Attraction Of Foreign Direct Investment Research Articles

The Impact of Bilateral Investment Agreements on Attracting Foreign Direct Investments

Abstract Foreign investors' fear of expropriation led to the emergence of the idea of new ways of protection and adequate treatment of foreign investments on the international level. Primarily, the home countries wanted to protect their interests and became the main proponents of the creation of bilateral investment agreements. Developing countries that aspire to become and remain part of international economic flows, had to provide additional protection to investors, as investment host countries. They saw bilateral investment agreements as an opportunity to attract foreign direct investment. They provide a certain standard in the treatment and protection of investments and thus influence the creation of an environment that favors the transfer of capital from one country to another. In modern economic conditions, there are almost no entities that are absolutely risk-averse. For this reason, bilateral investment agreements are counted on to play one of the key roles in minimizing the risks of investing in developing countries.

The impact of foreign direct investment on income inequality in developing countries: The Bayesian approach

Inequality in general and income inequality in particular have existed for a long time and tend to increase daily. Foreign direct investment (FDI) is expected to be an important factor contributing to mitigating that situation. However, the results of previous empirical studies on the impact of FDI on income inequality have not reached a consistent conclusion. Therefore, this study evaluated the impact of foreign direct investment on income inequality in developing economies. The study has provided evidence that the relationship is nonlinear through data from a sample of 36 developing countries between 2008 and 2020 and the Monte-Carlo algorithm according to the Bayesian approach. We document a U-shaped effect of FDI on income inequality. Besides, other factors, including trade openness and migration, obviously impact income inequality. Different results were found when FDI interacted with trade or migration, representing important channels through which inequality is affected. With these results, we suggest that policymakers in developing countries should develop appropriate policies on FDI attraction encourage trade openness and migration to reduce income inequality.

Innovative Solutions for Economic Growth: Exploring the Impact of Economic Freedoms on Foreign Direct Investment Attraction

Abstract Economic freedoms are essential for the growth and development of countries, but their distribution varies across nations, resulting in differences in economic growth. This study aims to explore the impact of economic freedoms on economic growth, measured by gross domestic product (GDP) per capita and foreign direct investment (FDI) inflow, by examining the influence of institutional quality. Economic freedom indicators were obtained from the 2022 report by the Heritage Foundation, and GDP per capita and FDI indicators were sourced from the World Bank report. This study employs multivariate regression analysis to investigate the relationship between economic freedoms and economic growth. The findings suggest that economic freedoms have a positive effect on both GDP per capita growth and FDI inflow. Government integrity was found to be the primary indicator for GDP per capita growth, while Business freedom was identified as the key factor in attracting FDI. The implications of these results are significant, as they can inform policy decisions aimed at improving the standard of living by increasing GDP per capita and creating employment opportunities through FDI.

Impact of Foreign Direct Investment on Indian Economy

Foreign direct investment (FDI) is an instrument for economic growth; it strengthens domestic capital, productivity and employment. FDI in India has got an important role in the development of the Indian economy. FDI in India has enabled India to achieve a certain degree of financial stability, growth and development in various ways. It has allowed India to focus on the areas that needed a boost and economic attention, and to address the various problems that continue to challenge the country. India has worked a lot to attract FDI from the world’s major investors. FDI is vital in the up gradation of technology, skills and managerial capabilities in various sectors of the economy. With globalization, developing countries, particularly those in Asia, have been witnessing an immense surge of FDI inflows during the past two decades. India with its considerable market potential and a liberalized policy regime has sustained its attraction for foreign investors. This research paper aims to observe the impact of FDI on Indian economy, predominantly after two decades of economic reforms. The paper provides the major policy implications from this analysis. The attraction of foreign direct investments (FDI) is often emphasised as a precondition for a successful economy by most governments of less developed countries. The objective of the paper is to evaluate economic impacts of FDI

