EU Foreign Direct Investment Research Articles

Strategic Autonomy, REPowerEU And The Internal Energy Market: Untying The Gordian Knot

The “open” strategic autonomy discourse now serves altogether as a new narrative and overarching principle of EU energy policy. This article conceptualizes EU strategic energy autonomy (SEA) as the Union’s ability to choose autonomously its own path towards a decarbonized “energy mix”. Realizing EU SEA demands a more holistic energy policy to tackle external dependence on foreign suppliers of energy commodities, technologies, and raw materials critical to the green transition. In this context, joint external action is important; but coordinated internal action is even more so, as the nature and magnitude of external constraints also depend on internal choices among the Member States concerning transition pathways. The article focuses on the internal dimension of EU energy policy. The REPowerEU plan and related emergency measures adopted under Article 122 TFEU to guarantee solidarity in tackling the impending energy crisis only brought a partial answer and once again raised the question of the EU competence to act on energy security issues. It is argued that the shared competence and related limitations foreseen in the TFEU should not prevent the EU from implementing a long-term holistic policy to pursue a resilient decarbonization policy throughout the energy value chains. The EU may well become more relevant than in the past when it comes to the energy security of Member States. New regulatory tools may be needed to support the integrity of the cornerstone of EU energy policy to date – the internal energy market – in the pursuit of an “open” SEA. The potential contribution to safeguarding “open” SEA from EU foreign direct investment screening, the forthcoming carbon border adjustment mechanism, and the new EUforeign subsidy regulation are discussed in this context.

The Macroeconomic Determinants and FDI: Evidence from 14 International Alliances

This study investigates the relationship between Foreign Direct Investment (FDI) and some macroeconomic variables such as Gross Domestic Product (GDP), Gross Capital Formation (GCF), Agriculture, Forestry, and Fishing (AFF), Industry, Import, Export, Inflation and Unemployment rate. Panel Data of 14 regional alliances countries from 1990-2018 were collected from The World Bank website. Robust regression models are used in this study. This research found that GDP had significant positive relationship with FDI in all regions except Arab League, EU and G7 countries. GCF had significant positive relationship with FDI in Arab League, BRI, GATT, NAFTA countries & negative relationship in APEC, G7 countries. AFF had significant positive relationship with FDI in BRICS, GATT countries & negative relationship in African Union, ASEAN, BIMSTEC, BRI, BRICS, SAFTA countries. Industry had significant positive relationship with FDI in African Union, BRI, NAFTA, OECD countries and negative relationship in BRICS, G7, G20 countries. Import had significant positive relationship with FDI in African Union, APEC, Arab League, ASIAN, BRI, G7, G20, GATT countries and negative relationship in BRICS countries. Export had significant positive relationship with FDI in BRICS countries and negative relationship in African Union, ASEAN, BRI, G20, GATT, OECD, SAFTA countries. Inflation had significant positive relationship with FDI in GATT, SAFTA countries and negative relationship in African Union, APEC countries. Unemployment rate had significant positive relationship with FDI in African Union, BRI, BRICS, EU, G20, GATT, OECD, SAFTA countries and negative relationship in ASEAN countries.

When Integration by Stealth Meets Public Security: The EU Foreign Direct Investment Screening Regulation

The EU FDI Screening Regulation (the Regulation) is an interesting application of the ‘integration by stealth’ theory to the sphere of investment screening. The Regulation leads to integration in the sense that, for the first time, the Commission is granted a role in the process of investment screening within the EU. However, Commission involvement comes at the cost of simultaneously strengthening the hands of the Member State screening authorities, leading to a suboptimal policy outcome whereby neither the Commission nor the Member States may have at their disposal the necessary tools to screen investments quickly and thoroughly, as is required to maintain an open investment environment. The shortcomings of the Regulation are likely to trigger calls for further reform. To develop this argument, this article (1) legally examines the main features of the Regulation and (2) explores the interplay of the Regulation with EU free movement rules. The article explains how the Regulation is likely to contribute to an uptake in national screening decisions, but not to a concomitant increase in enforcement opportunities for the Commission or the Court of Justice of the EU. This creates an enforcement gap, which may put pressure on the existing free movement framework and may risk encouraging Member States to develop a national as opposed to a common EU conception of public security and order. European Union law, European integration, foreign direct investment screening, free movement of capital, freedom of establishment, investment liberalization, functionalism, neo-functionalism, Court of Justice of the European Union, common commercial policy, rule of law, judicial protection, enforcement

