Benefits Of Foreign Investment Research Articles

THE CHALLENGES OF INVESTMENT ARBITRATION: SUCCESS OR FAILURE? A COMPARATIVE ANALYSIS OF INVESTMENT ARBITRATION IN NORTH MACEDONIA AND KOSOVO

Background: In today's modern business and technological landscape, businesses are increasingly inclined to seek alternative methods for resolving disputes rather than rely solely on traditional court procedures. Businesses are also increasingly aware of the significance of resolving conflicts through alternative means and taking proactive measures to avoid litigation. In recent decades, investment arbitration has gained widespread acceptance and has emerged as a preferred mechanism for resolving disputes involving international investors in Western Balkan countries. Some countries demonstrate a favourable inclination towards employing arbitration as a dispute resolution mechanism by enacting legislation that grants investors the right to initiate arbitration proceedings against the state in case of failure. This scientific research objective will be achieved through the reflection of the legislative framework in the matter of investment arbitration as well as the reflection of the flow of foreign investments, analysing and not limited to the treatment of concrete cases of arbitration disputes. Through this approach, we will answer the central question of how much arbitration as an alternative dispute resolution mechanism is a stimulating factor for attracting foreign direct investment or whether multinational companies only use the legislative and incentive favours offered by the Republic of Kosovo and North Macedonia. Methods: The article was conceived based on a modern methodological framework. Within the general methodological framework of scientific research, logical methods play a crucial role in the scientific processing of the research data, drawing conclusions and determining facts through which the truth of the thesis of the work is reached scientifically. In the context of this paper, the method of analysis through which the impact of arbitration as an alternative dispute resolution mechanism in relation to the flow of investments will be analysed is noteworthy. Additionally, methods of abstraction and concretisation will also be used. Abstraction is the basis of analysis, which sometimes represents the separation of parts from the whole subject. Moreover, the comparative method will highlight the diverse normative solutions in national legislation and international legal sources. Results and conclusions: In the article, the authors propose considering the effectiveness of existing provisions and determining whether adjustments or alternative approaches are needed to maximise the benefits of foreign investment while minimising potential risks and uncertainties associated with dispute resolution processes.

Analysing Relationship Between FDI and Economic Progress: Contemplating the Variations of Fiji’s Political Disequilibrium (1983-2013)

Over the years, the relationship between foreign direct investment (FDI) inflows and economic growth has been scrutinised and investigated by many researchers. Such a relationship aims to determine if foreign investment benefits the receiving nation. We have often witnessed that the receiving country does not accomplish the desired infrastructure for which they have received foreign aid. Political instability and corruption have caused dire stress within the nation. This study mainly investigates the direction of FDI flows within the economy of Fiji and how it helps boost Economic Growth from 1983 to 2013. The study also focuses on the early stages of the industrialisation of Fiji. Furthermore, Fiji has faced numerous structural breaks, such as the three coups encountered by the country. Our results show that, even though FDI has a positive long-run relationship with Economic Growth in Fiji, it is also a volatile component when the nation faces numerous political situations stability, and it remains significantly questionable.

Foreign institutional ownership and corporate risk‐taking: International evidence

AbstractResearch Question/IssueThis study aims to investigate the role of foreign institutional investors (FIIs) on corporate risk‐taking in an international context. We conjecture that FIIs play a role in encouraging firms to take risks and can substitute country‐level corporate governance in determining corporate risk‐taking.Research Findings/InsightsEmploying a large sample of 17,698 firms across 42 economies, we show that foreign institutional ownership positively influences corporate risk‐taking. This positive relation is achieved through the monitoring channel and the insurance channel. Furthermore, we show that FIIs substitute country‐level corporate governance in determining corporate risk‐taking, indicating that FIIs play a significant role in promoting risk‐taking in economies with weaker governance. In addition, debtholders view FIIs' risk‐promoting role negatively and use more restrictive covenants to protect themselves.Theoretical/Academic ImplicationsThis study provides empirical support for the role of FIIs on corporate investment decisions, thus complementing the existing literature. In addition, our paper documents that country‐level corporate governance and FIIs are substitutes in determining corporate risk‐taking, thus shedding additional light not only on the role of country‐level corporate governance but also on its controversial joint role with FIIs.Practitioner/Policy ImplicationsFIIs from economies with stronger corporate governance are particularly effective at promoting corporate risk‐taking in economies with weaker corporate governance, providing a new channel through which foreign investments can influence economic growth in developing economies. Therefore, policymakers should carefully consider and trade off the costs and benefits of foreign investment when proposing relevant policies.

