Foreign Investment Research Articles

How social and environmental investments attract and repel foreign investors: Insights on shareholder and stakeholder engagement

AbstractThis study investigates the diversifying impact of social and environmental investment (SEI) to attract and repel foreign investors (FIs) while determining to invest in environmental friendly firms. By analyzing SEI strategies within the Chinese context and employing panel data regression analysis, this study reveals numerous major insights. First, firms implementing average SEI strategies tend to attract greater investments from FI. On the other hand, above average SEI do not yield similar benefits, indicating that over‐investments in social and environmental projects could repel potential investors, and result in a transfer of wealth from shareholders to stakeholders. Furthermore, the present study reveals that firm performance strengthens the positive association between average SEI and FI. Finally, this study finds that the negative relationship between above‐average SEI and FI is intensified when firm performance is considered as a moderating factor. These insights are crucial for policymakers in formulating strategies to enhance foreign investments.

The carbon emission reduction effect of two-way foreign investment from the perspective of government environmental attention

The carbon emission reduction effect of two-way foreign investment from the perspective of government environmental attention

SHIPBUILDING OF SOUTHERN UKRAINE: FROM STATE MONOPOLY TO CLUSTER INTEGRATION

The purpose of this article is to determine the prospects of Ukrainian shipbuilding, based on a review of its historical development. Methodology. In this study, the authors used a mix of methods for collecting, systematising and processing information. Primary data was collected through a review of thematic publications and research conducted by predecessors. Retrospective analysis was used to identify trends in the historical development of the shipbuilding sector of the domestic economy. Statistical analysis was used to determine its current state and foreseeable future. Results. Since Porter's introduction of the cluster theory, the Ukrainian shipbuilding business has failed to take advantage of the benefits it has offered. It has been reckless in building cluster potential as a tool for local economic development and community (hromada) management. While most shipbuilding and related enterprises are concentrated in the areas limited by the administrative boundaries of the country's Black Sea regions. Pessimists insist that the chances of success have been lost completely and irrevocably. The authors, on the other hand, based on a generalisation of current practice, observe the Phoenix effect. The authors illustrate it empirically. In particular, on the example of the Ukrainian Maritime Cluster (UMC). Practical implications. The first part of the article explores the former power of Ukrainian shipyards. The second part discusses the constructive initiatives of the modern shipbuilding business. The third part highlights the initiative to create the UMC. Value / Originality. This paper adds to the existing understanding and provides empirical evidence of the strong and untapped potential of the country's shipbuilding cluster. It also focuses on its attractiveness for cooperation with foreign investors after the onset of peace. The originality of this study lies in the holistic study of shipbuilding practice in the context of development. The authors are optimistic despite the war and the tragic consequences that accompany it.

Is the country’s preparedness for epidemics and pandemics an FDI location factor? An empirical analysis using panel data

Purpose This study aims to validate the hypothesis that a country’s preparedness for epidemics and pandemics, as measured by the GHS Index, significantly influences inward FDI inflows. By examining panel data from 2019 to 2021, the research seeks to elucidate the impact of heightened epidemic and pandemic preparedness on investment behavior, thereby highlighting the importance of health resilience and preparedness in attracting foreign investment and fostering economic growth and development. Design/methodology/approach The study uses panel data spanning 181 countries from 2019 to 2021 and uses logarithmic regression models to analyze the impact of a country’s preparedness for epidemics and pandemics, as measured by the Global Health Security (GHS) Index, on inward Foreign Direct Investment (FDI) inflows. Auxiliary variables including GDP, labor supply, openness rate, inflation rate and political stability are incorporated. Robust weighted least squares estimation techniques are used to account for potential heterogeneity and panel data characteristics. Findings The study reveals a consistent and statistically significant positive relationship between a country’s GHS score and inward FDI, indicating that destinations with robust health systems are more attractive to investors. Higher GHS scores correlate with reduced investment risk, improved business continuity during health crises and enhanced health-care infrastructure, leading to a healthier and more productive workforce. Research limitations/implications While the study provides valuable insights into the relationship between epidemic and pandemic preparedness and inward FDI inflows, several limitations exist. The analysis relies on cross-sectional data from a relatively short timeframe (2019–2021), limiting the ability to capture long-term effects. Additionally, the study focuses on the GHS Index as a measure of preparedness, overlooking other potential determinants of FDI attractiveness. Future research could explore a broader range of health security indicators and incorporate longer-term data to provide a more comprehensive understanding of the relationship. Originality/value This study contributes to the literature by examining the previously underexplored relationship between a country’s epidemic and pandemic preparedness, as measured by the GHS Index and inward FDI inflows. By using panel data analysis and robust econometric techniques, the research provides empirical evidence supporting the positive impact of robust health systems on FDI attractiveness. The findings underscore the importance of prioritizing public health initiatives and epidemic preparedness as integral components of attracting and retaining foreign investment, thereby fostering economic resilience and sustainable development in host countries.

