Foreign Investment Research Articles

Comparative Analysis of FDI Inflow in Emerging Economies

This comprehensive document offers an extensive comparative analysis of Foreign Direct Investment (FDI) inflows in emerging economics, with a primary focus on key emerging countries. These nations have increasing attracted foreign investor seeking new growth opportunities. The BRICS group which includes Brazil, Russia, India, China, and South Africa, stands out as an important subject for this comparative study. The main objective is to gain comprehensive understanding of the foreign direct investment (FDI) inflow patterns is developing countries over the previous decade, emphasizing temporal trends and assessing the profound impact of FDI on their economic growth. The methodology employed in this research involves secondary data analysis utilizing information from reports by institution like the Reserve Bank of India (RBI), Macro Trends and the Ministry of Commerce. The study also includes an in-depth review of research papers, thorough and a meticulous analysis of FDI inflow data spanning the last 10 years. To gauge the influence of FDI on economic growth, a rigorous regression analysis is conducted. Emerging economies have increasingly become hotbeds for foreign investment, attracting capital from across the globe. Investors seeking to diversify their portfolios have taken notice of these countries because they present a multitude of growth potential. The BRICS group is unique among these rising economies because of its size, diversity, and potential for economic growth. Over the past decade, the BRICS nations have experienced significant shifts in FDI inflows, reflecting the evolving global economic landscape. This analysis clarifies the factors driving these investments and their effects on economic growth, with a focus on comprehending the long-term trends in FDI inflows to these nations. It is imperative that investors and regulators alike comprehend these trends. In addition to providing overall FDI inflow statistics, the analysis looks at the industries and geographical areas that have drawn in a lot of foreign capital. Moreover, it examines the evolution of policies and regulations in these countries that have played a pivotal role in shaping FDI trends. The central theme of this research revolves around assessing the impact of FDI on the economic growth of the BRICS nations. In order to do this, we measure the impact of FDI on these nations' economic performance using rigorous regression analysis. This empirical analysis helps us understand how much foreign direct investment (FDI) has contributed to economic growth and whether this contribution differs across the BRICS nations. Key words – FDI, BRICS, Inflow, economic growth.

What investors want from whom: international organizations and the International Association for the Promotion and the Protection of Private Foreign Investments (APPI) 1958–1974

Abstract Using archival material from states, international organizations, and business actors, this paper explores how the Association for the Promotion and Protection of Private Foreign Investments (APPI), a transnational business interest association (BIA), liaised with different international institutions to lobby for better foreign investment protection. We zoom in on the United Nations, the Organization for Economic Co-operation and Development, and the World Bank to examine how APPI influenced the global institutional landscape during its heydays from 1958 until 1974. We show that business actors, particularly oil and banking corporations, created APPI as a nimble, efficient alliance that could move faster than existing BIAs. We further demonstrate how companies “forum shop” between different BIAs, and how APPI injected its ideas into the policymaking process, using the framework of the three faces of power. By shedding light on the role private business actors played in foreign investor protection, the paper contributes to a better understanding of the emergence of global economic governance in the second half of the 20th century.

The Effects of Foreign Direct Investment on Green Technology Innovation: New Evidence from China’s 278 Cities

ABSTRACT Foreign direct investment (FDI) has played a pivotal role in fostering economic development, and the FDI technology spillover effect is one of the core forces driving an open economy toward new green growth milestones. Evaluating the impact of FDI inflows on green innovation is essential for sustainable and environment-friendly city design. Based on the panel data of 278 cities in China from 2010–2019, we conducted an empirical analysis to test the impact and mechanisms of FDI on green technology innovation (GTI). The results demonstrate that FDI has a positive and highly significant effect on GTI. The channel analysis indicates that the FDI significantly stimulates urban GTI through two mechanisms: alleviating financing restraints and mitigating the risk of new GTI in the early stages. In the heterogeneity analysis, we find that the FDI effect is more pronounced in China’s resource-based regions with high levels of institutional and human capital and in regions with low-carbon pilot policies and good protection of intellectual property rights. Furthermore, the study shows FDI can affect GTI in neighboring areas through spatial spillover effects. Our findings underscore the importance of encouraging and sustaining internationalization in environmentally friendly sectors to foster green transformation. In essence, developing foreign investment policies and enhancing the green technology spillover effect of FDI are vital for strengthening GTI capacity.

