High Levels Of Foreign Investment Research Articles

SOCIAL DILEMMAS OF THE SWEDISH ECONOMIC MODEL IN THE POST-WAR PERIOD

The article analyzes the stages development of the Swedish economic model from the mid-nineteenth century to the crisis in period 20082010. Sweden is the richest Scandinavian country and one of the most industrialized countries in the world. Sweden is an economically highly developed and efficiently organized country. For the last few years, the economy has been in a phase of economic growth. In the period 20182021, the gross domestic product (GDP) grew at a rate of almost 2.0% in the conditions of low inflation (approx. 3% annually) and a relatively high unemployment rate (7.0% in 2019 and 8.8% in 2021). The economic results achieved by Sweden are not accidental. This is the result of the harmonized economic policy pursued continuously by the Swedish government, which actively affects the material course of economic growth processes in this country. The development of economic policy in Sweden can be divided into two periods: the first (1970s and 1980s) was characterized by the decline of traditionally understood industrialization. The change in the political arena in the period 1976-1982, which resulted in the removal of the Social Democrats from power, did not stop the subsequent fiscalism and the increase in public and social spending. The rate of economic growth in the long-term horizon was declining. Between 1961 and 1970, the average annual growth of Swedish GDP was 8.9%, 5.6% in the 1970s and 6.9% in the 1980s, respectively.The process of internationalization of Swedish enterprises, liberal approaches to economic cooperation with foreign countries and the recovery of public finances, whose dynamic development took place in the 1990s, are the second characteristic period in Swedens economic policy. For more than two decades, Swedish governments have maintained strong fiscal discipline. After theeconomic reset in the early 1990s, the general downward trend in the share of public spending in Swedish GDP seems to have come to a halt. In the last 3 years (20192021), public spending did not exceed 50% of GDP. Moreover, Sweden has maintained a low level of public debt for years. The ratio of public debt to GDP decreased from 78% (1994) to 35.2% (2019), 39.6% in 2020 and in 2021 36.7%. One of the important factors enabling the rapid economic growth of Sweden was high expenditure on research and development (R&D). For several years, Sweden has been at the forefront of countries investing the most in the development of new technologies. An important factor in Swedens economic growth has also been the high level of foreign investment. According to UN statistics, Sweden is one of the most attractive places to invest foreign capital. The impulse of the Swedish economy over many years was the development of exports, which in 2021 reached the level of approx. PLN 176 billion. Euro, which puts Sweden at the forefront of the world. The share of exports in creating the Swedish GDP in 2021 was as much as 45.5%.The EU membership also had a positive impact on Swedens economic development.Swedens social and economic success has also been achieved on the basis of the lessons learned from the financial crisis of the early 1990s. The unchanging strategy and economic policy, together with competitiveness, innovation and a flexible approach to trade, have made Sweden today a highly competitive country with an economy that achieves measurable successes.

The Influence of Environmental, Social, and Governance Performance on Foreign Investment

Research aims: This study aims to investigate the effect of environmental, social, and governance (ESG) performance on foreign investment through corporate reputation.Design/Methodology/Approach: This study’s population was all non-financial companies listed on Indonesia Stock Exchange from 2015 to 2019. Moreover, the hypotheses testing technique used was Two-Stage Least Square (2SLS), with 150 observations distributed in balanced panel data. In addition, additional analysis was conducted to examine how each company paid attention to ESG practices based on its industry classification through descriptive statistical analysis.Research findings: The regression results revealed that companies with good ESG performance tended to have a high level of foreign investment. However, it could not be explained by the corporate reputation. In an additional test, this study documented that the mining industry had a much better ESG performance than other industrial groups.Theoretical contribution/Originality: This study pays attention to foreign investment through trading domestic equity shares, whereas previous studies only focused on ESG practices in the FDI process. In addition, this study examined corporate reputation in explaining the relationship.Practitioner/Policy implication: The research results can be used by standard setters in developing sustainability disclosure standards in Indonesia, which International Sustainability Standards Board is currently initiating.Research limitation/Implication: The weakness in this study is the small number of samples employed in the test due to the minimal availability of ESG data in the database.

