Foreign Investment Companies Research Articles

The Effect of Competitive Strategy and Product Quality on Business Performance Study On: Unilever Indonesia Tbk

Currently, in the global market era, many daily necessities are circulating in the world goods market domestic and foreign products. Many companies are developing in Indonesia, both domestic companies and foreign investment companies. One of them is Unilever Indonesia which operates in the primary consumer sector. This research aims to describe efforts to create the influence of competitive strategy and product quality on business performance at Unilever Indonesia Tbk. The urgency of research is to fulfill assignments for the Strategic Management course and as a requirement to take the Final Semester Examination. This research is intended for readers as supporting material for further research in the future and is also useful for writers to develop the process of creating scientific work. This research uses a descriptive quantitative approach method with Explanatory Research research, using annual financial data for the last 3-year period. This method aims to find variable relationships that exist in a community. Using company financial reports to determine the results and influence of competitive strategy and product quality on company sales over several decades and determine the effectiveness of company strategy in the company's business performance. This research was created based on references from several journals by previous researchers with variables that are closely related to the title of the research created by the author.

Exploring the Differences in Innovative Work Behavior and Workforce Agility Between Korean and Indonesian Employees: A Cross-cultural Study in a South Korea FDI Company

The expansion of South Korean foreign direct investment companies in Indonesia has led to the possibility of cultural challenges arising among workers in multinational corporations. Additionally, there are notable differences in the innovation and agility indexes of Indonesia and South Korea in 2022. These disparities in performance may perpetuate stereotypes that suggest that innovation and agility are unique qualities exhibited by employees from each respective country. The objective of this study is to investigate whether there exist variations in the innovative work behavior and workforce agility of Indonesian and South Korean employees who work in the same organization as part of cross-cultural research. The theoretical framework for this research is Hofstede’s cultural dimensions theory, specifically the dimensions of long-term orientation and Stereotype Threat Theory, which are used to explain the phenomenon. This study used a quantitative approach and had 30 participants who worked at a South Korean FDI company. The participants were chosen through convenience sampling. The research tools included the innovative work behavior scale and the workforce agility scale. Data were analyzed using the Mann–Whitney U-Test and descriptive analysis. Based on the research findings, it appears that employees from different cultural backgrounds working in the same organization do not exhibit significant differences in terms of their innovative work behavior and workforce agility. This was observed in a case study conducted at a South Korean FDI company located in East Java.
 Keywords: Indonesia, innovative work behavior, South Korea, workforce agility

Natural Resource Management: Legal and Governance Issues of Reko Diq Project

Balochistan Province of Pakistan is gifted with enormous reserves of minerals owing to its unique geological condition. One of the most important mineral resource projects is the Reko Diq mining project which is one of the largest projects of its kind globally. The Reko Diq mineral resource located in the mineral-rich Tethyan belt was discovered by the Geological Survey of Pakistan (GSP) from 1960 to 1970. The estimated reserves of Reko Diq comprise 12.3 million tons of copper and 20.9 million ounces of gold. However, the Reko Diq project became embroiled in legal disputes and controversy when the Balochistan government, represented by the Balochistan Development Authority, signed agreements with foreign investment companies for gold and copper exploration in the area of Reko Diq at Chagai. This research paper examines the establishment of the Chagai Hills Exploration Joint Venture Agreement (CHEJVA), analyzes the Supreme Court's decision on Pakistan regarding Maulana Abdul Haq Baloch's case against the government of Balochistan, and highlights the arbitration proceedings of the International Centre for Settlement of Investment Disputes. The research also concludes that an American mineral company Broken Hills Proprietary (BHP), took advantage of the unstable political situation in Balochistan under the caretaker government in 1993. The Balochistan Mineral Rules, 2002, were enacted to grant undue relaxations favoring foreign companies. These issues significantly impacted the validity of the Reko Diq agreement. Consequently, this case created an impression that foreign investments are not secure in Pakistan, necessitating actions to protect their interests. Moreover, the Reko Diq case had various economic impacts on Pakistan and hindered the development of the province and the country. This research paper recommends reforms in the legal framework of the mineral sector and advocates for advanced equipment in exploration to create employment opportunities. Additionally, establishing a domestic dispute resolution forum is proposed as a more favorable approach for settling such disputes, rather than resorting to international jurisdictions.

