Foreign Direct Investment In Economies Research Articles

International Capital and Subnational Politics: Partisanship and Foreign Direct Investment in Mexican States

Do foreign investors have subnational political preferences? The political economy of foreign direct investment (FDI) involves not only choosing among host countries, but also the subnational location of the assets. However, factors affecting investors’ decisions about subnational location likely differ from the ones affecting international investment. This paper studies the effect of state-level partisanship on new FDI inflows to Mexican states. I argue that investors prefer states ruled by left-wing governors because they are more likely to invest in human capital. Statistical analyses using new data on subnational allocation of FDI in Mexican states between 1999 and 2017 support the main hypothesis. Given the persistence of authoritarian enclaves in Mexico, I also disentangle the effects of partisanship from subnational democratization. The partisan effect is independent from party turnover and political competition at the subnational level, and it is robust to different model specifications and estimation strategies. Additional evidence supports the plausibility of the argued mechanism.

Impact on the Mongolian Economy of Foreign Direct Investment in the Coal-Export Sector

This paper developed a recursive dynamic Computable General Equilibrium model to examine the impact on the Mongolian economy of Foreign Direct Investment (FDI) in the coal-export sector. Based on a 2014 Social Accounting Matrix, the model simulated two scenarios during the 2016-2025 period: 1) a business-as-usual scenario as a reference case that replicated the latest IMF projections for main macroeconomic variables; and 2) an FDI scenario in which the coal-export sector received 1 trillion MNT over four years between 2019-2022, which increased production capacity in 2023. Although FDI increased GDP, employment, private consumption, and investment while decreasing budget deficits and public debt, it altered the structure of the economy and created a Dutch disease effect.

FDI Deregulation Versus Labor Market Reform: a Political Economy Approach

This paper studies the political economy of foreign direct investment (FDI) in interaction with labor market policies. It analyzes the setting of reform focused on deregulating labor markets as a political compromise pressured by the lobbying of an industry lobby and a trade union. Using a common agency model of lobbying, we show that the interest group’s influence is socially distortive towards less deregulation. Also, our political economy framework shows that, for large countries, exogenous FDI liberalization policies lead to deregulation in the labor market. For small countries, such policies enhance more labor market rigidities.

Political Economy of Foreign Direct Investment: Globalized Production in the Twenty-First Century

This article reviews scholarly research on the political economy of foreign direct investment (FDI) over the past 20 years. FDI research during this period reflects FDI's rapid growth, particularly in developing countries, and the emergence of intense competition among countries to attract investments. Countries have grown more open to FDI as evidenced by FDI deregulation, generous financial investment incentives, and the adoption of international agreements. Although extensive research shows that multinational corporations prefer to invest in countries with strong property rights protections, whether incentives and international agreements help countries attract FDI remains contested. Scholars can advance research by disaggregating FDI into multinational firms' specific production activities because the scope for countries to compete for FDI and firms' sensitivity to property rights vary widely. More generally, scholars should recast the separate study of trade and FDI into the study of global production in which trade and FDI are inextricably linked.

Institution for risk sharing : international joint venture

International joint venture as a form of business organization has become quite important in the post-liberalization period. Although an international joint venture has an independent legal status, it is organized for the joint benefit of the foreign and local firm. An international joint venture, defined as an agreement about revenue and cost-sharing rules, can be designed to enhance the level of foreign direct investment under the presence of economic risk. For example, foreign direct investment in economies in transition and emerging markets may be discouraged by fluctuations in the value of local currency or market risk when the entire revenue is generated through local sales. We argue that a properly designed joint venture scheme between an international firm (source country) and a local partner (host country) may resolve such an economic incentive problem. (original abstract)

Big business and small states: Unilever and Norway in the interwar years1

In 1930, Unilever tried to take control of Lilleborg, Norway's most important producer of soap and vegetable oil, with the aim of wiping out most of Norway's independent margarine and soap industry. However, as the purchase was dependent on government concession, Unilever became embroiled in a power struggle with the Norwegian political authorities. The company was strongly criticized by Norwegian nationalists. The question of whether or not to let Unilever go forward became one of the most contested questions in Norwegian politics in the period. In the end, Unilever was allowed to go ahead with the purchase, but in return the company was forced to make substantial concessions. Expanding on Jones's framework for understanding the balance of power between multinationals and host governments, in this article it is argued that we must look beyond firm specific assets and a cost‐benefit oriented analysis of the relationship between multinationals and host countries to understand the end result. In this case, nationalism had a decisive impact. Unilever's acquisition of Lilleborg and the Norwegian response thus contributes to our understanding of the nature of multinational enterprise in the interwar period and of the political economy of foreign direct investment in general.

Nathan Jensen. Nation-States and the Multinational Corporation: A Political Economy of Foreign Direct Investment. Princeton, NJ: Princeton University Press, 2006. 193 pp. ISBN 0-6911-2222-9, $58.00 (hardcover); 0-691-1363-6, $25.95 (paperback).