The EU Foreign Direct Investment Screening Regulation: in Search of a Clear Concept of FDI

The EU Foreign Direct Investment Screening Regulation: in Search of a Clear Concept of FDI

The current state of investment and financial cooperation between Ukraine and the European Union

Relevance of research topic. Nowadays the Ukraine's relations with the European Union are extremely important. European integration for Ukraine is a strategic choice for the future, and it makes a great influence on the place and role of the state in the new system of international relations, including economic, monetary and financial ones. Formulation of the problem. Ukraine's reform agenda is comprehensive and requires significant financial resources that cannot be raised solely from domestic sources. This determines the importance of attracting foreign funds, including those from the EU as a strategic partner of Ukraine, as well as the creation of a favourable investment climate and therefore the intensification of foreign investment. Analysis of recent research and publications. In the background of Ukraine's European integration intentions, a significant number of scientists study the problems and prospects of investment and financial cooperation between Ukraine and the EU. This cooperation is the subject of constant monitoring by European government agencies and central executive bodies of Ukraine as well. Selection of unexplored parts of the general problem. In the conditions of unstable global political and economic environment, new challenges in the region and the extreme dynamism of investment and financial processes, it is necessary to conduct the research reflecting the current state of investment and financial cooperation between Ukraine and the EU. Setting the task, the purpose of the study. Highlighting the state of investment and financial cooperation between Ukraine and the EU at the current stage of Ukraine's European integration. Method or methodology for conducting research. System and structural approach, method of logical analysis, statistical method, method of graphic analysis, method of comparison, method of structuring. Presentation of the main material (results of work). The paper describes the political background for investment and financial cooperation between Ukraine and the EU. The analysis of foreign direct investments in Ukraine by countries of origin and by areas of attraction is carried out; the dynamics of direct investments from EU countries in Ukraine's economy for 2010-2019 is described. The current state of application of the valid instruments of investment and financial support given to Ukraine by the EU is analyzed. The areas of priority attention in the process of implementing reforms in terms of attracting the investment from the EU are identified. The field of application of results. Research of Ukraine’s European integration problems, educational process (in the preparation of the relevant sections of textbooks and tutorials for courses “International Economics”, “Global Economics”, “Finance”). Conclusions according to the article. The EU sustainable financial support covers many sectors of the economy and public life in Ukraine, including agriculture, infrastructure, transport and energy, small and medium-sized enterprises, as well as democratic reforms, overcoming the effects of the COVID-19 pandemic, research and innovation, the environment, support for military conflict victims, etc. The EU supports Ukraine through various instruments, including macro-financial assistance, the European Financial Institutions (EBRD and the EIB), bilateral support from EU member states, the EU External Investment Plan, the European Neighbourhood Instrument, and the Instrument contributing to Stability and Peace. The volumes of EU foreign direct investment in Ukraine still remain low, and their structure by country of origin is not optimal. It is important for Ukraine to attract investments from the most developed EU countries, which is possible only if an attractive investment climate is formed, and the rule of law and the fight against the corruption are ensured.

Study on the spatial distribution of China's Outward Foreign Direct Investment in EU and its influencing factors

Since 2000s China's outward foreign direct investment (OFDI) in developed economies has grown rapidly, boosting the technological advancement of Chinese companies and the advancement of global value chains. In the context of the United States continuing to impose investment restrictions on China, the EU has an important position in the OFDI pattern in China. Although China's OFDI in the EU has maintained rapid growth overall, the location distribution is not balanced. This paper uses spatial measurement method to test China's spatial pattern change of OFDI in EU member states and finds that there are spatial agglomeration effects and spatial spillover effects. The spatial panel analysis method is used to test the factors affecting the spatial distribution China's OFDI in EU. It is found that the market size, technology level and investment freedom of the host country have positive effects on the location selection of China's OFDI in EU.

