Foreign Investment Inflows Research Articles

The Effect of Double Taxation Treaties on Tax Relief and Foreign Firms’ Investment Flows (FDI): Evidence from Pakistan

To increase inward foreign investment, policy makers increasingly resort to the ratification of double taxation treaties (DTTs). However, the effectiveness of DTTs in inducing higher FDI is still open to debate, as the empirical evidence of existing studies is anything but conclusive. This study analyzed the benefits of DTT to firms in terms of profits from dividend and capital gains, and whether or not these benefits lead to increase in foreign investment inflows. In contrast to earlier approaches, we used a firm specific dataset of bilateral FDI stocks. We also calculated the tax relief obtained by each firm due to DTT. And investigate whether these relief were significant factor in attracting FDI by those firms. We collected the consolidated tax data for a sample of 50 entities residing in Non-resident countries for the period of 2013 to 2017. 28 of them have Active income and 22 were Non-Active. Descriptive statistics, Correlation and regression test were used for the analysis of the data. Our results indicate that tax relief from dividend and capital gains due to DTTs is a significant factors in attracting FDI stocks. Moreover, increase in dividend and capital gain tax also seems to positively affect FDI. Furthermore, the relationship remained unchanged for active income and Non-Active income categories. Hence, in context of Pakistan, DTT seems to have a positive effect on FDI.

Incentives for Promoting Innovation in Engineering

Engineering is a major industry in Latvian economy. It ranks third (to wood processing and food industry) in the amount of turnover. Due to the inflow of foreign investment, well-educated labor as well as export potential, engineering and metalworking have a promising outlook. However, this industry lacks competitiveness due to cutting investment and development expenses in this sector, as well as low added value. That said, the government should step up its policies to promote innovation activity of machinery manufacturers.

Impact of Inflation, CO2 Emissions and Foreign Investment on Economic Growth: A Case of Pakistan

In this article, an endeavor has been made to break down the connection and the impact of foreign investment together with CO2 emission, labor, capital and inflation on economic growth of Pakistan by utilizing time series data from 1971-2015. Since it's alluring to test the effect of foreign investment inflow utilizing the ongoing actualities and figure, the examination utilizes GDP as needy variable while FDI, CO2, and inflation are utilized as free variables. The examination adopts ARDL to Co-integration techniques for the experimental investigation. The exact estimations demonstrate that foreign investment has positive and huge relationship with economic growth which infers that foreign investment and capital support economic growth both in short and long run. The CO2 discharges have negative and critical connection with economic growth in long run however hold insignificant in short runs. Increment in inflation impedes the economic growth in long run on account of the negative connection among GDP and inflation. These experimental bits of knowledge give policy-makers essential strategy recommendations.

International investment activity of Ukraine. Problems and perspectives of its formation

The main approaches to the international investment activity of Ukraine, problems and prospects of investment activity are descriptive, therefore the development of international investments in the world economy was analized; defined possibilities of using international investments in connection with ensuring economic growth; the volume of direct foreign investments into the Ukrainian economy from the countries of the world were investigated; defined problems of development of the international investment activity of Ukraine and ways of its solution. The subject of the research is theoretical, methodological and analytical basis of Ukraine's investment activity, prospects for its development. The goal is to invent key obstacles to the development of Ukraine's international investment activity. The purpose of study is to research the international investment activity of Ukraine, the place and role of the country in the world investment market. Common scientific methods are used, such as system analysis, to determine the peculiarities of the development of foreign direct investment in Ukraine, factor analysis, to formalize the causal relationships between the investigated factors of problems. The following results were obtained: based on the analysis of the dynamics of foreign direct investment in Ukraine and the assessment of the obstacles to investing, identified problem aspects and identified components of Ukraine's international investment activity, factors affecting the level of direct foreign investment inflow to Ukraine. Conclusions: the problems and prospects of the development of international investment activity of Ukraine can be effectively used in foreign economic activity as recommendations for determining the strategy of improving the foreign economic situation of the country and competitiveness on the world market.