Pengaruh Struktur Kepemilikan Dan Karaktresistik Perusahaan Terhadap Tax Avoidance

Many companies can carry out many strategies in carrying out tax planning. One of the tax planning strategies is tax avoidance, namely how to reduce taxes legally. Tax avoidance practices usually take advantage of weaknesses in tax law and do not violate tax law. Besides doing tax evasion by using tax law loopholes (loopholes). This tax avoidance strategy (tax avoidance) is a method that is permitted by law but the strategy implemented by this company still receives state revenue, Related to this tax avoidance in Indonesia in 2005 there were 750 foreign investment companies that suspected of committing tax evasion by reporting losses in 5 consecutive years and not paying taxes. The objectives of the research were to examine and analyze the influence of stock ownership majority, leverage, capital intensity, and profitability toward tax avoidance. In this research, tax avoidance produced by Current Effective Tax Ratio (CETR). The population and sample of this research is the mining companies that listing in the Indonesian Stock Exchange (BEI) at the period 2010-2014. The sample of this research was 8 mining companies with 40 data observation. The method used in this research was multiple linear regression models. In this research, the data was processed by using IBM software Statistical Package for Social Science (SPSS) version 22. The results of this research indicated that leverage and profitability did not give significant effect toward tax avoidance. Meanwhile, majority stock ownership and capital intensity was gave negative effect toward tax avoidance.

Application of Low-Carbon Measures in Logistics Service Providers in Vietnam: A Comparative Study between Domestic and Foreign-Invested Companies

The logistics industry has been as a significant contributor to carbon emissions. Within Vietnam’s logistics sector, there is a notable contrast in terms of the quantity of foreign and Vietnamese companies and their respective market shares. This article used a structured survey and descriptive analysis to investigate the low-carbon-emission measures employed by domestic and foreign-invested logistics service providers (LSPs), comparing the results of these two groups, and in-depth interviews were applied for further discussion. The relevant literature was reviewed and expert insights were used to develop a comprehensive questionnaire, resulting in 166 completed responses, of which 159 were suitable for data analysis. The findings reveal variations in the degree to which low-carbon practices are adopted by foreign and domestic firms. In addition to changes in transport modes and the use of energy-saving lighting, the adoption levels of other low-carbon practices show that foreign LSPs exhibit higher engagement compared to their domestic counterparts. This can be attributed to their extensive global operations, greater access to capital resources, and a greater awareness of the importance of green initiatives in developed countries. In conclusion, this study conducts a comparative analysis between foreign-invested and domestic firms, which has not been previously investigated.

Picking winners in strategic emerging industries using government subsidies in China: the role of market power

This study explores the effects of government subsidies on company labour productivity in strategic emerging industries under conditions of market power in downstream and upstream markets. A sample of 1392 listed companies from emerging industries in China from 2006 to 2019 is used. Labour productivity will be lower in companies with high seller power. The positive effect of subsidies on labour productivity will be enhanced when firms possess higher seller power, whereas the positive effect of subsidies on labour productivity will be weakened when firms possess higher buyer power. Heterogeneity analysis shows that the role of market power is more evident for domestic enterprises compared to foreign investment companies. The mechanisms of picking winners based on government subsidies should take the effects brought by various degrees of market power into account.

Comparative Analysis of Indonesia’s Minimum Capital Requirements for Foreign Direct Investment

This research seeks to examine the compatibility of the Indonesian minimum capital requirement for foreign direct investment companies (FDI) with the national treatment obligation under international investment agreements (IIAs). The requirement is compared with investment requirements under Australian and Austrian Law. This research combines the normative legal research method with law and economics by conducting cost and benefit analysis (CBA). The national treatment protects foreign investors from less favorable treatment against domestic investors. The minimum capital requirement is contrary to national treatment because it is only applicable to FDI companies. However, not every IIA involving Indonesia provide a national treatment clause. To determine violation, the two-tier test must be conducted by analyzing the scope of the obligation and applicable exception. Some IIAs provide exceptions where a state can give different treatment to foreign investors for the sake of public interest. Indonesia justifies this requirement because it gives several benefits namely preventing foreign investors from controlling vital sectors, protecting MSMEs from unfair competition, and ensuring liquidity. Nevertheless, the benefits cannot be achieved due to weak supervision. The requirement can be easily circumvented through nominee agreements. Based on CBA, the requirement creates more harm than good. It is promiscuously applied to all business fields and is more burdensome compared to investment requirements in Australia and Austria. The solution proposed is either improving supervision or adjusting the requirement to be more consistent with the national treatment. The government can also protect national interests by empowering MSMEs and using more relevant criteria.