Nathan Jensen. Nation-States and the Multinational Corporation: A Political Economy of Foreign Direct Investment. Princeton, NJ: Princeton University Press, 2006. 193 pp. ISBN 0-6911-2222-9, $58.00 (hardcover); 0-691-1363-6, $25.95 (paperback).

Nation-States and the Multinational Corporation: A Political Economy of Foreign Direct Investment

Nation-States and the Multinational Corporation: A Political Economy of Foreign Direct Investment. By Nathan M. Jensen. Princeton: Princeton University Press, 2006. 224p. $35.00. The dramatic increase in flows of foreign direct investment (FDI) during the last two decades of the twentieth century has been accompanied by an extensive literature dealing with the impact of multinational corporations (MNCs) on issues such as economic growth, poverty and inequality, the environment, and cultural diversity. As many of the concerns about these impacts, positive as well as negative, revolve around the question of markedly increased competition among states for MNCs, it is surprising how little attention has been paid to the political and economic factors that attract FDI.

Nation-states and the multinational corporation: a political economy of foreign direct investment

List of Illustrations ix Preface xi List of Abbreviations xv Chapter 1: Introduction 1 Chapter 2: Multinational Firms and Domestic Governments 23 Chapter 3: Theory 40 Chapter 4: The Race to the Bottom Thesis and FDI 53 Chapter 5: Democracy and FDI 72 Chapter 6: Veto Players and FDI 100 Chapter 7: The IMF and FDI Inflows 129 Chapter 8: Conclusion 146 Notes 157 References 167 Index 185

Foreign Investment and National Interests in the Russian Oil and Gas Industry

This article examines the political economy of foreign direct investment in the Russian oil and gas industry in order to explain the limited role of foreign capital in this sector. There are three forms of foreign direct investment in the Russian oil and gas industry: (1) joint ventures, (2) investment within the framework of a production sharing agreement (PSA) and (3) foreign equity investment. The development of these three forms of foreign direct investment is analysed with special reference to the interests of the parties involved, before a conclusion on the political factors determining the conditions for foreign investment is made.

Investing in Terra Incognita: Waiting and Learning

This paper analyzes informational aspects linked with foreign direct investment in economies that just open up to foreign investors and steer towards a market economy. From the viewpoint of foreign firms, such economies are still terra incognita as far as economic and practical conditions for setting up foreign direct investment are concerned. The best way to obtain relevant information is via the experiences from other investment projects. In this situation waiting may be advantageous for the firms, given that sunk costs have to be incurred in connection with investment and the investment decision can be postponed. However, since every investor provides a positive informational externality, this waiting is harmful for the investment process and for the economies themselves. Economic policies to correct the externality problem may thus be justified.

Investing in Terra Incognita: Waiting and Learning

This paper analyzes informational aspects linked with foreign direct investment in economies that just open up to foreign investors and steer towards a market economy. From the viewpoint of foreign firms, such economies are still terra incognita as far as economic and practical conditions for setting up foreign direct investment are concerned. The best way to obtain relevant information is via the experiences from other investment projects. In this situation waiting may be advantageous for the firms, given that sunk costs have to be incurred in connection with investment and the investment decision can be postponed. However, since every investor provides a positive informational externality, this waiting is harmful for the investment process and for the economies themselves. Economic policies to correct the externality problem may thus be justified.

Japanese Manufacturing Investment in Europe: Its Impact on the UK Economy.

Japanese manufacturing investment in the European Community has grown dramatically over the last twenty years. At first, instances of investment were few, concentrated in a small number of industrial sectors. But since the mid-1980's there has been a surge of investment in a much wider range of industries. This volume details the growth of Japanese manufacturing investment in Europe in fourteen industrial sectors. The impact of Japanese competition and direct investment on European industries is considered in the context of the emergence of the three major trading blocs: the United States, Japan and the EC. Roger Strange concludes by making important policy recommendations, and arguing for the need for a new theoretical framework for assessing the political economy of foreign direct investment.

The Political Economy of Foreign Direct Investment in Latin America

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Robart Gilpin, U.S. Power and the Multinational Corporation: The Poltical Economy of Foreign Direct Investment, Basic Books, Newyork, 1975.

Robart Gilpin, U.S. Power and the Multinational Corporation: The Poltical Economy of Foreign Direct Investment, Basic Books, Newyork, 1975.

U. S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment.Robert Gilpin

Previous articleNext article No AccessBook SectionU. S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment. Robert Gilpin Charles F. DoranCharles F. Doran Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The Journal of Politics Volume 38, Number 4Nov., 1976 Sponsored by the Southern Political Science Association Article DOIhttps://doi.org/10.2307/2129513 Views: 57Total views on this site Copyright 1976 Southern Political Science AssociationPDF download Crossref reports no articles citing this article.

U.S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment

U.S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment

U. S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment, by Robert Gilpin

U. S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment, <i>by Robert Gilpin</i>