Interpretation and Application of Investment Measures in Practice of International Investment Arbitration

INTRODUCTION. Developing States are interested in both the inflow of foreign investment and its efficient use in their national economies. In the furtherance of this objective, host States set in their national legislation trade-related investment measures, referred to as “performance requirements” (requirements to achieve certain national economically useful results). The interests of foreign investors and host States in the matter of measures falling within the concept of “performance requirements” mostly diverge, since these measures create for foreign investors competitive restrictions related to the use of their investments. In legal science and practice there are known trade-related investment measures, such as export requirements, foreign exchange restrictions, local content requirements and others. The possibility for foreign investors to invest without performing trade-related investment measures was one of the main problems of transnational investment. The TRIMs agreement and Art. 1106 of NAFTA are devoted to the sole subject of regulation – “performance requirements”. The idea of limiting these measures was simultaneously discussed in the NAFTA negotiations and within the Uruguay round: the elaborated provisions are similar in some aspects, but have their specific characteristics. The article deals with the rules of both agreements in light of dispute settlement practice. The conclusions of the arbitrators are analyzed in chronological order, which helps to trace the evolution of the single concept in two distinct systems of WTO and NAFTA rules. The article demonstrates the common points and differences in the interpretation of the concerned provisions norms, with consideration for the context and objectives of the agreements. MATERIALS AND METHODS. The materials used in the article include the works of Russian and foreign scholars in the field of international economic law and WTO law, international legal documents adopted within the WTO and NAFTA, as well as materials of judicial and arbitration practice of investment disputes. The research was done on the basis of general and specific scientific methods of cognition (dialectical method, analysis and synthesis, deduction and induction, comparative legal and historical-legal methods). RESEARCH RESULTS. The analysis revealed that trade-related investment measures are part of the “performance requirements” listed in Art. 1106 of NAFTA, which developed countries managed to defend in negotiations with developing countries during the drafting of the TRIMs agreement. Despite the integrity of the concept of “investment requirements”, there is an evident difference in the scope of covered measures, as well as the conceptual difference between the notions of “trims” and “performance requirements”, due to the specifics of the WTO and NAFTA. Nevertheless, in both cases, common qualification criteria of prohibited measures have been developed independently from each other in the practice of investment disputes settlement in order to address similar issues of interpretation. DISCUSSION AND CONCLUSIONS. On the ground of the analysis of arbitration practice in the TRIMs and Art. 1106 of NAFTA, the article gives reasons for the conclusion of the parallel development of the concepts of “trade-related investment measures” and “performance requirements”.

Price Determinants and GIS Analysis of the Housing Market in Vietnam: The Cases of Ho Chi Minh City and Hanoi

Since the introduction of the Doi Moi economic reform in 1986, the real estate market in Vietnam has witnessed a sharp increase in foreign investment inflows and a remarkable growth in the housing market, particularly for high-rise apartments in large cities. This study investigates the determinants of apartment prices in Ho Chi Minh City (HCMC) and Hanoi, the two most representative cities in Vietnam. The spatial distribution of apartments and their price determinants were addressed by the spatial analysis of Geographic Information System (GIS) and the hedonic model. The price determinants of both cities were closely associated with downtown-related factors; moreover, the externalities of urbanization affected each city. While HCMC was more related to the locational attributes of urban amenities and community density as well as programs because of unmanaged urbanization, Hanoi was more related to housing attributes, since the majority of apartment projects were developed under urban infrastructure development supported by the central government. Apartment cluster maps of each city clearly show the contrast of housing distribution. Our findings clarify the impact of government policies on housing price determinants and can be a reference for private- and public-sector stakeholders seeking to undertake economically and socially sustainable housing development projects in Vietnam.