Tinjauan Yuridis Peran Negara dalam Kemitraan antara Penanam Modal Asing sebagai Usaha Besar dengan Usaha Mikro, Kecil, dan Menengah

One of the ways that can be made by Micro, Small and Medium Enterprises in developing their business is through partnerships with Large Enterprises. The partnership pattern is a strategy mandated by the provisions of laws and regulations. In order to ensure that this partnership pattern runs well, the role of the state is important. The problems to be discussed in this paper are related to the role of the host country in foreign investment activities, as well as partnership arrangements between Foreign Investors in their role as Large Enterprises with Micro, Small and Medium Enterprises in Indonesia. This paper is prepared with normative juridical research with an analytical descriptive approach, which aims to describe and analyze systematically, factually, and accurately about the facts, as well as the relationship of the phenomena being investigated. The results of the study conclude that the state plays a role in controlling the flow of foreign investment by applying national provisions that accommodate the interests of foreign investors, but still pay attention to national interests by applying a number of requirements or restrictions on the entry of investment or investment in its territory, for example by applying partnership provisions between Large Enterprises which may take the form of Foreign Investment Companies with Micro, Small and Medium Enterprises.

Strategy of investment attraction for the development of rural areas for the economic restoration of the agricultural sector

The research aims to study the implementation of a strategy for attracting investments to develop rural areas, which, based on the use of an investment platform and stimulation of business processes, allows for accelerating the reconstruction of infrastructure facilities in the countryside, involving interested investors in the cycle of economic restoration of the country’s agrarian sector. The research was conducted using the following methods: analysis of indicators in the structure of foreign investments; analogies and comparisons of directions of capital investments by private investors for the development of rural areas; inducing macro factors that hinder the implementation of investment policy; synthesis of indicators of the profile matrix of SWOT analysis and PEST analysis; creation of spatial models of landscapes of investment sites. The results of this study are the identification of priority foreign investment companies of the countries of the world, which ensure the attraction of direct foreign investments in the agricultural sector of the economy of Ukraine. Based on SWOT-analysis and PEST-analysis matrix profiles, macro-factors of the internal and external investment environment of rural areas are determined, which have a significant impact on the acceleration (inhibition) of the implementation of the investment platform and stimulation of business processes for the reconstruction of infrastructure facilities. A three-level profile of the landscape of the platform of investment and stimulation of business processes for the reconstruction of infrastructure objects of rural areas in Ukraine was modelled

Accounting Treatment of Drilling and Development Expenses Between the International Reporting Standard Ifrs 6 and the Unified Accounting System (A Comparative Study)

Purpose: The purpose of this research is to identify the accounting treatments for drilling and development expenses in the Iraqi oil companies according to the unified accounting system, and to indicate the extent of compatibility and difference in the treatment of drilling and development expenses between the unified accounting system and the International Financial Reporting Standard IFRS 6. Theoretical framework: The oil industry includes many activities and operations, starting from research and exploration operations through drilling and development operations, and ending with extracting oil from the well and delivering it to the consumer or transferring it to the refining industry. During these activities expenses are realized that should be accounted for in a way that ensures compliance with international standards for the oil industry as Iraq particularly witness a great development in the oil industry represented in dealing with foreign oil investment companies which means the need to standardize accounting treatments for the oil industry between local oil companies and foreign oil companies. Design/methodology/approach: The research used comparative descriptive approach by comparing the accounting treatment of drilling and development expenses under the International Financial Reporting Standard IFRS 6 and the unified accounting system applied in Iraq represented by the Basra Oil Company and the Iraqi Drilling Company. Findings: One of the most important findings of the research is the concord of the method used by the Basra Oil Company in capitalizing drilling expenses at the expense of wells under operation with the philosophy of the total cost method approved by the standard. However, this agreement is conditional on the absence of dry wells. If the drilling operations resulted in the presence of non-productive or productive wells but in uneconomical quantities, the treatment becomes not compatible with the standard. The practical and social implications: The Basra Oil Company treats all development (maintenance) expenses as operating expenses that are closed at the end of the year in the income statement, this it is not consistent with the philosophy of Standard No. 6 which states that development expenses that aim to maintain the production capacity of the well should be treated as operating expenses, but if development expenses that aim to increase the production capacity of the well must be capitalized on the cost of the well. Originality/ Value: The importance of the research comes from the need to work on applying the requirements of the International Financial Reporting Standard IFRS 6 in accounting treatments for oil expenditures, including drilling and development expenses in Iraqi oil companies.