Produktivita práce a odměňování v duální ekonomice: role zahraničních investic v České republice

Foreign investment has been an important source of capital formation in transition countries but has caused the division of economies into foreign- and domestic-owned sectors. This paper explores the persistence of dual economy in the Czech Republic as well as the relationship between labour productivity and components used in the income approach to GDP calculation. Analysing the dataset of 20,900 firms operating in the Czech Republic in 2015, the paper presents evidence that higher levels of foreign investment are associated with significant labour productivity and wage differentials. Lower unit labour costs in foreign enterprises are consistent with higher level of investment of foreign-owned firms. Our model shows that differences in the degree of capital intensity are the driving force for the level of unit labour costs (i.e. factors are substitutes concerning the factor payments).

Improving Arbitration Climate in Japan: Report and Recommendations

Japan is the third largest economy in the world, strongly oriented on high levels of foreign investment and with large enterprises engaged in international commercial transactions. Yet despite a strong rule of law and a favourable legislative framework based on the UNCITRAL Model Law on International Commercial Arbitration it has one of the least utilised arbitration systems in Asia.This report and recommendations resulted from a project supported by Daiwa Anglo Japanese Foundation, which brought together arbitration experts from Japan and the United Kingdom to analyse and make recommendations on how to make Japan a more attractive destination for arbitration. The project included a seminar at the Institute of Advanced Legal Studies in London in May 2016 and a conference at Nagoya University in June 2016. This report analyses key issues related to development of international arbitration in Japan and propose recommendations on the basis of analysis and discussion at these two events.

The spatiality of Irish manufacturing linkages in the ‘Celtic Tiger’ era

Manufacturing investment from abroad has been of immense importance to Ireland’s economic development in recent decades. In particular, high levels of foreign investment in manufacturing were the main contributor to the unprecedented economic growth rates from the early 1990s which led to Ireland’s economy being compared with the Asian ‘Tigers’. Clearly it is desirable from a national economic point of view that the current base of foreign manufacturing firms should remain as embedded as possible. In this respect, the low level of local linkages developed by foreign firms has been a constant concern for policymakers. A number of studies have been conducted on the nature of linkages developed within the Irish economy by foreign-owned manufacturing plants in terms of the nature of these linkages and their potential for further development. However, there has been little research on the spatial patterns of external linkages of the plants in question. Based on a survey of 91 firms in four key manufacturing sectors, this paper examines the spatial configuration of the material input linkages of Irish manufacturing industry. The findings show that major sectoral variations exist in the spatiality of the linkage structures of Irish manufacturing industry. The paper concludes with a discussion of the possible implications of these variations for the future stability and embeddedness of manufacturing firms in the Irish economy.

The Effect of EU Accession on Internal Migration in Poland

This article examines the impact European Union (EU) policies have on internal migration in Poland. It argues that the EU indirectly through its cohesion funding and internal market policies creates push and pull incentives that affect internal migration. It focuses on the impact of three EU regulated factors: foreign direct investment, international migration, and EU funding. It contends that both foreign investment to a voivodeship as a result of the EU’s internal market policy, and EU funding to a voivodeship as a result of the EU’s cohesion policies, attracts internal migrants to that voivodeship and discourages residents from leaving. The article further argues that increasing international migration from a voivodeship as a result of the EUs labor policies decreases the incentive for internal migration. A cross-sectional time-series statistical analysis finds that higher levels of foreign investment and EU funding attract migrants to a voivodeship, while higher levels of international migration, FDI inflow, and EU funding decreases the incentive for residents of that voivodeship to relocate internally.

Rush to the border? Market liberalization and urban- and rural-origin internal migration in Mexico

In this study we examine the social and economic factors driving internal migration flows in Mexico. We pay particular attention to the effect that economic liberalization has had in encouraging migration to border cities. Our analysis of the origin and destination of migrants is carried out at a finer level of geographical detail than ever before. Microdata files from the 2000 population census allow us to distinguish urban- and rural-origin migrants to the largest 115 cities and metropolitan areas in the country. Our results indicate that economic liberalization, measured by the level of foreign investment and employment in the maquiladora export industry, strongly influences migrants’ choice of destinations. However, economic liberalization fails to fully account for the attraction of the border, as do the higher emigration rates to the United States from border cities. Our analysis also reveals that migrants to the border region and to cities with high levels of foreign investment are younger, less educated and more likely to be men than migrants to other parts of Mexico. Rural migrants are significantly more likely to move to the border and to cities with high levels of foreign investment than urban migrants. The results of our study have important implication for other countries opening their economies to foreign investment and international trade.

