The Impact Pathways of Digital Transformation on Outward Direct Investment in Shandong Province's Manufacturing Sector

Nearly all developing countries actively seek capital and technology from the advanced countries. Although private direct foreign investment (mainly in the form of multinational enterprise) is viewed with ambivalence by many developing countries, it is nonetheless true that direct investment remains a substantial source of capital and is sometimes the only source of specific technologies. Indeed, given the slow growth in official external assistance, developing countries are becoming more, not less, dependent on direct foreign investment. While disbursements of official development assistance by the OECD countries rose 43% from 1961 through 1970, direct investment flows rose almost 90% over the same period. In the later year, the flow of direct investment was more than two-fifths of all official assistance, $3.2 billion compared to $7.8 billion.1 Furthermore, the United States and other major capital exporting countries would prefer, for economic as well as ideological reasons, to channel more of their capital outflows to developing countries through private investment. It is highly probable, therefore, that developing countries will continue to rely on direct foreign investment in the foreseeable future to carry out their development programs. It is against this background that the present study seeks to identify the empirical determinants of direct foreign-investment flows in the manufacturing sectors of developing countries. Our purpose is to select from the many economic, social, and political features of a developing country those features that are critical to making that country attractive or unattractive to private foreign investors. Available empirical studies are limited

PurposePrevious studies have reached inconsistent conclusions on foreign direct investment (FDI) technology spillovers and corporate innovation. The main purpose of this paper is to explore the technological spillover effects of FDI from the microperspective of firm linkages induced by geographic distance. Further analysis is conducted on the impact and mechanism of this spillover on the innovation quality of Chinese enterprises. The conclusions drawn from this paper can guide Chinese enterprises' foreign capital utilization and innovation strategy choices.Design/methodology/approachUsing the data of China's A-share listed companies from 2009 to 2019, this paper explores the role of FDI technology spillover in enterprise innovation quality through a two-way fixed-effect model. The robustness of the results is proven by substituting variables, adding industry fixed effects and excluding high-profit groups, and further using the two-stage least squares (2SLS) method to alleviate the empirical endogeneity problem.FindingsThese findings indicate that FDI technology spillover based on geographic proximity has a positive impact on the innovation quality of Chinese enterprises. However, there are different impacts for different types of enterprises. FDI technology spillover has a positive impact on the innovation quality of non-state-owned enterprises (non-SOEs) and small- and medium-sized enterprises (SMEs), while it has no effect on state-owned enterprises (SOEs) and large enterprises. The authors also find that the degree of financing constraints and R&D investment are important transmission mechanisms between FDI technology spillover and enterprise innovation quality.Research limitations/implicationsThis study ignores industry characteristics when considering foreign enterprises around Chinese enterprises. In fact, technology spillover effects differ across industries. When the authors matched microdata to regions, only the provincial level was considered. Therefore, there is still room for further research. In future research, the authors should consider industry characteristics and group foreign enterprises and Chinese enterprises in the same industry and in different industries to explore industry differences in technology spillover. In addition, when matching corporate data to regions, the authors can match to the city level and draw city-level conclusions.Practical implicationsThis study is different from previous studies that focus on the quantity of enterprise innovation or innovation output. The authors focus on the role of technological spillovers in the quality of Chinese enterprise innovation, enriching research in the field of enterprise innovation quality. In addition, the current FDI technology spillover indicators are technically difficult to measure at the micro level. The authors draw inspiration from the theory of the geographical structure of financial supply and combine the creation methods of macro and micro indicators in existing articles in other fields. The authors ingeniously construct a new FDI technical spillover indicator. This indicator combines the commonly used regional FDI technology spillover with the geographic proximity of enterprises at the microlevel by constructing an interaction term between the two. This indicator not only alleviates the endogeneity problem to a certain extent but also has implications for future research in the field of FDI technology spillovers at the micro level.Social implications(1) FDI technology spillovers are an effective way to improve the innovation quality of local enterprises, especially for non-SOEs and SMEs. Therefore, The authors suggest that in the context of dual circulation, the Chinese government should continue to open wider to the outside world and encourage foreign enterprises to invest in China. (2) In future development, managers of SOEs and large enterprises should create an innovation incentive mechanism. Moreover, they should change their vertical management structure and make full use of their policy advantages and budget advantages to increase innovation activities. In the process of acquiring technology spillovers, enterprises need to solve their own financing constraints.Originality/valueFirst, this study solves a technical problem. It is technically difficult to measure the current FDI technical spillover indicators at the micro level. This study innovatively constructs a new FDI technology spillover indicator that combines regional FDI technology spillovers with the microperspective of the geographical proximity of enterprises. This approach not only alleviates certain endogeneity problems in the empirical evidence but also enriches relevant research in the field of technology spillover. In addition, this study focuses on the impact and mechanism of this spillover, which addresses the current research gap among previous studies that mainly focus on innovation quantity and ignore innovation quality.