Original scientific article Evolution and Prospects of the Foreign Investment Law of the People’s Republic of China

On January 1, 2020, the Foreign Investment Law of the People’s Republic of China came into force. It is the first comprehensive body of law governing the main aspects of foreign investment in the Chinese economy. The new legal regime for foreign investment has been formed taking into account the changes and real needs of the economy, both international and domestic. With its adoption, a unified legal regime for foreign investment was established, and the legal gaps that existed in the previous legislation were filled. First of all, the state unified the organizational legal forms of companies with foreign investments. Innovation was also shown in the management scheme at the pre-investment stage, at this stage a so-called negative list is created for foreign investment. It includes sectors of the economy in which foreign investment is prohibited or restricted. In other economic areas, foreign investments are allowed without restrictions. Unlike the previous period, the Law of the People’s Republic of China on Foreign Investment establishes the principle of national treatment for foreign-invested companies. By this, they are equalized in rights and obligations with legal entities using exclusively Chinese capital; the legal statuses of foreign and Chinese investors are also declared identical. These features are designed to more actively support foreign investment and protect the rights and legitimate interests of foreign investors, but taking into account the interests of Chinese investors. In addition to the Law, there is a “Regulation on the Application of the Foreign Investment Law of the People’s Republic of China”. It clarifies key concepts and basic regimes under the provisions of the Law of the People’s Republic of China on Foreign Investment, strengthens incentive measures and ways to protect the rights of investors, as well as the corresponding legal responsibility. In the future, it is necessary to more clearly define the legal issues that are not set out in the Law of the People’s Republic of China on Foreign Investment, including clarifying some legal concepts, adjusting procedures more clearly, and improving the security inspection system.

Interrogating the environmental accountability of foreign oil and gas companies in Basra, Iraq: a stakeholder theory perspective

PurposeThis paper aims to interrogate the accountabilities of the foreign companies which have directly invested in the Iraqi oil and gas industry.Design/methodology/approachUsing both qualitative and quantitative methodologies, the authors first map the stakeholder accountabilities (qualitative) of foreign oil and gas companies and second, the authors seek to demonstrate quantitatively – through structural break tests and publicly available sustainability reports – whether these companies have accounted for their environmental and social impacts both to Iraqi people and to the global community.FindingsThe authors find that the Western democratic values embedded in stakeholder theory, in terms of sustainability, do not hold the same meaning in cultural contexts where conceptions and application of Western democratic values are deeply problematic. This paper identifies a crucial problem in the global oil supply chain and problematises the application of traditional theoretical approaches in the context of the Iraqi oil and gas industry.Practical implicationsImplications of this study include the refocus of attention onto the local and global environmental impacts of the Iraqi oil and gas industry by foreign direct investments. Such a refocus highlights the reasons and ways that decision makers should accommodate these less salient stakeholders.Originality/valueThe primary contribution is the critique of the lack of environmental accountability of foreign direct investment companies in the Iraqi oil and gas industry. The authors also make theoretical and methodological contributions via the problematisation of the cultural bias inherent in traditional stakeholder theories, and by introducing a quantitative method to evaluate the accountabilities of companies.