PEMODELAN REGRESI SPASIAL INVESTASI LUAR NEGERI YANG MASUK KE INDONESIA

One of the important factors in the growth of a country's economy is investment. Sources of investment are divided into two, namely foreign investment and domestic investment. There are many benefits of foreign investment. These benefits are such as for development, employment, tax revenue, increasing foreign exchange, international trade, strengthening friendship with foreign countries and much more. The purpose of this research is to modeling of foreign investment in Indonesia using spatial regression. The predictor variables used are the number of labor and the net monthly salary. Based on the results of research analysis obtained information that the West Java province is the highest province to get investment funds from abroad. The highest net monthly salary in Indonesia is DKI Jakarta province. The highest number of labor in Indonesia is West Java Province. Based on the results of the Lagrange Multiplier test which showed a significant Lagrange Multiplier (lag) with a p-value < α = 5%. That's shows for the number of labor, the net monthly salary, and the foreign investment in Indonesia fulfill the spatial dependencies assumption. Based on the spatial regression model shows the number of labor, the net monthly salary, and the weighting has a significant impact on foreign investment in Indonesia.

Aggregate and heterogeneous sectoral growth effects of foreign direct investment in Egypt

AbstractThis paper investigates the sectoral impacts of foreign direct investment (FDI) on growth in Egypt between 1990 and 2007 based on a unique data set. It highlights the aggregation bias inherent in many empirical studies that focus solely on the economy‐wide effects of foreign investment. Aggregate inflows of FDI are shown to be detrimental to the country’s economic growth performance, possibly as a result of the “crowding‐out” of more productive domestic investment. Some positive sector‐specific effects, however, are found for investment in manufacturing and petroleum, which also has beneficial spillovers into other sectors. FDI in the finance and retail and telecommunications and information technology sectors are found to generate significantly negative growth effects, while those in services and tourism are negative but generally insignificant. These findings suggest that “market‐seeking” FDI in certain sectors has conspicuous “crowding‐out” effects, possibly owing to insufficient domestic absorptive capacity. The results of this study further demonstrate the importance of potential sectoral heterogeneity of own sector and inter‐sectoral economic growth effects of FDI. It therefore highlights the critical need for policymakers to take a more disaggregated sectoral‐level evaluation of the benefits of foreign investment, particularly in developing economies such as Egypt.

Deindustrialisation, Foreign Investment and Social Development: Mortality in the Hungarian Rustbelt

Abstract Background Many nations are experiencing deindustrialisation. A common strategy to cope with this is encouraging foreign investment. We still know little about the health impact of such industrial transformations, especially their role in the postsocialist mortality crisis. Methods Utilising a novel dataset constructed over two years covering 52 towns, 550 companies and 42,800 subjects, using multilevel survival modelling I test how deindustrialisation and foreign investment affect mortality in medium-sized towns in Hungary. I group towns into severely, and moderately deindustrialised (1989-1995), and into state ownership, domestic private and foreign ownership dominated categories (1995-2004). A retrospective cohort study in these towns collected data on vital status of respondents. I use multiple robustness checks and sensitivity analyses to reduce selection bias and endogeneity. Findings Deindustrialisation is associated with significantly higher odds of mortality for men between 1989 and 1995 (OR = 1. 16; p < 0.01). Foreign investment was not associated with mortality in any of the models for the 1989-1995 period. Between 1995 and 2004, women living in towns dominated by state ownership had a significantly lower risk of mortality compared to those living in towns dominated by foreign investment (OR = 0.79; p < 0.05) or domestic private ownership (OR = 0.74; p < 0.01). Foreign investment was associated with higher income growth in both periods; however, this was not associated with better health results. Conclusions Severe deindustrialisation was a crucial factor behind the post-socialist mortality crisis for men. The indirect economic benefits of foreign investment do not translate automatically into better health; in fact, women living in towns dominated by foreign investors appear to have a higher risk of dying. Foreign investment might promote economic growth but in itself cannot mitigate the health impact of severe deindustrialisation. Key messages Deindustrialisation is a significant contextual health risk factor. Spontaneous market processes, such as foreign investment, do not automatically reduce the detrimental health effect of plant closures.

