Distribution Of FDI Research Articles

The Research on the Comparison of Geographic Distribution of FDI in BRIC

Geographical distribution of FDI is a significantly basic issue. As different countries and investment environment can influence FDI performance to a large extent. Since BRIC countries have special features, historical endowments and strategic goals, based on which the multinational corporation make different choices on entering host countries. This project analyzed the geographical distribution of BRIC multinational corporations and tried to find out the underlying reasons, concluding that not only historical and cultural factors influenced the geographical distribution, but also the comparative advantages of the home countries.

Location of FDI in India: Some Less-explored Aspects

While there has been extensive research to identify the factors which influence FDI's choice of host countries to invest in, considerable interest is also being attached to location of FDI establishments within specific countries. In India too, a few studies focused on the distribution of FDI in different states. Most of these were, however, based on aggregate FDI and that too of approvals only. Even those attempted at some level of disaggregation do not take note of specific characteristics of FDI like modes of entry, nature of the foreign investor, sector of investment, characteristics of local partner if any, etc. Since mid-2000s even this information is not available and it has become more difficult to identify FDI flows/establishments in different states. Based on India's experience since 1991, this note seeks to underline the need for disaggregated analysis which takes into account investor/sectoral characteristics, mode of entry, size of investment, etc.

FDI and immigration: a regional analysis

Does immigration affect foreign direct investment? Existing studies on immigration and FDI have all looked at aggregate flows at the national level, arguing that immigrant networks lower the risk of foreign investment through increased information flows and a built in market. However, these national-level studies suffer from identification problems since many of the factors that attract immigrants also attract FDI. This study improves upon identification by looking at the regional distribution of both FDI and immigration from 10 source countries to the 50 US states. Using a unique measure of immigrant network size in each state, I find that immigration is not only positively correlated with FDI, it tends to lead it as well. Comparing a state with an average sized immigrant network to one with a network twice as large, I estimate that the stronger network state will get on average 20 more foreign-owned affiliates opening per year, an effect that is quite persistent over time. On average, more skilled immigrant communities attract more FDI, while the pull effect of immigration on FDI also increases with immigrant ties to native countries and with immigrant influence in local communities. These results suggest that immigration creates a positive externality in foreign investment that must be considered when assessing the costs and benefits of labor mobility.

Прямые инвестиции ведущих стран ЕС

The article is devoted to the analysis of trends, sectoral and geographical distribution of European FDI in the context of the ongoing changes in the macroeconomic situation. The paper’s basic illustrative sources are investment projects of French, German and British TNCs, which rank among the leading capital exporters of the world.

Are FDI spillovers regional? Firm-level evidence from China

This paper examines whether spillovers from FDI occur at the national or regional level, using firm-level census data for the Chinese manufacturing industry between 2000 and 2003. We find that FDI provides significant positive spillovers for the productivity of firms in the same industry, but these spillovers are likely to be regional; that is, domestic firms benefit more from the presence of foreign firms in the same sector within the same region. The backward and forward linkage effects of FDI are negative with significant regional disparity. The geographic distribution of FDI also influences spillovers, with an increase in FDI inflow to the top FDI recipient provinces increasing the forward linkage spillovers. Our empirical results also suggest that domestic firms differ significantly in the extent to which they benefit from FDI, though domestic firms with high absorptive capacity are more likely to benefit from FDI.

Facts About and Impacts of FDI on China and the World Economy

This paper provides a comprehensive review of foreign direct investment in China over the last three decades. It reviews the growth, sources and distribution of FDI in China and analyses factors determining FDI inflows. It summarises the contributions of FDI to the Chinese economy in terms of economic growth, total factor productivity, exports and technology progress. Finally, the paper discusses potential impacts of FDI in China on the rest of the world in terms of FDI-competing countries and FDI source countries.

Facts About and Impacts of FDI on China and the World Economy

This paper provides a comprehensive review of foreign direct investment in China over the last three decades. It reviews the growth, sources and distribution of FDI in China and analyses factors determining FDI inflows. It summarises the contributions of FDI to the Chinese economy in terms of economic growth, total factor productivity, exports and technology progress. Finally, the paper discusses potential impacts of FDI in China on the rest of the world in terms of FDI-competing countries and FDI source countries.

Conditionings of decision of foreign investors on Ukraine in regional expression

The purpose of the article is determination of influence of FDI on Ukrainian regional development. On the basis of theoretical grounds there will be presented question of heterogeneity in the sphere of regional distribution of FDI and also the influence of this phenomenon on development of host country. Methods of statistic data analysis and source materials will be used for this purpose. Induction will allow todraw the conclusions. In turn, the concentration index of Herfindahl-Hirschman indicates the situation in the distribution of foreign capital in Ukrainian regions. Test results indicate a substantial level of concentration of foreign capital invested in the Ukrainian economy. This has negative effects manifested in the stratification of society and creating gaps in economic development.