Japanese Cross-Cultural Management in Indian Business-to-Business Marketing Situations: A Study of Evolving Intra-Asian Differences in Cultural Values

ABSTRACT Purpose Extensive research has been conducted on cross-cultural comparisons between Eastern and Western organizational cultures in major trading domains. However, there is a lack of examination of intra-comparative management nuances within Asian regions. This research paper focuses on the under-explored topic of the values, beliefs, and attitudes (VBAs) that influence the outcomes of East Asian (e.g. Japan) marketing strategies and operations when implemented in South Asian (e.g. India) markets and organizational contexts. The study aims to analyze the impact of VBAs on marketing effectiveness and provide insights for marketers in cross-cultural settings. The article analyzes the customer satisfaction orientation (CSO) of Japanese business executives and draws insights that offer lessons related to cultural VBAs for overall marketing strategy and foreign investors. Methodology/approach The paper employs a social constructivist paradigm and gathers empirical research through multiple interviews. These facilitate novel and normally rare access and insights into Japanese business leaders’ lived experience of CSO in B2B Indian intercultural situations. Findings Interpretivist data analysis reveals several push-pull factors that influence CSO practice. The research identifies shared values such as long-termism and harmony that have the potential to boost CSO as a marketing strategy in India. Research implications The paper develops a conceptualization of cultural VBAs that lead to successful CSO practice in India and is of relevance to foreign investors. Practical implications This study suggests that East Asian marketers should carefully consider the impact of VBAs on their marketing strategies. Our research sheds light on the ongoing discussion on static versus evolving nature of culture and highlights the need to pay attention to cultural change, particularly congruence and confluence in workplace values. Originality The intercultural study contributes to the literature on international marketing strategy by highlighting the nature and importance of understanding traditional and evolving cultural VBAs for appreciating receptivity to adoption and thereby efficacy of home country marketing strategy.

Financial therapy for the Russian economy

Subject. The article addresses the monetary policy, balance of payments of Russia, securities market. Objectives. The aim is to assess the investment potential of the Russian economy, the banking system stability. Methods. The study employs methods of statistical analysis. Results. The paper shows that in the Russian economy, investment financing sources exceed the costs of net acquisition of non-financial assets. Opportunities to attract foreign investment by the middle of 2023 were largely lost. At the same time, there is an exponential growth in debt on loans from the non-financial sector, and an increase in the volume of intraday loans provided by the Bank of Russia. Conclusions. The nature of monetary policy is critical for Russia's economic development in the face of international sanctions.

Foreign direct investment, environmental regulation, and energy transition—An empirical study based on data from 38 OECD countries worldwide

AbstractThis study formulates a theoretical hypothesis regarding the intricate interplay among foreign direct investment (FDI), environmental regulation, and energy transition. To empirically validate this hypothesis, a comprehensive analysis is carried out on 38 member nations of the Organization for Economic Cooperation and Development (OECD) over the span of 2003 to 2020, utilizing a panel fixed effects model, a panel quantile model, and a panel threshold regression model. The findings of the research indicate that (1) FDI exhibits an inhibitory impact on energy transition and, according to the heterogeneity analysis, FDI significantly inhibits energy transition in developed nations. However, the inhibitory influence on energy transition in developing nations is not as pronounced. (2) A considerable amount of dampening influence is exerted by FDI on energy transition at various stages of the transition and is most apparent when the transition is in the growth phase. (3) A threshold effect is evident in FDI and environmental regulation in relation to energy transition owing to the mismatch between the two developments. Notably, the influence of FDI on energy transition significantly varies based on the stringency of environmental regulation. As formal environmental regulation surpasses a designated threshold, FDI shifted from facilitating to inhibiting the energy transition. The same conclusions were reached when informal environmental regulation was considered as the threshold variable. Drawing from the conclusions of this paper, the countries of the OECD can develop a theoretical framework to formulate foreign investment introduction policies and regulate environmental regulation efforts to promote the energy transition.

Impacto macroeconómico de la dolarización en el Ecuador durante el período 2006-2023

The macroeconomic impact is crucial for determining the well-being of a country. Analyzing variables such as Gross Domestic Product (GDP), inflation, unemployment, investment, and foreign trade allows for an assessment of a nation's economic health and financial stability. This article aims to analyze the impact of dollarization in Ecuador between 2006 and 2023. Adopted in 2000 to stabilize the economy and attract foreign investment; dollarization presented monetary and fiscal policy challenges. Authors like Cachanosky and Alvarado highlight the challenges in fiscal control and the relationship between exports and external income. The study employs a quantitative methodology, with regression analysis and time series based on data from the Central Bank of Ecuador. The results show moderate GDP growth and gross investment, as well as fluctuations in liquidity and credit to the private sector, along with persistent inequality in income distribution. The conclusions indicate that while dollarization has contributed to stability, it has limited the country's monetary autonomy. Additionally, dependence on external factors, such as U.S. monetary policy, has affected Ecuador's economic stability. The importance of diversifying the economy, promoting policies that foster sustainable and equitable growth, and reducing vulnerability to external fluctuations is emphasized.

