical models of foreign direct investment (FDI). Discussed are early studies of determinants of FDI (1) as well as determinants of FDI based on the neoclassical trade theory (2), ownership advantages (3), aggregate variables (4), the ownership, location and internalization advantage framework (5), horizontal and vertical FDI models (6), the knowledge-capital model (7), diversified FDI and risk diversification models (8) and policy variables (9). From each of the nine theories, the relevant determinants of FDI are derived. Empirical studies indicate the importance of these determinants in the real world. The paper shows that there is not one single theory of FDI, but a variety of theoretical models attempting to explain FDI and the location decision of multinational firms. Therefore, any analysis of determinants of FDI should not be based on a single theoretical model. Instead, FDI should be explained more broadly by a combination of factors from a variety of theoretical models such as ownership advantages or agglomeration economics, market size and characteristics, cost factors, transport costs, protection, risk factors and policy variables.

There are two major types of international equity flows. In the economic literature there are only few publications in the field of explaining bilateral correlation between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) in a robust analytical framework. We consider Lipsey-Razin model to highlight the major differences between the two types of investments (FDI with better control and supervision versus FPI with less control over domestic firms). The re-allocation of investors between FDI and FPI after European integration is very interesting especially in the context of euro macroeconomic cyclicity which leads welfare parameters an early withdrawal.

The present paper investigates the link between the shadow economy and FDI using the Granger panel causality test. For that purpose we use the shadow economy and FDI data for 145 countries of five data points 1999/2000, 2001/2002, 2002/2003, 2003/2004 and 2004/2005. The system GMM estimation results show that FDI causes the shadow economy and vice versa. The empirical evidence supports the hypotheses that higher FDI causes lower shadow economy and higher shadow economy causes higher FDI.

This paper seeks to elucidate how foreign direct investment in Pakistan is affecting Human Development index in response to the challenges posed by the globalization. It explores the impact of globalization mainly through increased foreign direct investment on the Pakistan’s social and economic sector and its implications for the Pakistan’s economy in future. The paper analyses the data from 1973 till 2004, covering the era of economic and financial liberalization under globalization. The paper will end with a look at the challenges ahead and ways forward.

Globalization and technological innovations create investment opportunities for firms worldwide. In fact, while firms pursue foreign direct investment (FDI) opportunities on a global basis, countries compete to attract these flows. Investment decisions by firms depend on complex and distinct factors. In particular, in the case of foreign investment one of these factors relates to the perception that investors have about the level of risk and/or corruption (or transparency) that characterises countries. Recent studies suggest that corruption negatively impacts on FDI and may act as a disincentive to investment. By using information for 97 countries, concerning inward FDI performance and perceived level of corruption, this paper intends to analyse how corruption influences on the FDI. Given that a certain level of perceived corruption can, in fact, be subject to different subjective evaluations by investors, the paper uses a fuzzy logic approach in order to determine conceivable clust...

With the commencement of the New Economic Policy, 1991, developing countries, particularly those in Asia, have been observing an immense efflux of FDI inflows during the past two decades. The developing and the underdeveloped economies do not have the suf icient level of savings and income in order to meet the required level of investment needed to assist the growth of the economy. In such cases, FDI plays a pivotal role in bridging the gap between the available resources and the required resources. FDI provides a boost to the working of the economy. FDI is considered as a development tool in India which helps in attaining self-reliance in various sectors and also in the overall development of the economy. This paper aims to examine the impact of FDI on the Indian economy, particularly after the economic reforms.

This paper examines the association between government policy interventions, Foreign Direct Investment (FDI) and exports in Taiwan and China by applying the LP (Lumsdaine and Papell, 1997), approach allowing two endogenous structural breaks. This paper further explores the cointegrating relationship between FDI and exports in Taiwan by using the Johansen and Juselius (1990) approach and causal relationships between FDI and exports in both Taiwan and China by using the Granger causality tests respectively. We found that significant trend breaks in the FDI and export time series detected in both countries coincided with extensive government interventions, mainly in the form of Export Processing Zones (EPZ), encouraging FDI during a transition period from import substitution to export orientation. The results emerging from our research indicate no long-run cointegrating relationship in Taiwan and one-way causal relationship flows from exports to FDI in China and FDI to exports in Taiwa...

India’s economic reform since 1991 has been catalyst in shaping the performance of the economy. No doubt the economy has been brought to a higher growth trajectory and minimized many of the apparent inefficiencies that were persistent before the reform; however, there are new challenges in the process and backlashes in various areas. This volume highlights the post-reform performance of Indian economy in various sectors and the growth and development challenges thereof. In particular, the book addresses the performance and challenges in agriculture, industry and service sectors; and the development issues such as poverty and human development in the context of the economic reform. This book is an authoritative guide to India’s growth and development after economic reform and challenges thereof. This book will interest the students of economics and development studies, academics, researchers, policymakers, analysts and general readers.

The present study investigated the causal relation among foreign direct investment, economic growth and trade openness in India for the period 1970–2019. Johansen Cointegration test indicates the presence of long-run association among the variables. The results of vector error correction model indicated the presence of long-run causality runs from FDI to GDP and trade openness. Moreover, the empirical evidence revealed short-run unidirectional causality from economic growth to FDI and the bidirectional causality among trade openness and FDI in the short-run. The findings were constant, as Indian economy has been undergoing a steady economic growth during the few decades and the volume of FDI also surged to substantial extent with minor leaps and bounds. has increased to a significant extent with minor leaps and bounds.