Foreign direct investment of the European Union in Poland

The development of the European Union is the issue of the greatest interest for different countries. The article examines the positive and negative effects of EU foreign direct investment in Poland, the historical aspects of this issue and future perspectives. The article reflects with the complex results of the integration on the example of the accession of Poland to the EU. Poland's potential successes after accession are explored, such as economic growth, social development and political improvements. The environmental concerns, ethnic issues and other specific features of Polish domestic products are also discussed. The aspects of migration and unemployment, FDI investments in Poland before and after EU accession, social, economic, political and other concerns are in focus of this research. The article underlines that as a result of Poland joining EU, there is a need to advance Polish political and social concerns to have an option of choice for the country either to join or not to join EU. The problems of Poland development in the context of cooperation with EU and potential advancements of their mutual benefits are discussed.

The Impact of EU Preferential Trade Agreements on Foreign Direct Investment

AbstractAlthough North–South preferential trade agreements (PTAs) are expected to affect foreign direct investment (FDI), there is not much evidence to date on the impact of EU PTAs on the pattern of FDI. The aim of this study is to assess the impact of EU PTAs on the outward stocks of FDI of the EU. We estimate a model based on the knowledge‐capital theory of the multinational enterprise over the period 1995–2005 using a sample of 173 host countries. Explanatory variables include measures of the level of bilateral protection and a dummy to capture the impact of deep integration provisions of PTAs. A dynamic panel model with fixed effects is used in order to take into account the dynamic behaviour of FDI and the heterogeneity bias. Results show that EU FDI is both horizontal and vertical. The level of EU protection affects FDI negatively, while the impact of the tariffs applied by host countries varies across groups of partner countries. Deep integration provisions affect EU FDI positively.

EU enlargement and foreign direct investment into transition economies revisited

It is highly likely that EU accession negotiation had a large influence on foreign direct investment (FDI) into the Central and Eastern European countries involved therein. We found that as the membership talks progressed, the effect of attracting FDI to candidate states tended to increase gradually. It also became clear that EU member candidate countries experienced an adverse impact on FDI at the very final phase of the negotiation. This might have been due to the substantial revision of conventional FDI incentives, which most likely was the price paid for becoming new EU members. The relationship between the progress in the EU enlargement process and FDI received by the candidate countries was not a simple positive relationship, but followed a reverse J-shaped curve.

The Impact of Foreign Direct Investment from Major Source Countries on Turkish Trade with the European Union

The available literature on the relationship between foreign direct investment (FDI) and trade has so far shown mixed results. Although traditional trade theory showed that factor movements and trade are a perfect substitute, new trade and FDI theories argue that factor movements and trade can be either a substitute or complementary to each other, depending on the types of investment made by multinational enterprises (MNEs) and macroeconomic policies used by the host countries. This paper attempts to test empirically the existence of a long-run relationship between inward FDI and the trade performance of Turkey over the period 1976-2006 by applying the multivariate cointegration technique of Johansen and Juselius (1990). In particular, the effects of FDI from major source countries (i.e., the US, Japan, and the EU) are examined to see whether they have different impacts on Turkish trade with the EU. The results of the long-run export supply model indicate that both Japanese and EU FDI play a significant role in the level of Turkish exports to the EU market, while US FDI causes a reduction in the level of Turkish exports to the EU. Similarly, the results of the long-run import demand model show that EU FDI contributes the level of Turkish imports from the EU by raising demands for intermediate and capital goods from the home market, while Japanese FDI led to a decrease in the level of Turkish imports from the EU market.