Essays on China's Outward Foreign Direct Investment

Environmental regulation, Foreign investment behavior, and carbon emissions for 30 provinces in China

Outward foreign direct investment has been growing fast in China over the past decade. Outward foreign direct investment influences home country employment through substitute effect and supplemental effect. This paper analyzed the mechanism of how outward foreign direct investment changes home country employment. The empirical studies examined the relation between China’s outward foreign direct investment, with employment quality and quantity. The result indicates a positive relation exists between outward direct investment and employment, both in employment rate and average wages. As for comparison, this study also examined home country employment effect in Euro area. The empirical analysis suggests that there is no significant impact of outward foreign direct investment in home country employment in Euro area. As an emerging economy undergoing structural reform, employment quantity and quality in China benefit from outward foreign direct investments. Keywordsoutward foreign direct investments; employment; substitute effect; supplementary effect

The role of state policy in the industrialization of Third World nations has become the subject of increasing interest in recent years. In the past, the debate over economic development has either focused on the traditional modernization approach' or the dependency theory of underdevelopment.2 Dependency theorists base their model of development on the belief that foreign investment from core countries is harmful to developing nations' long-term economic growth. Economic relationships between the core and the periphery are structurally detrimental for the latter because of the inherent dynamics of international capitalism. Yet, despite the claims of dependency theory, the recent experience of the East Asian newly industrialized countries suggests a wider range of development possibilities which include government policies specifically designed to attract foreign investment. These countries appear to have structured their domestic economies in order to mitigate the pernicious effects of dependent relationships with core countries. This raises new questions about the development process and the role of policy and foreign investment in the economic transactions between core and peripheral countries. Dependency theory, a neo-Marxist predecessor of world-systems research, claims that First World nations become wealthy by extracting surplus labor and resources from the Third World. Capitalism perpetuates a global division of labor which causes the distortion of developing countries' domestic economies, declining growth, and increased income inequality.3 Those countries on the periphery cannot become fully modernized as long as they remain in the capitalist world

The purpose of this paper is to identify, using the framework of a statistical model, the extent to which policy changes in Canada specifically directed toward inward foreign direct investment (FDI) have influenced both capital outflows to Canada and capital outflows from Canada. The paper adds to the literature concerned with how public policies targeted specifically at FDI have altered capital inflows, and uniquely links such policies to outward direct investment (ODI). We examine specifically the effects of major policy changes toward FDI implemented by the Canadian government over the period 1950-1995. In Canada's case, free-trade agreements (FTA and NAFTA) appear to have significantly increased levels of inward and outward foreign direct investment; however, Canada's attempt to screen FDI via the Foreign Investment Review Agency (FIRA) had no significant effects on either FDI or ODI.

The emergence of the Chinese economy, which has grown rapidly since the late 1970s, has increased the country's demand for natural resources. China's demand surplus for raw materials has made it increasingly dependent on the global supply of raw materials and energy (Cheng & Zihui, 2007). Throughout this period, policymakers in China's central government understood the importance of being open to the global economy, first as receivers of inward foreign direct investment (FDI) and, more recently, also as a provider of outward direct investment (ODI). China is well known for its central planning and control in economic issues (Scott, 2002), especially of ODI. Although formal regulation of ODI has been eased since 2002 (Sauvant, 2005), China's central government still maintains significant formal and informal control over the goals and amount of Chinese ODI (Buckley, et al., 2007). Cheng & Ma (2007) argue that the bulk of China's FDI comes from the country's state-owned enterprises (SOEs), in particular the large multinational companies that are administered by the Central Government's ministries and agencies. The central government SOEs' share of FDI flows in 2003–2005 were 73.5%, 82.3%, and 83.2%, respectively. Their shares of FDI stocks by the end of 2004 and 2005 were 85.5% and 83.7% respectively.