Do environmental characteristics influence foreign direct investment growth? A cross-national study, 1990-2000

The author engages several theoretical traditions in both economics and sociology to examine the impacts of levels of environmental efficiency and environmental institutions on foreign investment location in less-developed countries. Results from static score design panel OLS models of 52 countries provide mixed results. Less-developed countries with higher levels of carbon dioxide emissions per unit of gross domestic product attract higher levels of foreign investment, whereas less-developed countries with environmental ministries attract lower levels of foreign investment. Other independent variables - including sulfur dioxide emissions per unit of GDP, environmental treaty ratification, and environmental INGO presence/rate - show no statistically significant relationship with foreign investment location. The results underscore the continuing importance of the pollution havens hypothesis as well as the need for further research.

Meddling with Justice

The judiciary in post-Orange Ukraine is in deep crisis.1 By 2010, as Ukraine marked the fifth anniversary of the Orange Revolution, both domestic and foreign observers were decrying dependence and corruption in the country.2 The winner of the Orange Revolution, then-President Viktor Yushchenko, repeatedly blamed the system for serving as a brake to the country's democratic development.3 After losing her bid for the presidency to the opposition leader Viktor Yanukovych in February 2010, then-Prime Minister Yulia Tymoshenko accused the High Administrative Court of dishonesty and pro-Yanukovych bias for their failure to expose fraud. She went on to accuse the Constitutional Court of corruption and shamelessness for declaring pro- Yanukovych parliamentary coalition constitutional.4 President Viktor Yanukovych, newly elected, also vowed to get rid of pliant and corrupt judges.Judges have used every occasion to complain in public that the system is in crisis due to unprecedented pressure from public officials.5 Freedom House reported that the judicial framework and independence was stronger in the Ukraine of 1999 than it was in 2009. The World Bank also revealed that the Ukraine of 1996 had a better Rule of Law score than the Ukraine of 2008. Newspapers and TV shows have been full of stories about the growing prices of judgeships and decisions. And Ukrainians themselves increasingly distrust the judiciary-only 4 percent of them approve of the performance of courts.How and why does the Ukrainian judiciary suffer from greater pressure and dependence, deeper corruption, and public disdain while at the same time featuring highly contested, free and fair national and local elections; alternating parties in power; flourishing freedom of the mass media; heavy involvement of international donors in legal reform, and (up until the advent of the global financial crisis in the fall of 2008) high levels of foreign investment in the growing seven-percent-a-year economy? More generally, how and why do highly competitive elections and highly fragmented politics go hand-in-hand with the weakening of power?Addressing these questions is crucial for our understanding of the actual dynamics of empowerment, because the experience of Ukrainian politics runs against the predictions of the mainstream theories of empowerment. These theories argue that the following three conditions are necessary, if not sufficient, for developing accessible, independent, and powerful judiciary: 1) strong political opposition, 2) fragmentation of political and economic power, and 3) vibrant electoral markets. Post-Orange Ukraine has all of these conditions, yet they exist simultaneously with an increasingly dependent judiciary.This essay argues that increasingly competitive elections and highly fragmented politics accompany weaker courts in Ukraine because rival elites continue playing power politics in order to gain and/or remain in power. The high stakes of political competition force rival elites to use all available resources (including courts) to win elections, to hold onto power, or to undermine the political and economic bases of rivals. Politicians and economic magnates can get away with this clearly criminally punishable behavior due to the entrenchment of impunity, which subservient courts only strengthen. Fearing no sanctions for obstructing justice, the powerful feel that they can intervene in any trial. As a result, highly competitive elections and fragmented politics, coupled with well-entrenched impunity, are associated with increasing dependence.To show how and why the rulers and the opposition have faced strong incentives to capture the courts (which in turn were expected to provide important benefits to their patrons) and acted upon these incentives to meddle with decision-making, this essay proceeds to examine the key indicator of disempowerment-the improper interference with decision-making. …

