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    2024-KTQT_C4_FDI_E

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    2024-KTQT_C4_FDI_E

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    Lan Anh
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    4 views12 pages

    2024-KTQT_C4_FDI_E

    Uploaded by

    Lan Anh

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    © All Rights Reserved
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    You are on page 1of 12

    Email: hatran@neu.edu.

    vn

    COURSE:

    INTERNATIONAL ECONOMICS
    Tel: 0886865492

    MSc. Tran Hoang Ha


    International Economics Department
    School of Trade and International Economics

    Get started
    Hanoi, December 2024
    INTERNATIONAL RESOURCE
    MOVEMENTS
    1. Describe the motives for international
    portfolio and direct investments
    2. Describe the effects of portfolio and
    direct investment on investing and
    host countries
    04
    3. Understand the motives and effects of
    international labor migrations

    MSc. Tran Hoang Ha


    Defining Resources
    Govern-
    • [Adam Smith] Resources include land, capital and ment
    labor.
    • [Snowdown and Vane, 2005] Resources can also
    Individuals
    include factors such as Geography and Institutions
    • [Business] Finance / People / Material / Intelligence
    • [Technology] People / Information / Materials / Tools
    and machines / Energy / Capital / Time Corpora-
    =>Resources are not only seen from one aspect but they tions
    are also multi-dimensional

    MSc. Tran Hoang Ha


    There are two main types of foreign investment:
    Portfolio Investment and Direct Investment…

    Foreign indirect investment (Portfolio investment)


    is a type of capital movement between countries, in which capital
    Direct
    owners buy shares, stocks, bonds, and other valuable papers
    through securities investment funds and other intermediary
    financial institutions to investment in the host country.
    Foreign direct investment
    is the movement of capital between
    countries, in which this investor brings Indirect
    capital in money or any assets to another
    country to conduct investment activities.

    MSc. Tran Hoang Ha


    Portfolio Investment (Đầu tư danh mục)
    • Takes place mainly through financial institutions
    (such as banks and investment funds) Stocks
    Passive
    • Engine:
    Ownership
    • Opportunities to earn higher profits abroad
    • Minimize/Diversify risks
    Portfolio
    • Investors must determine for themselves (from Invest- Bonds
    ment
    market knowledge and intuition) average returns
    and likely volatility when deciding which stocks
    to buy. Cash and
    Cash Commo-
    equiva- dities
    lent
    MSc. Tran Hoang Ha
    Direct Investment (Đầu tư trực tiếp)
    • [WTO, 1996] Foreign direct investment (FDI) occurs when an investor
    based in one country (host country) purchases assets in another country Active
    (host country) for the purpose of managing manage those assets Ownership
    • Engine:
    • Opportunities to earn higher profits abroad
    • Minimize/Diversify risks
    • Form:
    • Enterprise with 100% foreign capital 10% threshold
    • Venture business
    (IMF, 2000; WB,
    • Business cooperation contract (BCC)
    2008 UNCTAD,
    • BOT, BTO, BT contracts
    2009)
    • Own shares (> 10%)
    • Mergers and acquisitions (M&A)
    MSc. Tran Hoang Ha
    Direct Investment (Đầu tư trực tiếp) – Theories

    Macro
    Micro

    - The movement of capital serves several - Product life cycle theory (Posner, 1961; Vernon,
    1966)
    goals such as taking advantage of the
    - Internalization theory (Coase, 1937; Buckley and
    host country or market or a third market Casson, 1976): Enterprises can achieve
    (Helpman et al., 2004). internalization benefits through establishing parent-
    - A currency that is weaker relative to the subsidiary and subsidiary-subsidiary networks.
    - Eclectic theory - OLI Paradigm of Dunning (1977,
    currency of a stronger investing country is
    1979, 1981, 1993) => looks for three main factors:
    more likely to attract FDI (Aliber, 1970). (i) market; (ii) resources and (iii) efficiency --- (+)
    strategic assets
    MSc. Tran Hoang Ha
    Direct Investment – Classification
    • According to the flow direction: Inward – Outward
    • Production direction: Horizontal – Vertical
    • Horizontal FDI: production abroad of a differentiated product that is also produced domestically
    • Vertical FDI: to gain control over the required raw materials and thus ensure uninterrupted supply
    at the lowest possible cost
    • Forward vertical FDI: establishing distribution points in the host country to be closer to
    consumers and supply the company's finished products to the host country and/or third country
    markets
    • Backward vertical FDI: processing raw materials or inputs needed in the host country for the
    final product in the home country of the manufacturing enterprise.
    • Conglomerate FDI is a combination of horizontal FDI and vertical FDI

    MSc. Tran Hoang Ha


    INVESTMENT LAW OF VIETNAM

    1987 1996 2005 2014 2020


    Luật đầu tư Luật đầu tư Luật đầu tư Luật đầu tư Luật đầu tư
    nước ngoài nước ngoài (01/07/2006) (01/07/2015) (01/01/2021)
    tại Việt Nam tại Việt Nam
    (09/01/1988) (23/11/1996)

    • Nghị định số 31/2021/NĐ-CP của chính phủ: quy định chi


    Nghị quyết số 50-NQ/TW ngày 20/8/2019 của tiết và hướng dẫn thi hành một số điều của luật đầu tư
    Bộ Chính trị về định hướng hoàn thiện thể chế, • Thông tư số 03/2021/BKH-ĐT: quy định mẫu văn bản, báo
    chính sách, nâng cao chất lượng, hiệu quả hợp cáo liên quan đến hoạt động đầu tư tại việt nam, đầu tư từ
    tác đầu tư nước ngoài đến năm 2030 việt nam ra nước ngoài và xúc tiến đầu tư

    MSc. Tran Hoang Ha


    5 main forms of investment:
    INVESTMENT LAW OF VIETNAM • Enterprise with 100% foreign capital

    The authority to approve projects belongs to the • Joint venture of domestic enterprises - foreign
    National Assembly (Article 30), the Prime enterprises
    Minister (Article 31) and the Provincial People's • Business cooperation contracts – BCC, BOT,
    Committee (Article 32). BTO, BT contracts
    The Ministry of Planning and Investment has the • Own shares
    role of advising, planning, guiding and reporting • Mergers and acquisitions (M&A)
    to the Government; guide ministries, branches 4 regulated areas
    and localities; Manage and supervise • Prohibited industries
    investment activities in Vietnam and investment
    • Encouraged industries;
    abroad of Vietnamese individuals, businesses
    • Conditional industries apply to both domestic
    and organizations (Decree 89/2022/ND-CP
    and foreign investors
    stipulating the tasks and organizational structure
    • Conditional fields only apply to foreign
    of Ministry of Planning and Investment)
    investors
    MSc. Tran Hoang Ha
    Direct Investment – Impacts
    Home countries (givers) Host countries (receivers)

    MSc. Tran Hoang Ha


    PROBLEMS OF FDI
    Crowding-out
    effect (Hiệu
    Technology
    ứng lấn át)
    Transfer-pricing landfill
    (chuyển giá)

    Pollution haven
    Uneven
    Thiên đường ô nhiễm
    distribution Resource
    exhaustion

    MSc. Tran Hoang Ha

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