Cross-country evidence indicates that Japan hosts little inward foreign direct investment (FDI), even after taking into account its size and geographical or cultural distance from potential investors. Hoshi (2018) is a judicious empirical assessment of the impact of Abenomics on Japan's ability to attract inward FDI, and, by extension, increase the nation's rate of economic growth. Hoshi reaches a skeptical conclusion as to whether Abenomics has contributed to increasing inward FDI. The Abenomics target goal for FDI may be attained, but according to Hoshi's analysis, the goal has been set too low and its achievement does not require any positive impact of Abenomics policies. That skepticism may well be justified. However, before accepting this conclusion it may be worth making the simple observation that insufficient time may have elapsed for the effects of Abenomics to manifest. The policy initiative was first announced in 2013, but some of the measures discussed in the present paper were introduced as recently as May 2016. It is possible that Abenomics will eventually work as intended, but it is just too early to tell. Hoshi correctly observes that from a theoretical perspective the impact of inward FDI flows on growth is ambiguous and the empirical literature generally concludes that inward FDI flows are only growth-enhancing conditional on financial sector development and outward orientation. The latter is particularly important, insofar as a plausible theoretical example of immiserizing capital inflows is FDI induced into a protected capital-intensive import-competing sector (Bhagwati & Srinivasan, 1983). The samples used by much of the empirical literature cited by Hoshi include developing countries where capital inflows into a protected sector of comparative disadvantage is a real problem, or are restricted to FDI into the manufacturing sector. Therefore, it is not evident that this cross-country evidence is entirely applicable to Japan. While exchange in differentiated products is pervasive in modern economies, one would not necessarily expect Japan to gain a lot from foreign investment in its dominant sector either directly or via interfirm externalities and spillovers. Yet even in this relatively inauspicious setting, analysis of firm-level Japanese data indicates that there are significant benefits to foreign investment in the manufacturing sector. The positive result for manufacturing suggests that the gains for Japan from investment in its lagging service sector, which has traditionally been sheltered via regulation from entry by either new domestic or foreign service providers, could be even more profound (Fukao, 2013). It is partly due to this lack of local presence by foreign service providers that historically Japan has been a dramatic outlier relative to other major industrial countries in the share of domestic sales accounted for by foreign firms (Bergsten & Noland, 1993). Given the relatively scant presence in Japan of foreign service providers, and Japan's evident competitive challenges in the service sector, increased inward FDI in the service sector could have a significant impact on domestic productivity, and, at least during a transitional period, the economic growth rate, thus fulfilling the promise of Abenomics. So, how could Abenomics increase FDI into Japan? Discouragingly, many of the robust correlates with inward FDI identified in Hoshi's paper such as physical and cultural remoteness, and parent gross domestic product (GDP) and per capita GDP, are exogenous and not susceptible to policy intervention. And even more discouragingly, there appears to be a disconnect between the conditions amenable to policy intervention that might promote FDI and what the government is doing. One approach could be a sharper, if not targeted, approach to inward FDI which would emphasize the removal of barriers to entry in the service sector. A government survey summarized in Hoshi (2018, Table 1) found that the "high cost of doing business" was the single most frequent complaint, with three-quarters of the respondents identifying it as a barrier to FDI. Apart from regulation, capital and labor market imperfections could be important. Addressing labor market policies that discourage interfirm labor mobility appear to be particularly salient. It is striking that among the factors inhibiting FDI into Japan listed in Hoshi's Table 1, "difficulty in securing personnel" is the only one that increased significantly between the 2012 and 2016 surveys, rising more than 10% points to 46%, indicating that the problem is both important and worsening. Such an approach of addressing basic factor market and regulatory inhibitions on business, would not only benefit potential foreign entrants, but could also contribute to revitalizing domestic entrepreneurship by making it easier to establish – and expand – vibrant new businesses (Noland, 2007), precisely the sort of structural change that the third arrow of Abenomics is supposed to promote.