Impact of foreign direct investment on competitive advantage in the oil and gas industry

Subject. The article considers the impact of foreign direct investment on the world's largest oil and gas companies. Objectives. The focus is on the analysis of forms and characteristics of foreign direct investments and their impact on increasing the competitive advantages of oil and gas companies. Methods. The study employs analytical and comparative research methods. Results. It is established that foreign direct investment plays an important role in maintaining the competitive advantages of oil and gas companies. We proposed a number of measures to increase the competitive advantages of oil and gas industry enterprises. These measures relate to such areas of activity as mergers and acquisitions, capital controls of foreign investment companies, yield enhancement of foreign investments, etc. Conclusions. The center of global energy consumption is shifting from developed countries to emerging market countries. Large oil companies usually use foreign direct investment to obtain the right to develop oil fields in oil-producing countries, which significantly increases the income from oil exploration abroad. Oil and gas companies can improve their competitive advantages by improving the financing policy of foreign oil and gas investment projects and refining the insurance system for foreign oil and gas investments.

Factors affecting satisfaction with the postal delivery service

The delivery service industry is boosting too much under the influence of e-commerce. So, there is a need to reform the delivery of the postal sector to meet the needs of consumers. Most of the postal offices have been served via government to government (G2G), and in recent years, due to e-commerce and corona disease, they have been developing business to consumer services (B2C), business to business (B2B), and direct to customer (D2C). The study examines how service quality affects customer trust, consumer satisfaction, and customer loyalty in the postal delivery service. It aims to provide information to delivery service companies and foreign investment companies in making strategic decisions. All structures are measured on a seven-point Likert scale. A total of 290 valid responses were used out of 358 distributed surveys, excluding 68 responses with irrelevant and incomplete data. These were analyzed using SPSS 21.0 and AMOS 20.0 statistic package programs. The outcome of the analysis showed that the four components of service quality constructs of delivery service have no significant effect on trust. However, they affect satisfaction, while tangibility and empathy have not shown such trustworthy effects on customer fulfillment.

부산 외자 유치를 위한 부산항 항만배후단지 활성화 방안 연구

Busan, which has a world-class port, has favorable conditions for attracting overseas investment, but its growth is not high compared to other ports abroad and in Korea in recent years. Against this background, the purpose of this study is to derive measures and implications to revitalize the Busan Port Distripark in order to revitalize investment attraction in Busan. The following measures were derived as a result of a survey on foreign-invested companies in Busan, an IPA analysis of difficulties, and a case analysis of the China port Distriparks. First, it is necessary to establish a one-stop logistics and administrative service support system by integrating the distributed administrative support system. In addition, a legal system to support this is required. Second, it is necessary to improve marketing and additional infrastructure that emphasizes Busan's competitiveness in SOCl. Air-land(Train)-Sea transportation infrastructure and convention facilities are the advantages of Busan, so it is necessary to further improve them and develop them into the e-commerce area. Third, it is necessary to establish a legal basis for investment support only for foreigners by enacting the Busan Metropolitan Government Ordinance on the Promotion of Foreign Investment. Fourth, it is required to create infrastructure such as education, hospitals, and housing that workers in foreign-invested companies and their families can live in comfort.

Labor and infrastructure factors affecting provincial distribution of foreign direct investment in Vietnam

The study assesses the influence of labor and infrastructure on attracting foreign direct investment (FDI) to the provinces of Vietnam in the period of 2009 - 2020. Research results from linear regression model and random effects estimation method have confirmed the importance of human capital and infrastructure in attracting FDI. The labor-related aspects in this study confirm that tendency of MNEs focusing on labor-intensive industries in Vietnam has not changed. The study also provides policy implications as building and improving the quality of infrastructure with the main goal of reducing inequality in attracting more FDI inflows to Vietnam's provinces in the near future. In addition, the workforce needs to have a plan to prepare themselves with solid knowledge and necessary skills to hone and absorb the know-how transferred from foreign investment companies, to have an ability to contribute to the development of the quality of our country's human resources.