India – Africa: Trade and Investments in the XXI Century

In article commercial relations and investment streams between India and the countries of Africa in the conditions of globalization of the XXI century are considered. Scales and filling of their economic interaction are significantly differ, determined by the level of development of national economy and features of external demand for the made production. High need of the countries of Africa for inflow of foreign investments, especially taking into account strong lag of most of them in development of own research and development remains. In intercontinental communications o f Africa the high activity is characteristic of India which government in 2002 has adopted the program “In focus Africa”, aimed at continuous development of economic contacts with the countries of the continent. The considerable share in their GDP of the shadow sector remains essential negative feature of economic structures of the countries of Africa and India. It not only complicates adequate assessment of the economic processes happening in these countries, but also has an adverse effect on efficiency of the state institutes. It was designated, though uneven on scales, formation of the middle class and, as a result, new types of consumption, demand and their proliferation. Respectively, their domestic markets increase and differentiated that increases interest in access to them for foreign exporters and investors. Special importance is represented by economic policy of India in the relations with the countries of Africa, including with use of “soft power” for further expansion of the positions. The main forms of economic relations of India and the countries of Africa, the growing activity of large business structures, the top-level annual economic summits are considered. In export of the African countries to India the high share of raw materials, first of all agricultural and also hydrocarbons steadily remains. The share of the African oil in the general import of India in 2016 has made 15%. Along with traditional presence in the African and South Asian markets of the leading countries of the West, economic influence of China as exporter and investor amplifies. Influence of the Japanese and South Korean capitals grows in competition for the African markets. In February, 2018 the countries of Africa have agreed about creation of the common market. Such prospect will significantly aggravate the competition for economic positions in trade and investments with the countries of African continent.

Analysis of the Investment Activity Regulation in Priority Sectors of the Economy: A Case Study of China

The attractiveness of the PRC as a recipient of foreign capital is determined by a high level of socio-economic and political stability, a capacious domestic market, cheap labor and an active national investment policy. Thus, from the very outset of the of openness to the outside world (1979), a preferential investment regime for foreign investors was established in China maintained until now. Despite the sharp shrinking of cross-border investment at the turn of the 21st century and the economic stagnation in the majority of developed countries, China is actively attracting foreign direct investment heading the list of leading recipients of foreign capital. The PRC's accession to the WTO (2001) had a great impact on the FDI growth. The principles of the open unified foreign trade policy in compliance with the GATT requirements largely contributed to attracting foreign investors to China. After the WTO accession, the volume of foreign investment in China rose 2.5 times of which the overwhelming majority belonged to FDI and China actually refused from such forms of foreign investment as foreign loans, credits, international leasing, etc. Since 2005 until lately, the foreign investment inflows into the PRC came mainly from Hong Kong, Singapore and such offshore zones as the Virgin Islands and the Cayman Islands. In fact, after accession to the WTO, adjustments were made only in respect of certain previously adopted laws encouraging the attraction of foreign investment to the country. Global trends in capital movements are getting increasingly apparent in China, a growth of interest in foreign portfolio investment is observed involving the acquisition by foreign investors of securities issued by Chinese companies.

INVESTMENTS IN THE DEVELOPMENT OF INNOVATIVE MANAGEMENT IN THE COMPANY

The subject of research. This article determines that in conditions of global transformational processes, the sphere of innovation activity becomes of particular importance in the economy of advanced countries. Its development provides socio-economic growth of local companies and a state, in general, requiring significant financial resources. Consequently, the subject of this study is the management of innovation activities at the enterprise with the achievement of maximum effectiveness, as well as the identification of interconnection between innovations and investments. Methodology. Conducted research shows, the condition of development of domestic technologies is unsatisfactory: Ukraine occupies the last place among European countries. Innovative activity is associated with investments, whose government support in our country is rather small in the context of the state’s GDP. Content analysis is carried out on materials of works of domestic and foreign scientists using information from Ukrainian legislation and statistical data provided by experts. In the process of preparing the paper, the following general scientific methods of research are used: logical analysis, observation, formalization, synthesis, abstraction. The purpose of a study is to analyse the nature of the innovation activity of companies, to establish its unbiased relationship with investment processes in order to identify areas for improving the innovation and investment situation in Ukraine. Important is to substantiate the expediency of improving the innovative management of Ukrainian enterprises in the focus of implementation of new projects by finding the necessary sources of financing. As a result – effective management of the company is capable of satisfying consumer demands and increase profits. Conclusions. Thus, the analysis of the relationship between innovations and investments has shown that the situation in Ukraine is characterized by a deficit of state support in the investment and innovation sector, and difficulties in attracting finance. The latter is directly related to the political situation, instability, the lack of clear legislative rules of direct action, as well as insignificant pay for the work of inventors. At the same time, the positive direction of innovation development in Ukraine is the tendency to increase venture companies (with the use of foreign experience), which directly provides investment in the latest local finds. Improving the investment and innovation situation in Ukraine is possible by creating a set of incentives for attracting investment, further investing in human capital, raising wages for researchers; growth of inflow of foreign investments; providing tangible state support to enterprises and more favourable lending conditions for them, etc. It is important to ensure transparency of legislation, to perfect the conditions of functioning of business space and the state of market infrastructure, to take measures to improve the state of the environment.