Foreign Direct Investment and Regional Inequality in China

AbstractForeign direct investment (FDI) is blamed for being one of the main factors widening regional inequality in Chinese regions since it is highly unevenly distributed spatially. If this logic were true, then controlling the scale of FDI could be a solution to reduce regional inequality. However, it is difficult to reconcile the positive effect of FDI on economic growth with its potential “negative” effect on regional inequality. Using the largest panel dataset covering all the Chinese regions over the entire period 1979–2003 and employing an augmented Cobb–Douglas production function, this paper proves that FDI has been an important factor responsible for regional growth differences in China. However, it suggests that FDI cannot be blamed for rising regional inequality. It is the uneven distribution of FDI instead of FDI itself that has caused regional growth differences. The research results have important policy implications on regional development in China relating to FDI.

FDI and Immigration: A Regional Analysis

Does immigration affect foreign direct investment? This question has been examined in some form or another since Lucas' (1990) observation that labor and capital do not flow in opposite directions as predicted by economic theory. Existing studies on immigration and FDI have all looked at aggregate flows at the national level, arguing that immigrant networks lower the risk of foreign investment through increased information flows and a built in market. However, these national level studies suffer from identification problems since many of the factors that attract immigrants also attract FDI. This study improves upon identification by looking at the regional distribution of both FDI and immigration from 10 source countries to the 50 U.S. States. Using a unique measure of immigrant network size in each state, I find that immigration is not only positively correlated with FDI, it tends to lead it as well. Comparing a state with an average sized immigrant network to one with a network twice as large, I estimate that the stronger network state will get on average 20 more new foreign-owned affiliates opening up per year, an effect that is quite persistent over time. On average, more skilled immigrant communities attract more FDI, while the pull effect of immigration on FDI also increases with immigrant ties to native countries and with immigrant influence in local communities. These results suggest that immigration creates a positive externality in foreign investment that must be considered when assessing the costs and benefits of labor mobility.

Exchange Rate Policy and the Relative Distribution of FDI Among Host Countries

This paper examines the FDI-exchange rate nexus in the context of one FDI source and two host countries. It focuses on the effect of exchange rates on relative FDI inflows between the two host countries. The theoretical analysis shows explicitly that relative FDI inflows are a function of relative real exchange rates. In particular, if one host country devalues its currency against that of the source country more than the other does, FDI into the former country will be expected to increase relative to the other country. The theoretical inference is examined with Japanese FDI in manufacturing industries of China and ASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand). The empirical results generally support the theoretical conclusion, suggesting that the real devaluation of the Chinese Yuan undercut FDI into the ASEAN-4.

Exchange Rates and Competition for FDI in Asia

This paper argues that relative exchange rates between the host countries of foreign direct investment affect their competition for FDI. Specifically, if the host country currency appreciates against the source country's currency more than that of its rival, FDI inflows of the host country will decrease, while FDI inflows increase in the rival country. Using the data of Japanese FDI in nine Asian manufacturing sectors from 1981 to 2002, the paper examines the hypothesis in the context of the competition between China and ASEAN‐4 (Indonesia, Malaysia, the Philippines and Thailand). Empirical results show that the relative exchange rate is a statistically significant factor that determines the relative inflows of Japanese FDI for manufacturing as a whole, and for such sub‐sectors as textiles, food, electronics, transportation equipment, and others. Exchange rate policies of China and ASEAN‐4 played a critical role in dynamically reshaping the geographic distribution of Japanese FDI in Asia.

Comparative analysis of foreign direct investment in China Firms from South Korea, Hong Kong, and the United States in Shandong province

This article investigates in comparative perspective the behavior and strategies of FDI firms in China from South Korea, the United States, and Hong Kong. We compare the firms’ motivations for FDI, sectoral distribution of FDI and ownership advantages, corporate governance and ownership, and linkage with local Chinese firms. Our study has four major findings. First, on motivations for investment, the Korean FDI firms in China aimed to use China as an export-processing base, whereas the US FDI firms tend to target local Chinese markets. Hong Kong FDI firms tend to be somewhere between the Korean and the American firms, targeting both export and local markets. Second, on the sectoral distribution of FDI and related ownership advantages, the Korean FDI firms focus on labor-intensive sectors over which they have ownership advantages, exploiting cheap labor and raw materials, while ownership advantages of the US and Hong Kong firms tend to lie in capitalintensive sectors. Third, on the governance forms of the FDI firms, the Korean FDI firms show a strong preference for wholly foreign-owned FDI, whereas Hong Kong and American FDI firms show less preference for this type of arrangement. Hong Kong firms show some preference for the contractual joint ventures that enable more flexible arrangements between partner firms. Fourth, on linkage with local firms, Korean FDI firms rely very little on backward linkage with local firms, whereas US and Hong Kong firms show a strong tendency for backward linkage with local firms.