DEVELOPING SPECIAL ECONOMIC ZONES (SEZs) IN MALAYSIA: A LAND USE PLANNING LEGAL PERSPECTIVE

Special Economic Zones (SEZs) is a known mechanism that policymakers commonly use to attract Foreign Direct Investment (FDI). However, there is a global mixed reaction towards its successful implementation with a few operational failures, especially from the legal framework perspective. Therefore, this paper aims to explore the land use planning legal issues encountered by the development of the Special Economic Zones in Malaysia. Two significant legal issues and problems focusing on the cases related to land use planning and land matters have been identified using qualitative textual analysis. Findings show that there are loopholes and weaknesses in the statutory plan and local authorities exercising their power on land use planning management related matters. Thus, understanding the legal cases from these two issues is essential in formulating the next course of action on how the legal and regulatory framework should be embodied and embedded in the land use planning practice and policy in the SEZs' development.

The situation and solutions to attract FDI into the processing and manufacturing industry toward the goal of sustainableeconomic development in Vietnam in the current period

The processing and manufacturing industry is the leading industry in attracting foreign direct investment (FDI) in Vietnam, and at the same time is the growth engine for the development of the whole economy. However, the efficiency of attracting FDI capital for the processing and manufacturing industry has not absolutely achieved the expected results. Therefore, the role of FDI in the processing and manufacturing industry has not been fully demonstrated in economic development. Based on the statistical data, the author analyses and evaluates the current situation of attracting FDI into the processing and manufacturing industry in Vietnam for the period 2011-2021, thereby proposing solutions to promote FDI attraction in the processing and manufacturing industry toward the goal of sustainable economic development.

Territorial Marketing Impacts on Foreign Direct Investment Attraction(Empirical Evidence in Nghe An Province, Vietnam)

FDI and territorial marketing are fields of interest and research by many scientists and managers. However, this is still a new field of science in Vietnam, both academically and practically. The awareness of building a local image to investors, especially foreign investors, is still limited. This has had a significant impact on attracting FDI into many provinces of Vietnam in general and Nghe An province in particular. Although Nghe An has issued and implemented many policies to attract FDI, FDI attraction results are not commensurate with the potential and position of the province. In this study, the author conducted a survey of foreign investors who made surveys to invest in or implemented FDI projects in Nghe An. Data is primary data which is collected from 160 foreign investors who invested or did investing survey, then processed by exploratory factor analysis (EFA) and multiple regression to determine the territorial marketing factors affecting the investment decisions of foreign direct investors in Nghe An. Research results have shown that 6 territorial marketing factors have a positive impact on the investment decision of foreign direct investors, this will be an important foundation to propose solutions for territorial marketing to attract FDI in Nghe An in the next coming time.

Impact of Foreign Direct Investment on BRICS Countries Economic Growth

Abstract: The purpose of this article is to explore how foreign direct investment (FDI) is linked to economic growth in the BRICS nations. Various sources of data are gathered and analyzed to investigate the contribution of FDI to the development of these emerging economies, and to identify the factors that influence the inflow of FDI. The study examines the period from 2000 to 2020 and employs statistical methods to analyze the relationship between FDI and economic growth. The research findings are pertinent to policymakers, investors, and other interested parties who seek to foster economic growth in the BRICS countries. The study reveals that FDI has a substantial and beneficial impact on economic growth, particularly in India and China when compared to the other BRICS countries. As a result, the paper recommends that policymakers in these nations prioritize the attraction of FDI to stimulate economic growth.

Regional healthcare infrastructure disparities and foreign direct investment into Europe

This study examines the impact of sub-national healthcare infrastructure heterogeneity on the location choice of inward foreign direct investment (FDI). We do so by employing an augmented gravity model on Japanese firm-level FDI into European NUTS-2 regions during the period 2000-2017. Differences in each region's per capita number of hospital beds and practicing physicians highlight the healthcare infrastructure heterogeneity across Europe. Our negative binomial estimation results indicate that both hospital beds and practicing physicians significantly positively attract inward FDI, with physician density having the more significant impact. The findings are consistent with the hypothesis that the quality of local institutions is a determinant of FDI attraction.