Problems and prospects of TNC in Ukraine

The paper analyzes the concept of «multinational corporation» and its determination. It has been concluded that the most successful and appropriate determination is given conference on trade and development. A primary objective, signs and main reasons of active development of multinational corporations is adopted. It has been proven that multinational corporations have all-embracing influence to the national economies due to data over of Fоrtunе magazine. The spheres of activity of multinational corporations in the world have been analyzed. The list of the most world multinational corporations and sphere of their specialization has been given. It is marked that еру activity of multinational corporations focus to the spheres of production and services. It is educed that for Ukraine the most attractive industries for multinational corporations are professional and scientific and technical activity, financial, insurance and trade spheresand processing industry. The geographical specific of activity of multinational corporations on the territory of Ukraine has been analyzed and it has been educed that the most investment inflow of direct foreign investments to Ukraine`s economy goes from Europe. It has been determined that the multinational corporations’ activity has the positive and negative moments at the territories of Ukraine. It has been concluded that Ukrainian government have to concentrate at the politics which would be sent to the use of all positive possibilities from multinational corporations’ activities and also neutralization of negative consequences of their activity.

Foreign Investment Inflows to Former Socialist Countries in the Balkans: Mapping Global Capitalism

Former socialist countries in the Balkans have attracted substantial foreign investments in their economies in the past two decades. Focusing on top-ranking investments in the region from China, India, Russia, Germany, Italy, and the Netherlands, this study examines the rationales driving these foreign capital inflows into Balkan economies, the domestic industries and assets they support and acquire in the region, and their social and political effects. Mapping these investment patterns, the essay argues, reveals the emergent dynamics of contemporary capitalism in the region and globally, especially how “central” and “peripheral” postsocialist and postcolonial economies transitioning to capitalism invest and thereby shape each other, the emerging geopolitical order of power, and the nature of global capitalism. In the Balkans these dynamics are marked by the following intersecting events: Indian, Chinese, Russian, and Balkan states transitions to capitalism after colonialism and state socialism; India, China, and Russia’s plans for power and influence in the Balkans, Europe, and globally; and desires for financial, material, cultural, and political expansion, especially among non-Anglophone European former “minor empires,” such as Germany, the Netherlands, and Italy. Foreign investment inflows into Balkan countries illuminate these important trends shaping contemporary global capitalism.

КОМПЛЕКСНИЙ АНАЛІЗ ІНВЕСТИЦІЙНОЇ ПРИВАБЛИВОСТІ ПІДПРИЄМСТВ В КОНТЕКСТІ ФІНАНСОВОГО ЗАБЕЗПЕЧЕННЯ РОЗВИТКУ ПІДПРИЄМСТВ

В статті розкрито передумови та предметне поле комплексного аналізу інвестиційної привабливості підприємств, орієнтованого на формування інформації, яка задовольняє інтереси різних зацікавлених груп. Запропоновано методичний підхід до комплексного аналізу інвестиційної привабливості підприємств, який базується на інтегральній оцінці, що поєднує індикатори оцінки інвестиційної привабливості за трьома рівнями: країни, регіони, підприємства. Наведено результати апробації запропонованого підходу до комплексного аналізу інвестиційної привабливості на прикладі підприємств Луганського регіону та виявлено фактори, які необхідно враховувати при прийнятті рішень щодо інвестування та формування параметрів стратегії фінансового регулювання розвитку підприємств. Уточнена система показників інвестиційної привабливості регіону та обґрунтовано доцільність методів рейтингового аналізу з використанням індексів інвестиційної привабливості країн. На основі аналізу надходження прямого іноземного інвестування визначено рейтинг Луганської області та зроблені висновки щодо інвестиційної привабливості регіону.