Regulation-induced structural break and the long-run drivers of industrial pollution intensity in China

Abstract This study examines the effect of the regulation-induced structural break on the nexus between industrial pollution intensity (IPI) and energy use structure in China. Using six industrial pollutants intensity, IPI indicator is derived from Principal Component Analysis. The study applies three types of time-series based approaches, including Fully-Modified Ordinary Least Squares, Canonical Cointegrating Regression, and Dynamic Ordinary Least Squares, to deal with the problems of serial correlation and endogeneity. The results show that while a higher share of coal energy use increases IPI, stricter environmental regulation shifts the long-run IPI curve downwards. When we interact both variables, the results reveal that stricter environmental regulation induces a significant structural break in industrial use of coal energy, in a manner that reduces the associated emissions. Furthermore, investment in environmental treatment, trade liberalization and foreign direct investment reduce IPI in the long-run, but real gross domestic product increases IPI, which suggests the absence of scale economies in the industrial sector. To reduce IPI, stricter environmental regulations are necessary. The government can leverage on the positive environmental benefits of foreign investment, international trade, and direct investment in environmental treatment.

The gendered effects of foreign investment and prolonged state ownership on mortality in Hungary: an indirect demographic, retrospective cohort study.

Research on the health outcomes of globalisation and economic transition has yielded conflicting results, partly due to methodological and data limitations. Specifically, the outcomes of changes in foreign investment and state ownership need to be examined using multilevel data, linking macro-effects and micro-effects. We exploited the natural experiment offered by the Hungarian economic transition by means of a multilevel study designed to address these gaps in the scientific literature. For this indirect demographic, retrospective cohort study, we collected multilevel data related to Hungary between 1995 and 2004 from the PrivMort database and other sources at the town, company, and individual level to assess the relation between the dominant company ownership of a town and mortality. We grouped towns into three ownership categories: dominant state, domestic private, and foreign ownership. We did population surveys in these towns to collect data on vital status and other characteristics of survey respondents' relatives. We assessed the relation between dominant ownership and mortality at the individual level. We used discrete-time survival modelling, adjusting for town-level and individual-level confounders, with clustered SEs. Of 83 eligible towns identified, we randomly selected 52 for inclusion in the analysis and analysed ownership data from 262 companies within these towns. Additionally, between June 16, 2014, and Dec 22, 2014, we collected data on 78 622 individuals from the 52 towns, of whom 27 694 were considered eligible. After multivariable adjustment, we found that women living in towns with prolonged state ownership had significantly lower odds of dying than women living in towns dominated by domestic private ownership (odds ratio [OR] 0·74, 95% CI 0·61-0·90) or by foreign investment (OR 0·80, 0·69-0·92). Prolonged state ownership was associated with protection of life chances during the post-socialist transformation for women. The indirect economic benefits of foreign investment do not translate automatically into better health without appropriate industrial and social policies. The European Research Council.

Capital Control Liberalization And Monetary Policy In Kenya

Economist have always considered capital as the central element of the process of economic development, the study aimed to establish the effects of capital control liberalization on monetary policy in Kenya. The Economists view that foreign investment benefits developing economies by increasing the availability of capital still holds, based on this view, the capital deficient countries heavily resort to for- eign financing as the primary source to achieve rapid economic growth and through their positive im- pact over productivity and the general economic wellbeing of the host country. Kenyan economy has accumulated a large external debt and are now facing serious debt servicing problems. The growth ex- perience of East Africa has received worldwide attention this is because Africa is seen as a new center for growth and can be an investment destination for other regions. This study is motivated on the as- sumption that this discussions ignored the experiences of developing countries in their early phase of industrialization. In addition there is a lack of proper attention on the analysis of the issue of capital inflows in the context of neo-liberal economic reforms and financial deregulation. Large swings in capital flows into and out of emerging markets can potentially lead to excessive volatility in asset pric- ing and supply of credit in the economy. In order to lessen the impact of capital flows on financial in- stability, a number of studies and policy makers have proposed the use of capital controls. This paper considers the benefit of re-introducing capital controls as a potential instrument of monetary policy in Kenya. This paper reviews the Kenyan experience with large capital inflows over the past 15 years (June 2000-June 2015). The findings revealed that capital inflow had positive effect on monetary policy in Kenya.

