FDI Enterprises Research Articles

Can indigenous enterprises upgrade under open economy? The case of China

Purpose– The purpose of this paper is to econometrically examine whether indigenous enterprises can upgrade under open economy by using micro-firm data.Design/methodology/approach– In order to make clear the impact of outward development on the indigenous manufacturing export enterprises' productivity from micro level and to propose policy recommendation, the research group selected indigenous manufacturing export enterprises in Kunshan China as research objects and made a large-scale survey. Based on micro-firm data from survey, the paper carries out empirical analysis.Findings– After controlling some other variables including innovation activity, human capital and enterprises scale, empirical result shows that export activity, establishing connections with FDI enterprises, industry clusters formed under open economy all have significant and positive effect on upgrading of indigenous enterprises.Originality/value– This paper is the first to use micro-firm data obtained from survey to examine factors affecting indigenous enterprises' upgrading capability of China.

Institution Matter for Technological Changes in Transition Economy: A Comparison Between Japanese FDI and Private Enterprises in Vietnam

Institutions and technological changes have close-knit relationship. Institution can create constraints and incentives that have significant effects on the path of technological change. Especially, this issue attracts a lot of discussion in transition economies. Because technology plays an important role in economic growth and helps these countries catch up with developed countries more quickly. Vietnam- a transition economy- has had many policies which were aimed at promoting technological change. However, they have not really created incentives for the issues in enterprises. This paper is aimed at dealing with this problem thanks to institutional theory. Besides, we also mention similarities and differences between Japanese FDI enterprises and private enterprises in Vietnam by institutional theory. We begin with a brief overview of the economics of technological changes, and then examine theory and empirical evidence on case studies (Japanese FDI enterprises and private enterprises in Vietnam). Finally, we suggest some recommendations which based on results of research for Government and enterprises.

Computer Simulation on Agglomerating Location of Home-country FDI

FDI enterprises from the same source country agglomerated in a region in China, i.e., a geographical agglomeration, was a main trend in recent years. An oligopoly output competition model was therefore developed between FDI enterprises and host country enterprises, with a conjectural variable introduced to weigh up the cooperation level between relevant enterprises, thus simulating and analyzing the location choice behavior of the agglomeration of home-country FDI. It was found that foreign enterprises will locate in the medium or small city which has a certain agglomeration effect when foreign investment enterprises can constitute the strategic alliance to cooperate their yield incompletely. The less degree enterprises cooperate their yield is, the bigger agglomeration effect that the location of foreign capital enterprises requests.

Analysis of the FDI Effect on Energy Consumption Intensity in Jiangsu Province

Abstract This paper decomposes Jiangsu energy consumption intensity change from 1998-2008. And the energy consumption intensity is decomposed into FDI scale effect, FDI structure effect and FDI technology effect, using LMDI model. Decomposition and analysis results show that FDI scale effect reduces the energy consumption intensity. FDI structure and technology effect fluctuates and do not promote the reduction of energy consumption intensity, on the whole. Therefore, to reduce the energy consumption intensity of Jiangsu Province, we suggest that while expanding FDI scale, we should adopt unified energy-saving and emission-reducing requirements to FDI enterprises and domestic ones. Meanwhile, we should increase the foreign investment proportion in the technology-intensive industries and encourage FDI enterprises to use and exchange advanced energy-saving technologies. Moreover, we should adjust the distribution industry structure of FDI to optimize the industrial structure adjustment.

Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO 2) in Chinese provinces

Recognizing the complex inter-correlation between FDI, emission and the three economic determinants of emission, we constructed a simultaneous model to study the FDI–emission nexus in China by exploring both the dynamic recursive FDI entry decision and the linkage from FDI entry to final emission results under the intermediation of the scale, composition and technique effects. The model is then estimated on the panel data of China's 29 provinces' industrial SO 2 emission. Result shows that, exerting through different channels, the total impact of FDI on industrial SO 2 emission is very small. With 1% increase in FDI capital stock, industrial SO 2 emission will increase by 0.098%, in which the emission increase caused by impact of FDI on economic growth and composition transformation cancels out the emission reduction result due to FDI's impact in reinforcing environmental regulation. By introducing to the simultaneous system the recursive dynamism that supposes FDI entry decision to depend on last period's economic growth and environmental regulation stringency, our model also provides convincing supportive evidences for ‘pollution haven’ hypothesis. Although FDI enterprises in China generally produce with higher pollution efficiency, the rise in environmental regulation stringency still has modest deterrent effect on FDI capital inflow. Furthermore, the composition transformation impact of FDI in China seems to be dominated by the inflow of foreign capital pursuing a ‘production platform’ that provides lower pollution regulation compliance cost.

Foreign direct investment in the czech manufacturing sector

In the period of 1991-96 there were large volumes of foreign direct investment directed to various Czech manufacturing industries and services. Our empirical analysis has shown that enterprises of the manufacturing sector, into which the foreign capital was invested, were generally physical capital intensive and labor saving. At the same time, both capital and labor efficiencies in firms with FDI have been significantly above the domestic average. Another salient feature of the FDI enterprises is that they are very export intensive and, on the input side, they have a higher proportion of material inputs and thus relatively lower proportion of value added.