The Fishing and Aquaculture Production of Latin America with Respect to the Trade Balance and Foreign Investment

The Fishing and Aquaculture Production of Latin America with Respect to the Trade Balance and Foreign Investment

Правовые аспекты доступа иностранных инвесторов на рынок ценных бумаг Китайской Народной Республики

The People’s Republic of China is the second largest economy in the world. One of the foundations of China’s economic prosperity is a well-developed financial market and, in particular, the securities market. However, the implementation of investments in the Chinese securities market by foreigners is significantly hampered by administrative barriers and direct legislative restrictions. This paper analyzes the legal regime of foreign investment in the securities market of the PRC. The legal regulation of separate legal mechanisms aimed at realization of direct foreign investments in the PRC securities market, such as the status of a qualified foreign institutional investor, as well as exchange and depository links, is researched. The comparative legal aspect assesses the correlation of foreign investment mechanisms in Russia and China and, taking into account the existing characteristics, proposes measures to develop mutually beneficial ways of legal regulation for both countries.

The impact of stock market liberalization on management forecast precision–Evidence from Mainland-Hong Kong Stock Connect Programs in China

This study examines the effects of stock market liberalization, specifically through the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect initiatives (jointly referred to as MHKSCPs), on the precision of management forecasts and the underlying mechanisms. We find that post MHKSCPs, management forecasts become less precise for bad news and more precise for good news, leading to an overall decrease in precision. The channels include litigation risk and media/analyst attention. The results are particularly pronounced in firms without foreign investors, within industries with higher proprietary costs, or in smaller firms. Moreover, there is a decrease in the information content of management forecasts, management forecast optimism, and financial report readability post MHKSCPs.

Þarfir netsins

Sú fallvatnsorka sem seld hefur verið til stóriðju hefur skilað óverulegum hagnaði og fyrirséð er að hún mun ekki skila verulegum hagnaði nema dregið verði úr skuldsetningu raforkufyrirtækjanna. Söluverðið er þekkt og að hluta til fast. Væntingar um að stóriðja verði leið til að styrkja iðnað í landinu og auka fjölbreytni útflutnings hafa snúist upp í andhverfu sína. Stóriðjugeirinn skapar ekki fjölda starfa og margföldunaráhrifin eru ekki mikil. Þjóðhagslseg áhrif eru mest á byggingartíma virkjananna. Niðurstaðan er að virkjun fallvatna hefur skilað litlu; orkusölu til fimm fjölþjóðafyrirtækja og óverulegum skatttekjum, utan tímabundins orkuskatts sem nú hefur verið aflagður. Fræðileg nálgun er að mestu sótt til Max Weber; annars vegar tilgátunnar um yfirburði regluveldisins, læsingu ákvarðanatöku í járnbúr, og hins vegar um að markleitin skynsemi, verkfærnin, geti umpólast þannig að leiðin verði að markmiði. Þannig hefur virkjun og orkuveita orðið að sérstakri atvinnugrein sem hefur eigin vöxt að markmiði undir yfirskini arðsemi. Yfirlýst markmið um samfélagslega ábyrgð, skyldur við nærsamfélagið og ábyrga umgengni við náttúruna eru löguð að fyrirætlunum og framkvæmd, þ.e. "heildsölu á raforku til stórnotenda innan rammaáætlunar.

The Impact of Foreign & Domestic Investment on Export Processing Zones in Bangladesh: An Auto Regressive Distributed Lag (ARDL) Approach

Foreign Direct Investment (FDI) is a major force behind the integration of the global economy and has the potential to boost economic development in both investing and those receiving the investment. The majority of the study focuses on the influence of FDI on Bangladesh’s economic growth. A number of scholars have also looked at how FDI affects trade, domestic investment and other economic sectors. But surprisingly less research has been done on the effects of FDI on Bangladesh's export processing zones (EPZs). This study tries to investigate the impact of foreign and domestic investment on exports of EPZs between 2011-2022. To investigate EPZs export, this study used the Auto Regressive Distributed Lag (ARDL) approach. The Wald test was used to determine the direction of causation. The ARDL estimate shows that investment, GDP and FDI all have a positive correlation with rising EPZ export. The coefficient for FDI inflows is 0.15% which suggests that if FDI inflows raise by 1%, EPZ export will grow by 0.15% while all other factors stay constant. It also shows that a 1% increase in investment leads to 1.32% quicker growth in EPZ exports, assuming all other factors remain constant. The Wald test demonstrates the bilateral causal relationship between EPZ export & FDI and the unidirectional relationship between EPZ export & GDP. Therefore, Bangladesh must take immediate measures to protect potential foreign investors in order to provide a welcoming environment so that they can feel their contribution in the Bangladeshi business industry is respected.