DOES CORRUPTION HAS A POSITIVE IMPACT ON ECONOMIC GROWTH?

The problem of corruption is a common problem and continues to this day in Indonesia. The level of corruption that does not improve causes losses and inefficiency in the economy. The high level of corruption has been an obstacle to economic progress and growth in Indonesia so far. This research aims to find out more about the impact of worsening corruption on foreign investment, the Rupiah exchange rate against the dollar, and economic growth. This research uses secondary data obtained from the central statistics agency for 16 years. Research data processing uses PLS. Based on the research results, it was found that the level of corruption affects the level of foreign investment and the Rupiah exchange rate against the Dollar but not economic growth. This research also found that foreign investment can mediate the relationship between the level of corruption and economic growth. In this research, it was found that the higher the level of corruption, the more foreign capital will enter. This is because countries with high levels of corruption have poor administrative systems so that by using bribes the investment process can run more easily. The greater the foreign capital that enters, the greater the capital in economic activities so that economic growth will increase. This is certainly not a good thing the Indonesian government needs to improve the quality of its bureaucracy so that corrupt practices do not get worse

The effect of foreign investors on local housing markets: evidence from the UK

The effect of foreign investors on local housing markets: evidence from the UK

The Impact of International Monetary Fund Arrangements on the Jordanian Economy: 1989-2022: An Empirical Study

Objectives: This study explores the statistical and qualitative impact of International Monetary Fund (IMF) arrangements on key structural variables in the Jordanian economy (1989-2022), including economic growth, balance of payments, external debt, unemployment, and Jordan's foreign investment attractiveness. It addresses the central question: What is the impact of the IMF arrangements on these variables of the Jordanian economy, and what are the reasons for the success or failure of these arrangements? Methods: The study used both the descriptive quantitative statistical method and the case study method, as a test of its basic hypothesis that there are negative correlation relationships between the IMF arrangements and the variables of the Jordanian economy. Results: The study found that the IMF arrangements have a negative impact on many variables in the Jordanian economy, such as unemployment, external debt, balance of payments, and economic growth. The study also found that the arrangements have had a weak positive impact on Jordan's attractiveness to FDI. The study found that corruption in Jordan plays a major role in the continued cooperation between Jordan and the IMF, despite the failure of its arrangements to achieve their objectives for more than three decades. Conclusions: The study found that the IMF arrangements have failed to achieve most of their economic targets with Jordan, and, therefore, there is no justification for continuing with more arrangements and programs of structural and economic reform without seriously reconsidering the various conditions that accompany them and that are demanded by the IMF from the Jordanian side

Investors’ reaction to banning IFRS use by domestic firms in alternative market

AbstractThis paper analyses the regulatory context, i.e., how IFRS preparers investing in Poland react to banning IFRS use by domestic firms in the alternative trading market (NewConnect) after six years of regulatory arbitrage. In other words, it studies their portfolio investment and foreign direct investment (FDI) outward sensitivity to the end of regulatory arbitrage opportunity given by the alternative market’s regulation in the country where accounting law limits IFRS use to regulated markets and business groups where the parent company uses IFRS. The contribution is built on the natural experiment of prohibition of domestic IFRS preparers issuing shares on the alternative (not-regulated and cheaper) trading market after 2012. The originality is delivered by implementing a de facto measure of IFRS adoption by foreign investors to identify a 69% growth rate of IFRS preparers investing in Polish firms in 2012 (317% growth of Swedish investors and 219% of Portuguese) that dropped to 8% in 2013 and 3% in 2018. Thus, we check whether investing decisions consider opportunities to gain funds or attract other investors and build trust through IPOs on the unregulated market dedicated to start-ups and engaged in R&D activity. We use difference-in-differences, GMM dynamic panel-data analysis with Arellano-Bond and Arellano-Bover/Blundel-Bond estimators for the Knowledge-Capital model on portfolio investment, outward FDI overall, and three FDI components based on debt, equity, and earning reinvestment in 2003–2019. We found that banning IFRS use by domestic firms in the alternative market discourages portfolio investments, debt-based FDI flows and FDI earnings reinvestment. Also, total FDI and equity-based FDI from countries with more IFRS preparers have been reduced since 2013 due to the IFRS ban for domestic firms.