Ülkelerin giderek daha fazla liberal politikaları benimsemeye başlamasıyla beraber gerek doğrudan yabancı yatırımlar gerekse portföy yatırımları dünya genelinde artmaya başlamıştır. Yabancı yatırımlar olarak adlandırılan bu tür yatırımları ülkeler kendilerine çekmek için çaba harcamaktadırlar. Daha çok gelişmekte olan ülkeler açısından önemli olduğu düşünülen yabancı yatırımlar, gelişmiş ülkeler tarafından da önemle talep edilmektedir. Bu çalışmanın amacı hem gelişmiş hem de gelişmekte olan ülkelerde doğrudan yabancı yatırımların büyüme ve işsizlik üzerinde, portföy yatırımlarının ise büyüme üzerindeki etkilerini araştırmaktır. Yabancı yatırımların gelişmiş ülkeler ile gelişmekte olan ülkelere olan etkilerinin de karşılaştırıldığı bu çalışmada; 15 gelişmiş, 15 gelişmekte olan ülke seçilmiş bu ülkelerin 1993-2018 yılları arası yıllık verileri kullanılarak panel veri analizi yöntemi ile incelenmiştir. Analiz sonuçlarına göre, doğrudan yabancı yatırımların hem gelişmiş hem de gelişmekte olan ülkelerin büyüme oranlarını artırdığı, işsizlik oranlarını ise azalttığı sonucuna ulaşılmıştır. Buna karşın portföy yatırımlarının gelişmiş ve gelişmekte olan ülkelerin büyüme oranları üzerinde istatistiksel olarak bir etkisi görülmemiştir. Ayrıca doğrudan yabancı yatırımların; gelişmekte olan ülkelerin büyüme oranlarının artmasına ve işsizlik oranlarının düşmesine sağladığı katkının, gelişmiş ülkelere sağladığı katkıdan daha fazla olduğu sonucuna ulaşılmıştır. Bu kapsamda doğrudan yabancı yatırımları çekmek isteyen ülkeler açısından; bürokratik engellerin azaltılması, çeşitli teşviklerin sağlanması, altyapıların iyileştirilmesi, yatırım yapmak isteyen şirketlere organize sanayi bölgelerinden bedelsiz ya da düşük bedellerle yer sağlanması ve enerji desteği gibi uygulamalar doğrudan yabancı yatırım girişlerini arttıracak faktörler olarak düşünülebilir.