Revaluating the Sustainable Development Thesis: exploring the moderating influence of Technological Innovation on the impact of Foreign Direct Investment (FDI) on Green Growth in the OECD Countries

The Sustainable Development Goals (SDGs) advocate for advancing green growth, a concept that balances economic prosperity with environmental protection. At the core of this vision are principles of sustainable consumption, production, and energy usage, all aimed at mitigating climate change and safeguarding ecosystems. This study investigates how technological innovation influences the relationship between Foreign Direct Investment (FDI) and green growth in OECD member countries. Specifically, we examine two facets of green growth: production-based CO2 productivity and demand-based CO2 productivity. We employ empirical analyses using the EKC and STIRPAT framework, which includes Ordinary Least Squares (OLS), smoothed instrumental-variables quantile regression (SIVQR), and System GMM methodologies, to uncover significant insights. Our analysis reveals that FDI impedes green growth, while technological innovation is pivotal in enhancing it. This pattern holds steady across various time frames and renewable energy sources. Furthermore, our findings indicate that combining FDI and technological advancement leads to heightened production-based CO2 productivity but diminished demand-based CO2 productivity. We also identify the presence of an environmental Kuznets curve for production-based CO2 productivity. Adding to significant scientific value by demonstrating how technological innovation moderates FDI's impact on green growth in OECD countries, we advocate for fostering collaborative partnerships between foreign investors and local innovators to leverage global expertise while advancing green objectives. Additionally, policy interventions should focus on stimulating demand for eco-friendly products and services to bolster demand-based CO2 productivity.

Frequent Trading and Investment Performance: Evidence From the KOSPI 200 Futures Market

ABSTRACTThis study explores whether frequent trading is profitable to investors in an emerging stock index futures market. Our analyses, based on long‐term data from 2010 to 2023, indicate that the effect of trading frequency differs across investor types and market conditions. Only some domestic institutions gain additional profits from more frequent trading, and such a tendency is apparent when the futures price falls and when the futures market volatility is low. Foreign investors experience losses as they trade more when the market is bearish and are frequently net long. The performance of domestic individuals does not depend on their trading frequency in general; however, they lose more from trading when the market is bearish and when the market is less volatile.

Developing Trust, Developing Economies: The Role of ESG Disclosure in Attracting Foreign Investment

Legitimacy theory posits that organizations strive to align with societal expectations to gain advantages, yet its focus has primarily been at the company level. The purpose of the study is to investigate the global applicability of legitimacy theory by examining the relationship between Environmental, Social, and Governance (ESG) disclosures and Foreign Direct Investment (FDI). In particular, the study sets the task: analyze the impact of ESG disclosures on FDI across twenty-eight countries; compare the ESG performance of different nations; and explore the role of regional ESG standards in influencing ESG performance and FDI. The application of the Kruskal-Wallis test revealed the dominant position of Western nations with developed ESG standards. The Bonferroni adjustment post hoc test on World Bank data indicated that countries with well-developed ESG standards act as global investors, trusting the high standards of rapidly improving Western regions. Statistical tests confirmed that countries in the developing stage, with values somewhat similar to the most developed areas, present attractive alternatives for foreign investors. However, the lack of standardized norms hinders the establishment of trustworthy economic relationships. These findings suggest that just as businesses use Corporate Social Responsibility (CSR) to gain legitimacy, countries can adopt ESG practices to align with global norms and attract FDI. Although this transition may be time-consuming, developing regional ESG disclosure norms could serve as an effective stepping stone.

The Use of Tax Incentives to Attract Foreign Investment to Ukraine: A Solution to the Current Economic Instability

This article analyses the effectiveness of existing tax incentives aimed at developing the Ukrainian economy and contributing to post-war reconstruction. Statistical economic analyses, trend comparison and forecasting were used to examine the incentive instruments. The article details various tax incentives and analyses the activities of international agencies and funds that provide security for such financing. Recent examples of international brands investing in Ukraine’s reconstruction are considered, as well as the State Tax Service of Ukraine’s guide to tax incentives. In addition, the article looks at the distribution of recovery investment projects, both by region and chronology.