Foreign Investment, Development and Governance

Academic and policy debates about investment treaties are premised on assumptions about the benefits of foreign investment. There is a rich and sophisticated body of empirical literature that examines whether these assumptions are valid. A few notable exceptions aside, scholarship on investment treaties does not engage deeply with this literature. The central argument of this article is that scholars and policy-makers working on investment treaties can benefit from a deeper engagement with the wider empirical literature on the effects of investment. One central insight from the empirical literature is that increased foreign investment is not necessarily beneficial from a host state perspective. This article explores the implications of this insight for research on and debates about investment treaties. Other, more specific, insights from the empirical literature are also relevant to debates about the interpretation and reform of investment treaties.

Mozambique – not then but now

Mozambique – not then but now

Scrutinizing States’ Power in a Liberalized Economy: A Comparative Analysis of the International Investment Regime and the International Trade System

The design of an institution affects both the way it functions and its outputs; from rulemaking to dispute resolution, institutional configuration plays a crucial role in the way an organization attains its ultimate goals. This paper will consider institutional design as an independent variable that has an effect on both the treatment and resolution of disputes in international economic law. It will focus particularly on how the lack of a proper institutional framework shapes the investment field, contrasted with the highly institutionalized trade system.The investment and trade mechanisms share a core function which is to scrutinize state regulatory activity in its local economy, especially by discriminating legitimate regulation from arbitrary and illegal action. Their mission is very delicate: While economic globalization requires certainty and stability of certain rules across the world, this aim can only be achieved if states remain capable of correcting market failures and providing essential public goods.As a consequence, this equilibrium requires scrutinizing state activity in order to secure the balance that the international community has adopted as fair and legitimate. In particular, such a function implies considering not only international commitments, but also legitimate domestic necessities like social values and development goals. In the international trade field, authors like John Ruggie and Jeffrey Dunoff focus on the importance of maintaining this equilibrium, which is accepted as a basic function of this system. Conversely, this element is missing in the investment field, which is signaled as a cause of concern by many authors, including William Burke-White, Ernst-Ulrich Petersmann, Brigitte Stern or Gus Van Harten. Primarily, the core critique lies on an alleged “unbalanced” interpretation of investment treaties, affecting the output of the dispute settlement mechanism and, therefore, distorting states’ abilities to pursue legitimate goals, like the implementation of policies designed to advance foreign investment benefits for the host economy.Both trade and investment law are sources of concern for civil society, NGOs and developing countries. This article will argue that an institutionalized framework is better positioned to cope with these issues and achieve better solutions.Presented at the SIEL 2010 Conference in Barcelona.

Foreign Investment in a Post-Conflict Environment

Foreign direct investment can play an important role in promoting economic growth in post-conflict states. In order to attract the benefits of foreign investment, a host country must ensure foreign investors that they can safely invest there. In post-conflict economies, the physical safety concerns, combined with a general distrust of post-conflict governments, are among the key considerations for foreign investors. However, foreign investors also recognize that new and untapped opportunities become available in a post-conflict context. This article first seeks to identify certain issues relating to foreign investment that, from the perspective of the international lawyer, both post-conflict governments and potential investors in those countries should consider. The second part of this article illustrates some of these issues in practice by considering the specific case study of Iraq.

Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?

Whether environmental regulations alter capital flows remains a hotly debated issue. This paper uses county-level data to examine the location decisions of domestic and foreign firms in a single empirical model and tests for asymmetries by firm origin in the degree to which capital flows are influenced by environmental standards. We find that while domestic firms are influenced by environmental regulations, foreign firms are not. Since the benefits of foreign investment are well-documented—foreign plants typically provide more jobs and increase local wages by more than domestic plants—this result suggests a double-dividend is available: foreign plants provide an economic stimulus and are not unduly influenced by environmental protections.