Disentangling Legal Stability from Legitimate Expectations: Towards Greater Deference to Regulatory Changes in Renewable Energy Transition Policies in Investment Arbitration

Abstract The obligation of stability generally requires host States to maintain a relatively stable regulatory framework to mitigate political risks facing foreign investments. It has played a significant role in international investment tribunals’ review of host States’ renewable energy transition policies. This paper critically reviews tribunals’ interpretation of the obligation with a particular focus on the Spanish cases involving renewable energy incentive schemes. It canvasses the two ‘dimensions’ adopted by investment tribunals in the interpretation of stability, namely the protection of legitimate expectations and States’ right to regulate for public purposes. Examining the contents of the two dimensions separately, this paper argues that legal stability should be disentangled from the notion of legitimate expectations and be assessed through the reasonableness of regulatory changes per se. It further argues that an intrusive interpretation of legal stability lacks legal and institutional bases; instead, more deferential standards should be adopted in the review of renewable energy transition policies.

The Current Situation, Issues, and Improvement Measures of Foreign Direct Investment in China's Agricultural Economy

With the rapid development of economic globalization, the connections between countries have become increasingly close, and foreign direct investment has gradually become an important factor influencing the agricultural economic development of various countries. In order to achieve their own economic development, countries have actively sought to attract foreign investment. With China’s accession to the World Trade Organization and its active participation in global governance, attracting and utilizing foreign investment for domestic agriculture has become a strategic consensus for economic development amid intense global economic competition. This paper analyzes the history and current situation of foreign direct investment in Chinese agriculture, identifies the main issues faced by Chinese agriculture in utilizing foreign direct investment, and proposes corresponding solutions, including improving the foreign direct investment environment in Chinese agriculture and optimizing the structure of foreign direct investment sources.

Study on the Path of Synergistic Utilization of Foreign Investment in Chengdu-Chongqing Region in the Context of Domestic and International Two Circles of Economic Activity

Under the new development pattern of domestic and international two circles of economic activity, it is of great significance for Chengdu-Chongqing region to utilize foreign investment in a coordinated manner. This study focuses on the opportunities and paths for the coordinated utilization of foreign investment in the Chengdu-Chongqing region in this context, and based on this, it provides the corresponding policy recommendations to help Chengdu-Chongqing region to better exert its own advantages, actively attract foreign investment, promote the high-quality development of the regional economy and synergistic advancement, and contribute to the steady growth of the national economy and the improvement of the international competitiveness. This will contribute to the stable growth of the national economy and the improvement of international competitiveness.

New Architecture of Foreign Direct Investment Regulation in the European Union

This article examines current trends in financial governance within the European Union (EU), focusing on the regulation of foreign direct investment (FDI). The adoption of supranational mechanisms for EU FDI screening through Regulation 2019/452 not only highlights the expansion of multi-level governance, as promoted by the European Commission, but also reconfigures the EU's role as a global actor in investment transactions. This shift directly impacts a wide range of stakeholders.The study aims to explore the institutional architecture established by Regulation 2019/452 and address the research question: Why has the EU transitioned from a neoliberal approach favoring free capital movement (positive integration) to a framework emphasizing common European monitoring rules (negative integration)? The theoretical framework combines the concept of multi-level governance and securitization theory, underpinned by new institutionalism, which facilitates an analysis of how institutions, particularly the European Commission, articulate and advance common interests within political frameworks. The findings reveal that the securitization of Chinese FDI served as a critical tool for the Commission to legitimize its push for supranational regulation. Regulation 2019/452 is identified as “entry-level legislation,” designed to be amended through its built-in revision mechanism, ultimately broadening the Commission’s exclusive competencies in this area. This trajectory was partially confirmed by the Commission’s January 2024 proposal to strengthen the Regulation. The analysis situates this shift within a broader global context, demonstrating how the EU's move from neoliberalism to protectionism mirrors trends in other major economies, such as the United States, China, and India, all of which employ FDI monitoring mechanisms. The article also identifies key events that acted as catalysts for the EU’s geopolitical reassessment of foreign investment—from a stance of openness to recognizing potential threats to collective security and public order. It draws a parallel with the Commission’s use of securitization discourse in the energy sector, which contributed to the partial communitarization of energy policy through multi-level governance.