Foreign Direct Investment and Economic Growth in Africa: Another Look from the WAEMU Region

Using panel cointegration and Granger causality techniques for the period 1994 to 2018, this article empirically explores the relationship between foreign direct investment (FDI) and economic growth in the West African Economic and Monetary Union (WAEMU). Contrary to the literature’s widely accepted opinion, we find no evidence of a causal relationship between FDI inflows and economic growth in the WAEMU region. This surprising result can be explained by the weakness of absorptive capacity factors as pointed out by the literature. However, we find contrary to the literature that the importance of absorptive capacity is a necessary but not sufficient condition to ensure the growth impact of FDI in these countries. The Null effect of FDI inflows on growth is also explained by the structural FDI sector-oriented puzzle observed in these countries. Sectors attracting the most FDI inflows are the ones that contribute the least to economic growth. Conversely, sectors contributing the most to economic growth are those which attract the least foreign capital. This finding provides crucial policy implications for the WAEMU region in terms of rethinking their FDI attractiveness policies in favor of more efficient, and inclusive economic growth.

The Importance of Renewable Energy Consumption and Human Capital in Attracting Foreign Direct Investment in Pakistan

This research looks at the connections between FDI, renewable and nonrenewable energy, human capital, and the environment in Pakistan. Using data collected from 1998 to 2020, this study uses the autoregressive distributed lag (ARDL) method to quantify the interdependencies between various conceptual frameworks. All variables tested had a significant impact on FDI in the long run. The environment coefficient is significantly negative. In addition, there is a positive indication of significance for the coefficients of renewable energy, non-renewable energy, and human capital acquired through formal education. Based on the findings of this research, it is recommended that national governments take steps to attract more FDI.

How Does the Competitiveness Index Promote Foreign Direct Investment at the Provincial Level in Vietnam? An Integrated Grey Delphi–DEA Model Approach

Foreign direct investment (FDI) is an important factor in building a strong economy for a country, particularly in developing and emerging markets. Both domestic enterprises and policy makers have been motivated to attract FDI for the benefits of FDI, such as technological transfers, spillover benefits, and rising competition. There is a need for a functional model to assess how the competitive index affects FDI attractiveness. Therefore, in this study, the authors use an integrated model of Grey Delphi, the Data Envelopment Analysis Super Slack-Based Measure Model (DEA–Super SBM), and the Malmquist Model (DEA–Malmquist) to evaluate the FDI attractiveness of Vietnamese provinces from 2017 to 2021. Firstly, ten critical dimensions of the provincial competitive index (PCI) affecting the number of FDI by cases and amount of FDI capital were validated via the Grey Delphi method. Secondly, the Super-SBM model is applied to assess the FDI efficiency of 63 provinces in Vietnam from 2017 to 2021. Then, the DEA–Malmquist model is employed to analyze the total change in the productivity of 63 provinces’ FDI performance in Vietnam. The findings of this study revealed that the efficiency of FDI in Vietnam’s provinces is relatively low, and there is a significant variation in the attractiveness of FDI among the provinces. This study can provide valuable insights for policy makers and other stakeholders in developing effective strategies to attract FDI and foster economic development.

Carbon Emission Reduction Effects of the Smart City Pilot Policy in China

Carbon emission reduction is an important goal of China’s sustainable economic development. As a new urbanization construction model, the importance of smart city construction for economic growth and innovation is recognized by the academic community. The impact of smart cities on the environment, especially on carbon emission reductions, has yet to be verified. This has implications for the green and low-carbon transformation of China, the realization of the peak carbon and carbon neutrality goals and the effectiveness of smart city pilot policies. For these reasons, this paper utilizes China’s urban panel data, and using the difference-in-difference method, investigates the smart city pilot policy as a quasi-natural experiment of new urbanization construction and its impact on urban carbon emission reductions. The results are summarized as follows: (1) Smart city construction has reduced the carbon emissions of pilot cities by about 4.36% compared with non-pilot cities. (2) The dynamic impact analysis found that the carbon emission reduction effect of smart city construction tends not to be effective until the third year of the implementation of the policy, that the policy effect gradually increases over time, and that its carbon emission reduction dividend has a long-term sustainability. (3) The analysis of the influence mechanisms determined that smart city construction mainly promotes urban carbon emission reduction through three paths, including improving technology innovation capacity, enhancing the attraction of foreign direct investment, and accelerating the upgrading of industrial structure. (4) The heterogeneity analysis indicates that smart city construction has stronger carbon emission reduction effects in the “two control zones”, non-old industrial bases and non-resource-based cities.