Modelling the impact of coal seam methane on the Mongolian economy

Energy independence is one of the most important issues for almost every country and the world. Mongolia strives to have various types of energy sources and reduce energy dependence. Energy dependence always influences economic dependence of any country. Utilising its own country’s resources is optimal to reduce energy dependence. In recent years, the Mongolian Government has been encouraging unconventional oil and gas exploration and foreign investment and implementing supporting policies, such as coal bed (seam) methane. As a result of these activities, unconventional oil and gas investment and exploration have been intensified in the last few years in Mongolia, especially during pandemics. There are 32 oil and gas blocks in Mongolia and coal bed methane exploration and foreign investments have been invested in eight blocks. In 2022, some foreign investment companies are going to introduce proven reserves of coal bed methane to the Mongolian Government and Parliament. Therefore, we have to model the positive and negative impacts of coal bed methane on the Mongolian economy and find methods to increase the positive sides. Unfortunately, there is no experience in any situation for unconventional oil and gas exploration, extraction, and field development. Because of it, we have cooperated with Australian scientists and experts and completed some studies for making a model of the impact of coal seam methane on the Mongolian economy. For today’s condition, the Mongolian Government or Mongolian private companies can’t process coal bed methane activities because of lack of capital expenses and experience. To raise the positive impacts of coal bed methane, foreign investment is of course very important. There are some main purposes to model the impact of coal seam methane on the Mongolian economy.

Evaluation of the Classification of Liabilities or Equity on Convertible Bond Issuance Transactions at PT ABC

This research aims to evaluate the implementation of PSAK 50 (2014) in determining the classification of liabilities or equity on convertible bond issuance transactions at PT ABC. PT ABC is a start-up company with a status as a foreign investment company effective since third quarter 2020, which then issued convertible bonds in the fourth quarter 2020 which were entirely absorbed by only one party, XYZ. The convertible bond was issued as a payment instrument for the acquisition of 100% ownership in KLM, an overseas entity. This case study research uses qualitative descriptive analysis based on data analysis techniques, data reduction, data presentation, and conclusion drawing using text-based content analysis. The study demonstrates that it is important to consider a number of qualitative factors to ensure the true substance of the transaction is properly reflected in accordance with PSAK 50 (2014), and that the classification of an instrument as a liability or equity is heavily dependent on the specific facts and circumstances of the transaction. In this case, the results showed that the convertible bond instrument at PT ABC should be classified as equity rather than a liability. This conclusion is obtained by considering the substance of the transaction, including the fact that the convertible bonds have no contractual redemption or repayment obligations and are in substance mandatorily convertible into equity. Keywords: Convertible Bond; PSAK 50 (2014); Classification; Liabilities; Equity; Substance Over the Form

The effects of ICT and FDI on CO2 emissions in China.

With the rapid development of information and communication technology (ICT) and counter-cyclical expansion of foreign direct investment (FDI), most foreign-invested companies in China are highly polluting. Meanwhile, new research shows that the impact of ICT on the environment is uncertain. This study is an effort in dividing ICT into hardware and software, aiming to explore its effects on carbon (CO2) emissions from 2003 to 2017 in 31 provinces, autonomous regions, and municipalities in China and further explore the impacts of its application to foreign-invested enterprises on environmental quality. The findings show that ICT software has a significant negative effect on CO2 emissions, but ICT hardware and FDI have significant positive effects on CO2 emissions. However, when ICT software and hardware are applied to foreign-invested enterprises, they can significantly improve the environmental quality. Moreover, the durative innovation of ICT software ensures environmental sustainability. A set of government measures are published to help stimulate the positive effect of ICT software on CO2 emissions, such as taxes and fees cuts, and no-interest loans. This could provide guidelines for other countries.

Personal Tax Planning: What Is at Stake for US Beneficiaries of Canadian Estates

This article provides an overview of US tax issues that foreign estates with US individual beneficiaries may face. While families may implement planning strategies to effectively manage the transfer of wealth from a domestic perspective, US tax laws can create complex problems and at times adverse consequences for the unwary. The main goal of this article is to identify the general US tax considerations for a foreign estate, including the potential application of the anti-tax-deferral rules governing passive foreign investment companies (PFICs) and controlled foreign corporations (CFCs). A case study is included to illustrate how these rules may apply to US beneficiaries of a Canadian estate if the estate holds shares of a PFIC or a CFC. The article also offers a few guidelines and strategies to reduce potentially adverse US consequences and to mitigate some of the tax risks.