Effects of Foreign Direct Investment on the Performance of Local Labour Markets - The Case of Hungary

Post transitional labour markets of the CEE countries have been characterised by marked regional differences. Since labour market differences were mainly generated by demand side factors the paper will concentrate on the spatial pattern of job creation determined mostly by the allocation decisions of foreign investors. Thus, the success or failure of local economies or local labour markets were largely determined by the attractiveness of the individual regions towards FDI. Post-transitional winners of local labour markets can boast of high doses of FDI inflows, while high unemployment regions have been suffering a persistent lack of outside investments. Our analysis intends to identify the winners and losers of transitional local labour markets and to calculate the possible effects of EU-accession on local labour markets in Hungary. Based on micro regional data sets the paper describes the regional distribution of foreign and domestic employment. The first section of the paper discusses the time path of regional labour market differences in Hungary between 1990 - 2001 and identifies the winners and losers of transition. The second chapter analyses the spatial distribution of FDI and domestic firm's employment and identifies the most important explanatory factors of their regional distribution.

Structural Policy Reform and the Distribution of FDI in Europe

The envisaged EU enlargement will lead to a redirection of Structural and Cohesion Funds expenditures from current to new EU members. This redistribution of funds makes the accession countries even more attractive as a location of FDI. Using a logistic regressions approach, this paper shows that a hypothetical reallocation of Structural Funds as envisaged by Agenda 2000 leads to a redistribution of FDI by approximately 0.8 percentage points from the current EU members to the accession countries (first round) and 2.6 percentage points (second round), respectively.

International strategies of service MNCs in the Asia‐Pacific region

AbstractForeign direct investment (FDI) in services has been growing rapidly in the developing countries of the Asia‐Pacific region. In this study we explore the level and distribution of service FDI in the Asia‐Pacific region by examining both country‐level aggregate data and firm‐level data. Using data in 180 large multinational corporations in 10 service industries over the 1980–1986 period, we construct a logistic regression model to examine the effects of client‐following strategy, cultural difference, oligopolistic reaction, firm size, and international experience on the international expansion strategies of service MNCs in the region. Differences in the international strategies are analyzed and policy implications are discussed. © 1995 John Wiley & Sons, Inc.

Foreign Direct Investments From India: 1964-83

This paper is based on the EXIM Bank International Trade Research Annual Award 1990 doctoral thesis Foreign Direct Investments From India: 1963-83. It brings out the trends in direct foreign investments over the period, the patterns of ownership and control, the sources of technology of the FDI firms abroad, the sectoral and country distribution of outward FDI, and the factors that underlie the flow of these investments. The strengths and weaknesses of these investments are brought out. Indian outward FDI, i.e the fact that an economy at an early stage of industrialization has become a significant exporter of capital and technology (relative to investments within the economy) is interesting and not easily understood without bringing in the peculiar features of the home economy, viz. that capital accumulation and growth of the private corporate sector is restricted for structural reasons, and perhaps also due to policy reasons. Monopolistic structures, reinforced by policies such as industrial licensing in very many sectors has prevented the competition between capitals, which could have contributed to the growth of the home market. The small and slowly growing home market explains not only the industry patterns and the time pattern of FDI from India, but also certain other characteristics - that many of them are early entrants into host countries and are market seeking rather than market protecting, and hence quite different from advanced country FDI or even Korea which is well on its way to industrial transformation. India also shows much resources seeking investments, which can be expected to increase as growth places demands on India's limited natural resources.

Foreign Direct Investment Theories, Entry Barriers, and Reverse Investments in U.S Manufacturing Industries

This paper investigates empirically whether industrial organization-oriented FDI theories explain the recent phenomenon of reverse foreign direct investment in the U.S. Based on the distribution of FDI in two-digit SIC manufacturing industries, we find that capital and advertising intensities act as entry barriers to foreign investments in the U.S. We also observe that foreign multinationals are attracted by the U.S. market size, and that they invest heavily in industries with intensive R&D combined with marketing efforts.

Empirical Determinants of Manufacturing Direct Foreign Investment in Developing Countries

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