Unlocking the potential of open innovation through understanding the interrelationship among key determinants of FDI attractiveness

Foreign Direct Investment (FDI) plays a critical role in driving economic growth and development, particularly in countries like Vietnam. This study proposes a hybrid model that integrates Fuzzy-Delphi, Fuzzy-DEMATEL, and DANP methods to identify and prioritize the main factors affecting FDI attraction and open innovation in Vietnam. The proposed approach offers a more comprehensive analysis that accounts for the inherent complexities and uncertainties of the FDI decision-making process and its impact on open innovation. By exploring the network and interrelationships between the factors, the study provides a more nuanced understanding of the determinants of FDI attraction, open innovation, and their impact on other factors. The study's results are expected to reveal the critical factors affecting FDI attraction and open innovation in Vietnam and their relative importance, serving as a basis for policymakers to design effective strategies for attracting FDI and promoting open innovation. This can be particularly crucial for developing countries seeking to leverage FDI to drive economic growth and innovation. Additionally, the proposed methodology has the potential to contribute significantly to the literature on FDI attraction and open innovation and provide a valuable framework for future research.

Assessment of Attractiveness of the Baltic States for Foreign Direct Investment: The TOPSIS Approach

Foreign investment is one of the driving forces of a country’s economy. The global foreign direct investment (FDI) flows in 2020 amounted to USD 1 trillion, but FDI distribution varies from country to country. Here, the questions arise as to what determines the choice of foreign investors, what the countries can do/are doing to attract FDI, and which Baltic states are the most attractive for FDI. Based on the scientific literature analysis, the definitions of FDI and the attractiveness for FDI, as referred to in the empirical study, are reviewed; the factors affecting FDI are singled out, and the methods/models that are applicable for assessing FDI are investigated. The major purpose of the article is to assess the attractiveness of the Baltic states for foreign direct investment. Research methods: comparative analysis of the concepts and methods available in the scientific literature, secondary data analysis, statistical data processing, and multi-criteria evaluation methods. The results of the assessment of the attractiveness of the Baltic states for foreign direct investment that were determined by applying the TOPSIS multi-criteria evaluation method helped to determine a country’s position in relation to its neighbors and revealed the criteria that weaken or strengthen this position. The results of the research can help the leaders of the states to select the relevant measures to improve their state’s FDI attractiveness in relation to other states.

THE EFFECT OF CORPORATE TAX POLICY ON FOREIGN DIRECT INVESTMENT: EMPIRICAL EVIDENCE FROM ASIAN COUNTRIES

The phenomenon of Corporate Tax Rate (CTR) reduction to attract Foreign Direct Investment (FDI) has been an interesting subject given the lack of consensus from empirical studies. This study aims to provide empirical evidence on the relationship between CTR and FDI, and examine factors that influence FDI inflows. Using data for 28 Asian countries from 1999 to 2014, we find that CTR has a significant negative effect on FDI inflows. FDI inflows increase by 4.38% due to a 1% CTR reduction. We also find that other economic factors, such as economic openness, market size, and exchange rates play an important role in attracting FDI inflows.