In this paper we investigate to what extent tax incentives are effective in attracting investment in Sub-Saharan Africa. We test the neo-classical investment theory prediction that tax incentives, by lowering the user cost of capital, raise investment. Next to tax incentives, we also estimate the impact on investment of other investment climate variables that are under direct control of the government, such as the transparency and complexity of the tax system, and the legal protection of foreign investors. In developing countries these variables might be as important as or even more important than the tax variables themselves. Therefore, we analyze the policy changes in tax incentives and in the other investment climate variables for 12 CFA Franc Zone countries over the period 1994–2006. Because of their common currency (the CFA Franc) and common language (French) these countries constitute an exceptional basis of comparison to evaluate their ‘policy experiments’. The use of panel data econometrics with fixed country and year effects allows us to isolate the impact of the policy changes on investment, as if it were a difference in differences analysis with multiple policy changes. We find no robust positive relationship between tax holidays and investment in the CFA Franc zone. However, increasing the number of legal guarantees for foreign investors and reducing the complexity of the tax system helps to attract investment.

Abstract: Published research on Industrial Revolution 4.0 (IR4.0) is centered around conceptualization and public policy announcements, staying largely esoteric and under-explored. However, with Covid-19 Lockdowns creating an economic crisis out of a health crisis, India will put its IR4.0 strategy on fast-track to play a meaningful role in the global supply chain rivalling Indonesia and Philippines. The current study analyzes FDI inflows to India between 2013-14 and 2018-19 using a GLM repeated measures model to uncover insights regarding industry verticals and investor countries that offer future business opportunities. The study found that FDI inflows to India are volatile and though USA is a large investor there are no significant differences among investor countries. Rather than manufacturing, service sector attracts FDI and India’s IR4.0 strategy can be built on software development for industrial IoT, human-machine interface technologies and collaborative software. Indian businesses should improve their financial performance by deleveraging. It is also pertinent that public policy focuses on improving business environment and plan out the structural changes that will occur with IR4.0 addressing the employment and skilling threats.

This paper discusses Japanese motor vehicle manufacturing investment and state intervention measures in the Australian market. Australia’s auto industry is an extension of global motor vehicle manufacturers with a small number of domestic manufacturing firms that form a part of the global supply chain.  Toyota Motor Corporation, Mitsubishi Motor Corporation, General Motors Corporation and Ford Motor Company all have had extensive investments in the Australian market.  In the past, the Australian market was also a host to investments from Volkswagen AG, Chrysler LLC, Nissan Motor Company Limited and British Leyland Motor Corporation.  The size of the industry has shrunk recently with the March 2008 shut down of manufacturing by Mitsubishi Motors Australia Limited (MMAL), not long after the company’s emergence from a long and significant restructuring.  Still, the auto industry remains the largest single manufacturing sector in Australia both in terms of investment levels and the number of people employed.  Thus, Japanese auto manufacturing investment in Australia require an evaluation, now that the federal government has completed the 2008 ‘Review of Australia’s Automotive Industry’.  The paper focuses on Toyota Motor Corporation Australia (TMC Australia) in Victoria and (the recently shut down) MMAL in South Australia.

In India the issue of transition from pre-capitalist agrarian societies to capitalism has produced many controversies among the Marxist theoreticians. Various depictions of Indian agrarian transition have been attempted, either theoretical or empirical in nature. However, the crucial element of the debate is the diverse nature of agrarian transition that can or has been traversed. This study concentrates on the various expositions and underlying theoretical framework to get a clear knowledge on the issue of agrarian transition, mode of production and undergoing class differentiation in India.

This paper looks at the historical processes that influence the indigenisation and economic empowerment programme (IEEP) adopted by the Government of Zimbabwe (GoZ) and identifies the potential trickledown benefits, constraints and alternative emphasis/models to the current programme. Targeted participants were drawn from the government ministries, industry, economists, community leaders, youths, employees, and the general public. We superimpose the employee/community share ownership schemes (E/CSOSs) and youth development fund (YDF) models of the IEEP on the sustainable livelihoods framework (SLF) in evaluating the broad based and long-term sustainability nature of the programme. Results show that the programme adds to similar Malaysian & South African initiatives and is appreciated by the majority of targeted beneficiaries though its position as a priority has been obscured by urgent needs for better service delivery and industry revival. The E/CSOSs and the YDF launched under the IEEP fit well into the tenets of the SLF, while direct equity acquisitions through indigenous partners seem to create a ‘cappuccino’ analogy as it favours the connected and economically viable individuals. We recommend tight monitoring through the established national indigenisation and economic empowerment board (NIEEB), increased emphasis on procurement and supply, capital mobilisation and capacity building for the youth entrepreneurs, increased awareness to the general populace and flexibility in the 51% equity compliance period to ensure FDI attraction.

Key Words: IEEP, GoZ, SLF, ESOS, CSOS, YDF, NIEEB, FDI

Nguyen Tuan Anh; Nguyen Van Anh - EXPERIENCE OF USING FDI IN CHINA'S INDUSTRIAL STRUCTURE FOR VISEGRÁD COUNTRIES (V4)
ECONOMICS, BUSINESS, INNOVATIONS: Proceedings of the XVIII International Scientific and Practical Conference. – Penza city (Russia): ICNS "Science and Education". - 2022. - 156 pages. ISBN 978-5-00173-250-1.

The fund for Foreign Direct Investment (FDI) is globally limited and overstretched. Therefore, Nepal needs to go the extra mile in offering a competitive investment environment to attract FDI flows into Nepal’s hydropower development. It literally means that our investment policies and laws should be more competitive compared to that of other countries like Vietnam, Cambodia and Bangladesh etc.DOI: http://dx.doi.org/10.3126/hn.v14i0.11256HYDRO Nepal JournalJournal of Water, Energy and EnvironmentVolume: 14, 2014, JanuaryPage: 41-42 

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