SUPPORT FOR ATTRACTING INVESTMENTSTO THE DEVELOPMENT OF THE TOURISM SECTOR

The article examines the institutional support for attracting investments to the development of the tourism sector in Ukraine, which serves as a key factor for creating a favorable investment climate and stimulating industry growth. The aim of the research is to analyze, systematize, and summarize the existing institutional foundations for attracting investments, as well as to develop recommendations for overcoming institutional problems in the tourism sector's development. The study presents a system of legal, organizational, economic, and social instruments that create conditions for activating investment activities in the tourism sector. The importance of state support, improving legislation, and developing effective financial mechanisms for attracting investors is substantiated. The research findings indicate that Ukraine has significant potential in the tourism sector due to its natural, cultural, and historical resources. It is revealed that the lack of systematic legislation, inadequate training of personnel, weaknesses in financial mechanisms, and the mismatch of the tax system with industry needs hinder the development of the tourism sector. The study also identified the urgent need for a unified legislative act regulating activities in the tourism sector. Special attention is paid to the role of government organizations that provide informational support and cooperation between the state and business, as well as their participation in developing tourism development strategies. The article presents examples of international cooperation and Ukraine's participation in international organizations' programs that promote foreign investment attraction. The necessity of creating effective financial instruments, including state subsidies and grants, to support new tourism projects is justified. The research emphasizes the importance of implementing tax incentives for enterprises in the tourism sector and developing informational platforms for convenient access to investment opportunities. It is argued that institutional support for attracting investments to the development of the tourism sector in Ukraine is a comprehensive process that requires the systematization of legislation, support for innovative enterprises, modernization of personnel training, and the development of financial mechanisms that will contribute to the sustainable development of tourism infrastructure and the attraction of new investments.

IMPACT OF OECD MEMBERSHIP ON ROMANIA'S FINANCIAL SERVICES AND CORPORATE GOVERNANCE

significant influence would be the one on the financial services and corporate governance of the companies. Romania will see an increased market efficiency, more foreign investment, and greater customer protection in the key sectors including non-banking financial sectors. Therefore, with OECD membership, a more predictable economic environment would eventually render Romania an attractive destination for investment. Reciprocally, it will help in economic growth, reduced market volatility, and trust in the corporate sector. In short, higher standards of corporate governance and financial services will have Romania stand in a better position in the global chain and integrate into global markets in a much better way, thereby increasing its economic resilience. Romania already confirmed several times the attachment to the set of values and principles of the OECD. Romania also promotes its profile as a candidate involved in the debates at the OECD level but also active in the projects developed and implemented by the OECD through the added value it can bring to the Organization at the regional level.

Resolving Disputes in International investment through Arbitration

This paper brings forth an extensive analysis of the role of arbitration in resolving disputes in international investment, providing a comparative study of the existing frameworks and emerging alternatives. As cross-border investments continue to grow, disputes between foreign investors and host states have become increasingly common. International arbitration has emerged as the preferred method for resolving such conflicts due to its neutrality, enforceability, and flexibility. The paper explores the key legal instruments governing international investment arbitration, including Bilateral Investment Treaties (BITs), Free Trade Agreements (FTAs), and multilateral agreements like the Energy Charter Treaty. It also examines the two most widely used procedural frameworks: the International Centre for Settlement of Investment Disputes (ICSID) and the United Nations Commission on International Trade Law (UNCITRAL), comparing their distinct approaches to arbitration. While arbitration has proven effective, it faces growing criticisms, including high costs, lengthy proceedings, and concerns about transparency and arbitrator impartiality. The research also highlights regional initiatives, particularly in Latin America and China, which reflect diverse approaches to investment dispute resolution. By comparing these frameworks and emerging trends, the paper sheds light on the strengths, weaknesses, and future direction of international investment arbitration, emphasizing the need for a more transparent, equitable, and accessible system to balance the interests of investors and host states. The analysis concludes by assessing the potential impact of these reforms on the future of international investment law.

The role of emotional marketing in enhancing strategic customer behavior through financial knowledge: An analytical study of a sample of shopping malls in Iraq

The research aims to diagnose the logical relationships between emotional marketing and its role in enhancing strategic customer behavior through financial knowledge to reach results in the dynamic environment of shopping malls. The paper was designed in light of adopting the descriptive analytical approach to variables and collecting data and information through the questionnaire tool distributed to the shopping malls of the research sample. Using statistical analysis programs to reach the results, the study sample reached (25) shopping malls in the local environment of the country. The results showed that there is a threat in the local environment in which these malls operate through the entry of foreign investment projects in this field, which led to an increase in supply and competition in terms of quality, prices and delivery services to gain customers. The studied malls had to develop a strategy on how to attract and retain customers by using emotional marketing practices and relying on financial knowledge to influence strategic customer behavior, as the current and future customer has become rapidly changing in tastes, needs, desires and transformation through technological development and the world has become a small village that can be viewed at any time and in short periods of time. The research also concluded that the threat of new investment through the establishment of new malls as new investment projects affects supply and demand in the environment in which these studied malls operate. The research also concluded that there is a correlation and influence relationship between the research variables of the studied malls, which includes a package of results that benefit the research community. The paper aims to bridge the knowledge gap between the variables of the paper in the dynamic environment by using emotional marketing as a competitive tool in influencing strategic customer behavior through financial knowledge to gain and maintain the current customer and gain the potential customer.