Factors Affecting the Green Economy Based on the Attraction of Foreign Direct Investment in the Context of Climate Change, Vietnam

Factors Affecting the Green Economy Based on the Attraction of Foreign Direct Investment in the Context of Climate Change, Vietnam

The Strategy of Attracting Foreign Direct Investment in Ukrainian Enterprises

The article provides an overview of current problems and opportunities associated with attracting foreign direct investment (FDI) to Ukraine. The purpose of the article is to determine the strategy of attracting foreign investments and to determine ways to increase the investment attractiveness of Ukrainian enterprises. The article also emphasizes the relevance of the study of factors of feasibility and efficiency of the involved investments, since these indicators determine the optimal approach to work with them. The article defines the essence of the concept of "foreign direct investment". Types of presentation of the investment activity of enterprises as a whole were determined and an overview of the main types of investments that can be involved in enterprises was carried out. A comparative analysis of real and financial investments was conducted, the advantages of these types of investments for enterprises were emphasized. Also, a comparative review of the main types of direct foreign investment was conducted. Various strategies and approaches that can be successful in attracting FDI and contributing to the economic growth of the country have been analyzed. The factors that contribute to the attraction of direct foreign investment in the State are highlighted. The research in the article focuses on the challenges that Ukrainian enterprises face when attracting FDI, such as corruption, political instability and uncertain legislation. References are used to the works of various researchers who studied investment activities and the importance of investments in the formation of the enterprise's capital. The importance of developing an investment strategy was determined and areas for increasing the investment attractiveness of the company were identified. At the end of the article, additional directions for increasing the investment attractiveness of companies are proposed, such as the development of an international brand, improvement of personnel qualifications, introduction of modern technologies, partnership with local and international structures. Development of a comprehensive investment strategy and implementation of recommended measures can increase the company's competitiveness, attract foreign investors, and ensure long-term stability and growth.

Impact of Technological Innovation and Covid-19 on the Yangtze River Delta Region’s FDI

The Yangtze River Delta is an area in China’s lower portions of the Yangtze River that borders both the Yellow Sea and the East China Sea and contains a large number of coastal ports. Foreign direct investment (FDI) has driven the rapid development of the local economy. However, there are few studies on the impact of local technological innovation on the attractiveness of FDI. This paper examines how technical innovation affects FDI and considers if FDI might be encouraged by technological advancements made during Covid-19. This paper uses the principal component analysis method to establish the technological innovation index. The regression model is established to evaluate the impact of technological innovation and Covid-19 on Foreign direct investment (FDI). We found that technological innovation has a positive effect on FDI. At the same time, under the background of Covid-19, technological innovation is not conducive to attracting FDI. We also provide some recommendations to assist the government in fostering technological innovation. (1) The local government ought to support both homegrown and international innovation. (2) The government should also promote the development of creative talent teams and inspire scientists and technicians to work for regional businesses or launch their own ventures.

Environmental Sustainability in Selected OPEC Countries: Do the Influence of FDI and ICT Matter?

Considering the undeniable role and importance of the environment in people's lives, the present study is designed to investigate the combined effect of information and communication technology (ICT) and foreign direct investment (FDI) on achieving environmental sustainability. Since the increasing emission of carbon in society and its destructive environmental effects on social economic aspects and even political tensions have become a challenge, the main question of the research is what strategies have governments, especially oil exporting countries, used in the past to reduce the level they have discovered pollution and what policies do they want to follow in the future? Among the policies undertaken by the OPEC oil exporting countries, has the action for foreign direct investment (FDI) and the development of information and communication technology (ICT) been effective in preventing harmful environmental effects? For this purpose, data on renewable energy consumption, the intensity of use of information and communication technology, foreign direct investment (FDI), and urbanization have been used as explanatory variables, and carbon dioxide (CO2) emission as a dependent variable. The target countries selected are oil exporting countries (OPEC) for the period 2000 to 2020, and the analysis method used is panel VAR. The results showed that creating a shock in FDI, labor force, urban population, and renewable energy consumption decreases CO2 while creating a shock in Gross capital formation increases CO2. The impact of shock of ICT on CO2 is also insignificant and can be ignored. The results of variance analysis also showed that urban population, labor force, and FDI variables have the largest contribution in explaining the behavior of CO2; therefore, it is necessary to pay attention to FDI and try to increase the attraction of foreign direct investment to reduce CO2 in OPEC countries. JEL: C23, F43, F64.