Productivity Growth in Indonesia: The Role of Regional Characteristics and Direct Foreign Investment

Using detailed micro data from the Indonesian manufacturing sector, we examine the effect on productivity growth of different regional characteristics and direct foreign investment. The results suggest that a diversified regional industry sector increase productivity growth. Direct foreign investment benefits establishments in neighbouring industries within the region. There are intra-industry spillovers from direct foreign investment at a national level, but there does not seem to be a geographic component in this type of spillovers.(This abstract was borrowed from another version of this item.)

The Growth of Foreign Direct Investment in Europe

Increasing attention has been paid in Europe in recent years to the question of why firms invest abroad. This reflects both the rapid growth in foreign direct investment within Europe, along with recent improvements in the quality and availability of data. At the heart of the debate is a focus on the costs and benefits of foreign investment, such as whether inward investment affects employment and economic growth and whether outward investment is simply ‘job exporting‘, with firms moving to low-cost, labour-abundant locations. An understanding of the motives behind firms’ decisions to invest overseas is of particular importance for the UK, whose aggregate stocks of outward and inward foreign direct investment reached 30 per cent and 21 per cent of GDP respectively at the end of 1995.

Foreign investment, industrial restructuring and dependent development in Singapore

Singapore's industrial development and restructuring are very much dependent on foreign investment. Despite the apparent benefits of foreign investment and Singapore's success in export-oriented manufacturing, there are worrisome aspects arising from the large and growing dependency on such investment in the manufacturing sector as Singapore moves toward a developed country status. This article explores some of the consequences of such dependency. In terms of industrial pattern, foreign investment has created and maintained a dualistic industrial structure in manufacturing. Foreign firms and government industrial policies have suppressed and marginalized local entrepreneurship. Export-oriented industrialization has opened the employment doors for women in manufacturing. However, women are predominantly found in low pay, dead end jobs in the assembly line of Singapore's new industrial order. With the implementation of a new wave of industrial restructuring strategies, new capital and technological intensive foreign investments are welcomed and solicited. However, the local labour supply is unable to meet the increased demands. Foreign labour has been called in to fill the gaps. This inevitably distorts labour market outcomes and heightens the income inequality index.

Foreign investment benefits U.S. firms

Foreign investment benefits U.S. firms

Direct Foreign Investment in the Non-Oil Sectors of the Iranian Economy

The world-wide expansion of multinational corporations and the concomitant rise in direct foreign investment have recently received considerable attention from economists. A continuing controversy has existed over the costs and benefits of foreign investment to both the capital-exporting and the host countries. The conflict between the interests of foreign capital and the "national" interest is particularly noticeable in the underdeveloped countries. While many of these countries have opted for the "free enterprise" path to economic growth, they lack the technical and administrative expertise, as well as political will, to explore alternatives to the foreign investment as an instrument for gaining access to the industrial countries' technological know-how and markets. At the same time there is a gradual realization that the alleged benefits of foreign investment are not automatic and that the costs may be substantial.

The Benefits of Foreign Investment in Canada, 1950 to 1956

During the 1950's and 1960's the high level of foreign investment in Canada has provoked a continuing public debate, but for the most part the controversy has raged unrestrained by any quantitative information on the potential benefit of foreign capital. The lack of data is understandable, for in attempting an estimate one encounters a multitude of conceptual and empirical problems that militate against any sort of precision.Although it is impossible to be exact, I believe that the importance of the problem warrants making some rough guesses, and that is the task of this paper. My tools will be crude and there will be many compromises with reality, but by choosing my assumptions so that they impart an upward bias to my estimates, I can at least attempt to establish an upper bound to the true benefit of foreign investment. Even if the numerical estimates are not too reliable, making them forces us to separate the many issues related to the problem and to speculate on their relative importance.It must be noted initially that the models of this paper consider only the benefits conferred by the inflow of real resources financed by foreign capitalists, and they do not take account of the technical knowledge and skilled personnel often accompanying direct foreign investment. My first model assumes that some new knowledge is implemented by foreign investment, but no more than would be implemented by the same amount of domestic investment. I consider neither the possibility that the technical change associated with foreign investment proceeds at a faster pace than that associated with domestic investment, nor the possibility that techniques introduced by foreigners have external effects. I take this narrow approach not only because it would be virtually impossible to isolate the impact of technical change introduced by foreigners but also because I do not think that foreign investment is necessary to the international transmission of technical information.