Impact of using derivatives on stock market liquidity

This study demonstrates that using derivatives can significantly improve stock liquidity. We conduct several tests to check for robustness of our findings and control for potential endogeneity in our results. We observe that the decrease in stock illiquidity due to derivative usage is more pronounced for firms with high information asymmetry, high firm-specific risk, and negative investor sentiment. Ownership stakes held by foreign institutional investors and domestic promoters do not influence how derivative usage affects stock liquidity. This relationship is significant in the presence of large and independent boards. Our results emphasize the liquidity creation role of derivative usage, which complements other functions of derivatives markets, such as price discovery and risk management. Our findings are relevant for companies operating in foreign capital markets and for international investors who include Indian stocks into their portfolios.

An Analysis of the Economic and Policy Impacts of the Belt and Road Initiative on Participating Countries: A Case Study of Pakistan, Djibouti, and Sri Lanka

Abstract: The project, which the Chinese Government calls BRI, was launched in 2013 to promote global connectivity alongside economic development through long-term infrastructure projects in Asia, Europe and Africa. This paper assesses how the growth of BRI has impacted several beneficiary countries through case studies in Pakistan, Djibouti and Sri Lanka. In Pakistan, CPEC stimulated economic growth by promoting infrastructure development. The port development in Djibouti was facilitated by BIS funds, transforming the city into a major trading hub. In Sri Lanka, the Hambantota port project illustrates the problems of increasing debt and political constraints. This comparison of BRI projects in different countries reveals a range of achievements, but also challenges common to the public sector, such as debt management, economic dependency and the strategic implications of foreign investment. recommendations for optimizing BRI performance include strategic planning and diverse partnerships include. This study highlights the complex dynamics of large-scale international development initiatives between states and their relevance for participating countries.

Foreign Portfolio Investment and Capital Market Development in Nigeria

This study investigates the impact of foreign portfolio investment (FPI) on the development of the Nigerian capital market from 1986 to 2023, addressing challenges such as exchange rate volatility and inadequate technological advancement. The research aims to explore the following questions: What is the relationship between foreign portfolio investments and capital market development in Nigeria? How do exchange rate volatility influence the capital market development in Nigeria? What role do technological advancements play in enhancing market performance and attracting foreign investors? Data were sourced from the Central Bank of Nigeria Statistical Bulletin and the National Bureau of Statistics. A quantitative methodology was employed, utilizing the Johansen co-integration test, Vector Error Correction Model (VECM), and Granger causality test to analyze secondary time-series data. The Johansen co-integration test revealed a long-run relationship among the variables, while the VECM indicated that FPI negatively impacts market capitalization. Additionally, the Granger causality test demonstrated unidirectional causality from capital market development to FPI. To address the identified challenges, the study recommends that policymakers create a more supportive environment that ensures foreign investors can repatriate capital and earnings. The government should prioritize exchange rate stability that reflects market realities to enhance investor confidence. Investments in advanced technology are crucial to improving efficiency and accountability in market transactions. By adopting these targeted recommendations, Nigeria can better leverage FPI to foster capital market growth and promote sustainable economic development. JEL Codes: G15, O16

Research on the Reform and Transformation of Singapore's Political Election System and Political System

Singapore is an important country in Southeast Asia, which has been established for less than 60 years. In the early days of its establishment, its survival situation was very difficult. But under the struggle of the People's Action Party (PAP) led by Lee Kuan Yew and the "founding generation" of the people, Singapore has harmoniously coexisted with different ethnic and religious groups and has forcefully embarked on a rapid development path. According to data released by the World Bank, as of 2022, Singapore's per capita GDP has reached over 82000 US dollars and has been steadily increasing for many years. The People's Action Party has won every election since its founding and has been in power ever since. However, as the public increasingly enjoys the oversight and balance of the government by the opposition in parliament, the party's support rate for the election has gradually declined, and its vote share in the most recent election has dropped to 60%. The rapid development of Singapore since its founding cannot be separated from the continuity policies implemented by the fixed ruling party, which attract a large amount of foreign capital investment. However, the people's call for democracy forces the ruling party to face strong opposition in the upcoming general election. For the ruling party, more support from voters for the opposition party has entered an irreversible path. This article will explore the path of political system reform in Singapore.