The spatiality of Irish manufacturing linkages in the ‘Celtic Tiger’ era

Manufacturing investment from abroad has been of immense importance to Ireland’s economic development in recent decades. In particular, high levels of foreign investment in manufacturing were the main contributor to the unprecedented economic growth rates from the early 1990s which led to Ireland’s economy being compared with the Asian ‘Tigers’. Clearly it is desirable from a national economic point of view that the current base of foreign manufacturing firms should remain as embedded as possible. In this respect, the low level of local linkages developed by foreign firms has been a constant concern for policymakers. A number of studies have been conducted on the nature of linkages developed within the Irish economy by foreign-owned manufacturing plants in terms of the nature of these linkages and their potential for further development. However, there has been little research on the spatial patterns of external linkages of the plants in question. Based on a survey of 91 firms in four key manufacturing sectors, this paper examines the spatial configuration of the material input linkages of Irish manufacturing industry. The findings show that major sectoral variations exist in the spatiality of the linkage structures of Irish manufacturing industry. The paper concludes with a discussion of the possible implications of these variations for the future stability and embeddedness of manufacturing firms in the Irish economy.

Does accounting choice influence US investment in non‐US companies? Evidence from US institutional investment in Australian companies

AbstractPrevious research asserts that companies that choose accounting methods more familiar to investors reduce information asymmetry and increase credibility of their financial statements to those investors, thereby attracting higher levels of foreign investment. This study examines the variation in accounting policies associated with institutional investment in Australian equity. The results suggest that large US institutional holdings in Australian companies are associated with American Depositary Receipt listing and, incrementally, choice of accounting methods that conform to US Generally Accepted Accounting Principles (GAAP). Although making accounting choices in compliance with US GAAP is significantly associated with higher levels of institutional ownership in a statistical sense, examination of the specific differences in accounting choices suggests that the differences in informational content are relatively minor.

Identity and multiculturalism in the Romanian Banat

It is common for people to maintain an attachment to their native settlement or county but there are also wider regional identities which may not be fully reflected in official administrative hierarchies. The province of Banat was established by the Habsburg authorities on the southeastern edge of the Pannonian Plain as an experiment in mercantilist colonisation following the Turkish withdrawal. Although it was incorporated into the Hungarian state under the dualist system negotiated in 1867 it retained its multicultural character ; as it was the case after the partition which followed the First World War. Through its main urban centre – Timişoara – the Romanian section of Banat played a leading role in the anti-communist revolution of 1989 and attracted a high level of foreign investment during the subsequent transition period. The paper outlines the conceptual basis of regional identity, documents the multicultural heritage of the Romanian component of the Banat region and examines the results of a questionnaire survey –involving all ethnic groups- enquiring into identity preferences. A strong multiculturalism emerged (in the context of both internal and external contributions) and seems set to remain a powerful force in the future of regionalism in Romania.

Home Bias, Foreign Mutual Fund Holdings, and the Voluntary Adoption of International Accounting Standards

ABSTRACTWe test the assertion that a consequence of voluntarily adopting International Accounting Standards (IAS) is the enhanced ability to attract foreign capital. Using a unique database that reports firm‐level holdings of over 25,000 mutual funds from around the world, our multivariate tests find that average foreign mutual fund ownership is significantly higher among IAS adopters. We also find that IAS adopters in poorer information environments and with lower visibility have higher levels of foreign investment, consistent with firms using IAS adoption to provide more information and/or information in a more familiar form to foreign investors. Taken together, our findings are consistent with voluntary IAS adoption reducing home bias among foreign investors and thereby improving capital allocation efficiency.

“There are More Vets than Doctors in Chiloé”: Social and Community Impact of the Globalization of Aquaculture in Chile

This paper explores the complexities associated with globalization within the context of salmon farming in southern Chile, specifically whether the high levels of foreign investment and exponential growth in the industry have had a positive or negative impact on the people and communities of the archipelago of Chiloé. It is our argument that the responses to this issue require a subtle understanding of both the dynamics of community and the dialectics of modernity. We find substantial evidence that surplus labor, low wage levels, and poorly enforced or nonexistent health and safety standards are conditioning factors in the success of salmon farming in southern Chile. We conclude that a “sustainable community” approach is preferable to a “social sustainable” approach as the former focuses attention on the entire range of issues important to communities and the options open to them in confronting wider structures that affect their lives.

Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States

This paper explores the relationship between wages and foreign investment in Mexico, Venezuela, and the United States. Despite very different economic conditions and levels of development, we find one fact that is robust across all three countries: higher levels of foreign investment are associated with higher wages. However, in Mexico and Venezuela, foreign investment is associated with higher wages only for foreign-owned firms — there is no evidence of wage spillovers leading to higher wages for domestic firms. The lack of spillovers in Mexico and Venezuela is consistent with significant wage differentials between foreign and domestic enterprises. In the United States, where the evidence suggests some wage spillovers from foreign to domestic enterprises, wage differentials are smaller.

U.S. Hegemony Under Siege: Class, Politics, and Development in Latin America.

From Menem's new Thatcherite experiment in Argentina, through Fujimori's unexpected victory in Peru, to Collor's near defeat at the hands of the rapidly growing Workers' Party of Brazil, Latin American politics is once again in turmoil. Whilst military dictators have been dumped from office, their liberal and populist replacements have found television exposure and playboy reputations insufficient to hold together societies still remorselessly squeezed insufficient to hold together societies still remorselessly squeezed by United States foreign policy. But US influence in the subcontinent is not only under siege from the impoverished masses of increasingly unstable states; it is also threatened by intensifying superpower competition as Japan and a unifying Europe mount their challenges for world dominance. In this wide-ranging and original polemic, Petras and Morley examine the social structures which emerged from neo-liberal economic policy during the 1970s and 1980s. they show how Latin American society is increasingly organized around a continental bourgeoisie maintaining high levels of foreign investment, a national bourgeoisie operating on the margins of legality and committed to both economic deregulation and public-sector activity, and a growing class of low-paid and poorly employed workers subject to the demands of export-oriented capital into international financial circuits is matched by technical and intellectual integration, with a collapse into conformity of formerly critical groupings. For students and the interested general reader, this balanced and rigorous analysis of state power and social form provides a substantial new framework in which to consider the exigent questions of US-Latin American relations.

Investment Dependence and Political Conflict in Third World Countries

This research investigates the effect of international forces upon domestic political conflict by examining the relationship between foreign investment and political protest in underdeveloped states. Three conceptions of the association between foreign investment and conflict are considered. The first two focus on foreign investment as creating conflict by exacerbating deprivation. The basic difference between these views centers around whether the effects are felt most in poorer or in richer societies. In general, scholars who maintain that deprivation occurs see it as resulting from the impact of a large foreign presence on the strength of the host government and on its increased use of repression. The third, or liberal, conception sees foreign investment as reducing conflict by enhancing resource availability. The findings from the cross-national analysis of a sample of underdeveloped countries indicate that a high level of foreign investment is associated with less conflict in poorer societies and with more conflict in wealthier countries. The increased conflict in wealthier states, however, is not a product of the effect of foreign investment on governmental strength and repression, as deprivation theorists argue.

The Benefits of Foreign Investment in Canada, 1950 to 1956

During the 1950's and 1960's the high level of foreign investment in Canada has provoked a continuing public debate, but for the most part the controversy has raged unrestrained by any quantitative information on the potential benefit of foreign capital. The lack of data is understandable, for in attempting an estimate one encounters a multitude of conceptual and empirical problems that militate against any sort of precision.Although it is impossible to be exact, I believe that the importance of the problem warrants making some rough guesses, and that is the task of this paper. My tools will be crude and there will be many compromises with reality, but by choosing my assumptions so that they impart an upward bias to my estimates, I can at least attempt to establish an upper bound to the true benefit of foreign investment. Even if the numerical estimates are not too reliable, making them forces us to separate the many issues related to the problem and to speculate on their relative importance.It must be noted initially that the models of this paper consider only the benefits conferred by the inflow of real resources financed by foreign capitalists, and they do not take account of the technical knowledge and skilled personnel often accompanying direct foreign investment. My first model assumes that some new knowledge is implemented by foreign investment, but no more than would be implemented by the same amount of domestic investment. I consider neither the possibility that the technical change associated with foreign investment proceeds at a faster pace than that associated with domestic investment, nor the possibility that techniques introduced by foreigners have external effects. I take this narrow approach not only because it would be virtually impossible to isolate the impact of technical change introduced by foreigners but also because I do not think that foreign investment is necessary to the international transmission of technical information.