Complementarity and Rivalry in EU?China Economic Relations in the Twenty-First Century

Economic dynamism in the People?s Republic of China over the past two decades, in contrast with sluggish growth in an enlarged European Union, makes the examination of contemporary and future EU?China economic relations all the more relevant. This examination is done by highlighting complementary and opposing forces between the two regions. It underlines the asymmetry in the trade relationship ? with a growing EU trade deficit ? and a declining share of EU foreign direct investment since the peak years in the late 1990s. In terms of trade patterns, a certain degree of complementarity still exists between the two regions, with China relatively engaged in low-knowledge-intensive industries (such as office machinery and computers), although the move up the value chain is rapid. This still leaves scope for a manufacturing?services complementarity. Areas of possible rivalry include the perception, by the EU, of an ?unfair? Chinese competition, the opacity of the Chinese market, and allegations of dumping by Chinese firms, an issue related to its non-market economy status. In the future, the fifth enlargement may lessen the complementarity (and therefore increase the level of competition), thus generating another challenge. Faced with these numerous challenges, a number of solutions are proffered, among which are multilateralism and cooperation on energy issues.

Impact of EU FDI on economic growth in Middle Eastern countries

This paper develops a simultaneous equations model to test the process of interaction between foreign direct investment (FDI), exports and economic growth in three Middle Eastern countries: Egypt, Jordan and Oman, and tests for any possible feedback effects. Most of the FDI in these countries flows from the European Union. The simultaneous equations model results suggest that higher rates of economic growth result in a greater inflow of foreign capital. The regression results also suggest that interest rate differentials exert a much stronger effect than economic growth on the attraction of foreign capital in the case of Egypt. However, this variable does not seem to play a significant role in the case of Oman. Moreover, the simultaneous equations model results suggest that there is a feedback effect in the relationship between economic growth and capital inflow in all sample countries. A greater inflow of foreign capital leads to growth in the exports of good and services. The expansion in exports leads to growth in gross national product that, in turn, encourages the attraction of more foreign capital.

The lack of European Direct Investment in the Arab Countries - Recent Tendencies and a Technology-Related Explanation

This article deals with foreign direct investment (FDI) flows to the Arab world. The first part compares absolute and relative figures on European FDI activities in the Arab economies with figures on EU investment flows to other parts of the world such as the non-Arab economies of Africa, Central and South America, the developing economies of Asia as well as the Central and Eastern European Countries in transition (CEEC). Furthermore, it compares EU FDI figures for the Arab world with the respective figures on the investment activities of EU countries in other economies of the Middle East. In the second part, it is argued that it is not only the quantity of FDI which affects the development prospects of the receiving economies. The quality of FDI - i.e. the areas of economic activities in which the investments are made, the technological level of the investment projects as well as their contribution to the strengthening of the receiving economies' international competitiveness - is at least as important. In addition, it must be taken into account that the state of the (potential) receiving economy's technological development in the broadest sense is a crucial determinant of the kind of FDI inflows as well as of the extent to which foreign investors' capital is attracted. Therefore, this article presents a technology-oriented approach in order to explain why Arab countries are still failing to attract considerable FDI that could more substantially contribute to the development of the national economies.

Foreign Direct Investment and Regional Attractiveness in the EU Integration Process

The analysis of foreign direct investment (FDI) in the EU regions has shown changes in both the sectoral composition and the geographical orientation of productive investments operated by multinational enterprises (MNEs). Such variations may be attributable to factors such as the ‘deepening’ of the integration process in the 1980s and the early 1990s and the change in the location strategies of MNEs. Assuming regions as units of analysis with regard to economic integration, this paper provides a first description of where and in which sectors inward FDI is located in Italy, by carrying out a simple analysis at regional level in the period 1985-95. It attempts to shed some light on the characteristic features of Italian regional systems in order to assess their degree of attractiveness for FDI. The geographical distribution of foreign plants in Italy emphasizes the historical imbalances affecting the country, stressing the concentration of FDI in a few advanced regions and the marginalization of the Italian Mezzogiorno. Furthermore, the analysis turns to investigate whether FDI follows regional specialization models by distinguishing between EU and non-EU FDI in sectoral and geographical terms. EU investors turn out to be increasingly related to the sectoral comparative advantages of regional economic systems, while the matching between the specialization of non-EU FDI and that of local firms is relatively less pronounced.