The Exploration of the Remedies of Environmental Infringement by Multinational Corporations: Taking China as an Example

Under the background of an increasing number of multinational corporations, it is noteworthy that they can bring great benefits and harm to host states at the same time. Consequently, it is necessary for host states to build up effective regulations to deal with potential risks. This essay chooses to take China as an example. As the biggest developing country in the world, how to regulate foreign investments has become an imperative issue if China wants to achieve further and sustainable development. By introducing its current legislative system and displaying cases, this essay analyzes the deficiencies of the current regulation system from legislative and judicial aspects. Based on the above analysis, this paper also attempts to explore possible solutions to make up for the weaknesses. Ultimately, the author agrees to construct a more exclusive and comprehensive legal system for MNEs in China and refine the prevailing judicial remedies. The main methods used in this paper are literature analysis and comparative analysis.

Strategic prospects for using international experience of foreign investment in Armenia

The article analyzes the strategic prospects for creating stable conditions for attracting additional volumes of foreign investment in the Armenian economy, which is due to the lack of own funds for sustainable social and economic development. The relevance of issues related to the role and place of foreign investment in Armenia, occurring due to the globalization of the world and regional economy, creating or limiting conditions for the movement of capital, has increased sharply in light of the sharp intensification of the policy of attracting foreign investment in the South Caucasus region. The practical experience of the transition period of the market economy of Armenia is summarized, as the country became more dependent on the level of regional and global integration. At this time, flows of foreign capital emerged not only in the form of government borrowings, but also in the form of diaspora transfers, assistance from international organizations, and the creation of joint ventures with Armenian entrepreneurs. Restrictions on obtaining high technologies, both in the form of goods and technical documentation, and in the form of direct investment, were gradually lifted.

Economic and Environmental Degradation in ASEAN: A Focus on Indonesia, Singapore, and Myanmar

This study aims to analyze the determinants of greenhouse gas emissions in several ASEAN countries. The research utilizes secondary data from the World Bank covering the period from 1990 to 2019, employing panel data regression with Fixed Effect Model (FEM) estimation. The findings reveal that all independent variables in the study have a significant relationship with CO2 emissions, with coefficients below 1, indicating an inelastic effect. Specifically, higher GDP per capita increases CO2 emissions, while higher FDI reduces them. This suggests that while economic growth contributes to higher CO2 emissions, foreign investment may help reduce emissions. It is important to note that these results are specific to the countries studied (Indonesia, Singapore, and Myanmar) and cannot be generalized to other countries.

Effects of Inflation on the Rate of Returns of Commercial Real Estate Investment in South-South Geopolitical Zone of Nigeria

Commercial real estate investment returns have now taken on a greater significance in the development of the economy of any nation. The aim of this study was to evaluate the effects of inflation on the rate of returns in the south-south geopolitical zone of Nigeria. In order to attain the stated aim, the following objectives were set; to examine the inflationary trend in the study area; to determine the rate of returns of commercial properties in the study area and to establish a relationship between the inflation rate and rate of returns of commercial properties in the study area. The research employed the survey design. The independent variable was the inflation rate while the dependent variable was the rate of returns. Both descriptive and inferential statistics were employed in the analysis of the data, with the help of the SPSS and Microsoft Excel software. Primary data for this research was obtained from Estate Surveyors and Valuers in the study area through questionnaire survey. The data comprising rental and capital values of commercial real estate was subsequently translated to returns using the Holding Period Returns formula. Similarly, secondary data about inflation rates for the period between 2014 and 2023 were collected from the Central Bank of Nigeria. The research adopted the stratified random sampling technique to divide the South-South geopolitical zone of Nigeria into six (6) strata: each stratum representing each state and the data used for the research were analysed using simple linear regression model. The research found out that there was a persistent year-to-year rise in the rate of inflation. The research also found out that the highest return rate was observed in Bayelsa in 2014 when the rate of inflation was the lowest at 8.05%. On the other hand, in 2022, the lowest return was recorded in Edo State as 10.20 when the inflation rate rose to 18.85%. The study also presented the result of a simple linear regression analysis conducted between the actual inflation rates and the rate of returns of each of the six states. The study concluded that there was a statistically significant relationship between inflation rate and rate of return of commercial properties in each of the six states constituting the south-south geopolitical zones of Nigeria. The investment information provided in this study has significant implications for both local and foreign investors desiring to invest in the Nigerian commercial real estate market.