Foreign Direct Investment In Africa: Rhetoric and Reality Paul Bennell (bio) It is now widely recognized that the future development of sub-Saharan Africa (SSA) depends considerably upon the success of individual economies in attracting relatively large inflows of foreign direct investment (FDI) into high potential growth sectors. This is not only because of the general paucity of investment resources, exacerbated by the debt crisis facing many countries, but also because FDI brings with it the new technologies and related skills essential for sustained export-led economic growth. Without the inflow of FDI, there is a real danger that SSA economies will fail to become internationally competitive and as a result, will remain at the margins of an increasingly integrated global economy. During the 1960s and 1970s, the majority of newly independent African governments adopted socialist or quasi-socialist development strategies. Even in the more pro-capitalist countries, most notably Côte d’Ivoire and Kenya, politicians and senior policymakers were often wary about foreign capital, fearing it might assume a dominant position in strategically important economic sectors. SSA governments nationalized many foreign companies during this period while channeling scarce capital resources into establishing or enlarging state-owned enterprises, particularly in the industrial sector. Multinational corporations were generally regarded as an increasingly dominant and pernicious form of international capitalist exploitation. Consequently, governments imposed a battery of regulations on FDI [End Page 127] which deterred all but the most determined investors. However, once governments started to introduce pro-market and thus pro-private sector ‘structural adjustment’ polices from the early and mid-1980s onward, official attitudes toward FDI also began to change. This change was further encouraged by mounting evidence of the positive role FDI played in the Asian tigers’ economic transformation. Earlier socialist development strategies emphasized national self-reliance. Dependence on foreign capital and international trade was seen as perpetuating ‘underdevelopment.’ By contrast, the now hegemonic neo-liberal, pro-capitalist development paradigm is based on the fundamental proposition that both developed and developing countries can only achieve long run sustainable growth through global economic integration. Increased exports and FDI, therefore, play a vital role in facilitating the integration process. Most African governments are now implementing comprehensive economic reform programs. By the mid-1980s, the need for reform had become overwhelming because of deep-seated and protracted economic crises. Real per capita incomes plummeted in most countries, and export production, still heavily based on primary commodities, was in a parlous state of decline. The first phases of the usual IMF/World Bank-designed structural adjustment programs concentrated on correcting basic macro-economic distortions, namely massively overvalued exchange rates, out of control inflation, and huge budget deficits (typically more than 10 percent of gross domestic product). By the early 1990s, having achieved considerable progress on the macro-economic front, officials began to focus attention on more fundamental structural impediments to growth and poverty alleviation. In particular, most SSA countries now need to downsize and comprehensively restructure the public sector which has largely dominated economic life since political independence. At the same time they must support private sector development. Consequently, privatizing state-owned enterprises, developing local entrepreneurial skills, and injecting foreign capital and skills now top the economic reform agenda. The purpose of this short article is to describe and explain major trends in FDI since the start of economic reform programs in sub-Saharan Africa, and then to consider the short- and medium-term prospects for foreign investment throughout the continent. The following section begins with a summary of the most important [End Page 128] indicators of FDI involvement, namely net investment inflows, net income, and rates of return, and the number of subsidiaries or affiliates and employees of foreign-owned companies in SSA. It subsequently considers the main reasons for the as yet limited increase in FDI. The final section then discusses the key factors that are likely to influence future levels of foreign investment. South Africa has been excluded from the discussion mainly because its economy is so much larger and more sophisticated than any of the other SSA economies. Prospects for FDI in South Africa, a semi-industrial, highly urbanized country, must be considered separately. Any assessment of recent...

L'A. s'efforce de mesurer l'impact economique de la penetration du capital et de l'investissement etranger sur l'economie des pays en voie de developpement. Il examine et critique le mode d'evaluation de la production propose par W. J. Dixon et T. Boswell. Il estime qu'il convient de distinguer investissement local et investissement etranger. Il presente les differents types d'interpretation et etudie un certain nombre de donnees collectees concernant le Panama, la Jamaique, le Liberia, la Guinee et enfin Trinidad et Tobago. Il se demande, d'une part, si l'investissement local et preferable a l'investissement etranger et, d'autre part, si ce dernier appauvrit les pays en voie de developpement. Il s'interroge sur le bien-fonde de la theorie de la dependance

A nation's pace of economic growth in the South Caucasus region is directly influenced by the volume of foreign direct investment (FDI) it gets. This research project examines the effects of foreign direct investment (FDI) on economic growth and stability, with a focus on the three nations of Armenia, Azerbaijan, and Georgia. This research seeks to understand three important aspects: the trends in FDI influx; the industries that draw the highest concentrations of FDI; and the societal consequences of FDI. Examining these three crucial facets of the whole is the aim of this study. The goal of this study is to look at the trends in foreign direct investment (FDI), with an emphasis on the South Caucasus region's growing prominence as a desirable destination for financial investments. To achieve the objectives of this study, we will. Numerous various elements, such as its advantageous geographic position, an abundance of natural resources, and the formation of prospective markets, may be ascribed to its preeminence. The industries with the largest amounts of foreign direct investment (FDI) are also examined in this research, with an emphasis on the manufacturing, infrastructure, and energy sectors' critical roles in promoting economic growth. In this last section of the study, the socioeconomic effects of foreign direct investment (FDI) are examined. The creation of new job possibilities, the diffusion of recently produced technology, and the diversification of exports are some of these outcomes. One of the main topics of this conversation is how these effects contribute to raising the local quality of life and lowering the incidence of poverty. The aim of this research is to examine the many aspects of foreign direct investment (FDI) and how it affects the economic development of countries in the South Caucasus area of the globe. The purpose of this project is to provide useful information on the opportunities and challenges these nations face in their efforts to draw in and use foreign investments in order to achieve sustainable growth and prosperity. The data that will be offered will come from a range of sources, such as focus groups, questionnaires, and interviews.

(ProQuest: ... denotes formulae omitted.)IntroductionEconomic development of a country depends on utilization of resources for increasing productive capacity. In many developing countries, utilization of resources is rendered impossible by the scarcity of domestic capital. One of these economic problems of developing countries is that they do not have enough national savings to finance their investments. They are in constant need of foreign capital in forms of both direct and indirect investments. Foreign direct investment (FDI) is a process whereby the residents of the source country attain ownership of assets with the intention to control the production, distribution and other activities of a firm in the host country (Khachoo and Khan,2012). Foreign direct investment (FDI) is a way of international loan, by which those countries that have better investment opportunities at the present borrow from those that have capital surplus.FDI can be a crucial instrument to foster economic growth. FDI provides developing countries with the much needed capital for investments and enhances job creation, managerial skills and transfer of technology for less developed countries. Furthermore, FDI encourages technological development and also support the accumulation of physical capital.FDI plays a significant role in the development of international trade, and it helps to establish direct, stable, and long-lasting links between economies. The Organization for Economic Co-operation and Development (OECD) states that; FDI can serve as an important vehicle for local enterprise development, strengthening the competitiveness of both the recipient and investor (Groh and Wich, 2012). For example, Turkey in particular is pursuing further political and monetary integration with Europe. In that case maintaining a government effectiveness that is conducive to foreign investment and increases comparative advantage is integral to its integrationist aspirations.The significance of foreign direct investment (FDI) flows is well documented in literature for both the developing and developed countries. Foreign Direct Investment (FDI) inflows to developing countries have been substantially increasing and, compared to other capital flows, have remained the largest component of net resource flows to developing countries. FDI is a key element in international economic integration. FDI creates direct, stable and long-lasting links between economies. As a definition FDI is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country. It encourages the transfer of technology and know-how between countries, and allows the host economy to promote its products more widely in international markets (Todaro, 1994).The role of foreign direct investment in the development of Turkish economy cannot be over emphasized. Foreign direct investment provides capital for investment; it enhances job creation and managerial skills, and possibly technology transfer.We shall present our analysis with a brief history of the Turkish economy. Today, Turkey is one of the most attractive investment destinations for foreign investors. It benefits from a unique strategic location; a young, dynamic and skilled workforce, and a stable political and economic environment. Turkey received foreign investment inflows of only US$18m 33 years ago when it started to host foreign investors. Now, the cumulative value of foreign investments has surged to US$138.3b. While the aggregate volume of foreign investment inflows totalled only US$14.6b during the 80-year period from the establishment of the Turkish Republic to 2003, this figure rose to US$123.7b during the last decade. In other words, Turkey attracted 8.5 times more foreign inward investment over the last decade than it did in the previous 80 years. …

factors such as level of output, rate of saving and investment, standard of living of people, per capita income as well as national income and finally on industrial development. Pakistan is the second largest economy in the south Asia in terms of market size and availability of cheap labor force, however, failed to attract the surge of FDI inflow in the economy during last two decades. More specifically, the foreign investment comes in Pakistan generally on the basis of relation i.e. Pak -US relationship whose effect can be observed clearly during interval 2000 to 2007. Later, the financial crisis dumped the world economy resultant the developed countries channelize their investment within country to cope up with the worsening effect of financial crisis rather than concentrating on foreign investment. The prime motto behind this study is to observe the challenging effect of FDI inflow on the economy of Pakistan during most impressive period in Pakistan history in terms of foreign investment. In this study the economic growth of Pakistan is being measured by developing the econometric model over various indicators such as GDP, GDPPC, GNI, TOP during clustering period 2000 to 2012.Empirical results shows that the entrance of FDI, however, uplifted the status of GDP whereas another variables are negatively influenced during first interval i,e.2000 to 2006. On the other hand, during second interval of study i.e. 2007 to 2012 the entrance of FDI inflow strongly affected the status of GDP Per Capita, whereas other variables are negatively influenced. At last, despite of favorable investment environment and key macroeconomic fundamentals, the Pakistan is still legging continuously in attacking the large FDI inflow caused to poor infrastructure, terrorist activities, energy issues, distortion in law and orders and large security issues.