The influence of socio-economic instability on investment attractiveness of Ukrainian economy

The problem of influence of social and economic instability on investment attractiveness of Ukrainian economy is considered in the article. The formation of a holistic view of investment attractiveness and factors that determine it is an important component of solution to this problem. The issue of improvement of investment attractiveness of Ukrainian economy in the conditions of socio-economic instability is analyzed, which is one of the main problems of economic developments of Ukraine. The main factors creating investment attractiveness of Ukrainian economy are identified in the article. The dynamics and areas of foreign capital inflows are disclosed. The state of investment attractiveness of Ukraine according to international rating estimations and the main problems of attracting capital to the domestic economy are determined. The influence of social factors on the level of foreign investment inflows is estimated by the method of statistical analysis. The ways to increase the investment attractiveness of Ukrainian economy in the conditions of social and economic instability are suggested

Azerbaijani Engineers in the Global Economy: Transnational Professionals Versus “Button-Pushers”

This article examines the changes in the engineering profession in Azerbaijan after the inflow of foreign investment into Azerbaijan’s oil industry since 1990s. The integration of Azerbaijan’s oil industry into global economy has led to a significant reshaping of the engineering profession, both within and outside of the oil industry. Multinational companies, which have been the main agents of this integration, have introduced advanced technologies and helped many Azerbaijani engineers to gain access to the international labor market, often serving as credentializing institutions. At the same time, the presence of these multinational companies have also opened the way for new inequalities. They have indirectly created an important division within the engineering profession—a division between internationally mobile engineers from the oil industry and engineers in other industries. Outside of the oil industry, engineering work has in many cases been reduced to routine tasks of assembly and operations, while research, design, and manufacturing were made redundant in the context of the oil-driven development promoted by Azerbaijan’s government.

Corruption’s Impact on Liquidity, Investment Flows, and Cost of Capital

Corruption decreases liquidity available to institutional traders and discourages foreign portfolio investment inflows into a country. Corruption also increases corporations’ cost of equity capital. The effects of corruption on foreign investment and the cost of equity capital are nonlinear and reverse J-shaped, with intermediate levels of corruption yielding the most negative effects. Highly transparent nations, where a “level playing field” exists between foreign and local investors due to lack of information asymmetries related to corruption, attract the most investment flows. However, at the margin, very corrupt countries attract more flows than moderately corrupt countries because a “perverse level playing field” in the former countries may put foreigners and locals on an even footing in terms of resolving asymmetric information problems.

THE IMPACT OF DIRECT FOREIGN INVESTMENT ON THE DEVELOPMENT OF ECONOMY IN CHINA

The article analyzed the structure of inflow and outflow of direct foreign investment in China during the last decade. The author shows specific features and trends of investment cooperation with key economic partners and Chinese jurisdictions (Hong Kong, Taiwan). The sectoral principle of distributing the flow of direct foreign investment was discussed, which is used for raising and export of foreign capital in industries and service sector to safeguard interests of national security of China economy. The article pointed out to the impact of M & A deals as an alternative to investment projects from the ‘green field’ on Chinese economy growth. It identifies problems connected with disproportion in the development of industrial sector and service sector of the western and central parts of the country and seaside regions. The author demonstrates the key factors and trends in the active expansion policy of Chinese capital on foreign markets at the current stage.

KEDAULATAN ENERGI NASIONAL: PENGUATAN PERAN NEGARA BERDAULAT & PEMBERDAYAAN SUMBER DAYA INSANI

There has been lacking of sovereignty of energy in Indonesia as a logical consequence of the state’s ineffectiveness to uphold the mandate promulgated by the 1945 Constitution. The country has been trapped in global capitalism resulting in the weakening position of Indonesia, and eventually weakening political economic and technological power of both state and the society. It brings with it negative impacts on empowerment of human resources that should otherwise develop expertise in coping with the current development of science and technology. The inflow of foreign investment has not made the state strong enough to pave the way for self help to assure welfare of the vast people. This paper is an account of assessing this issue of weak state of Indonesia to enable stronger position in sovereignty of energy and the assurance of human resources development in science and technology.

Determinant of Foreign Direct Investment in India’s E-commerce Sector

The e-commerce sector in India has experienced remarkable growth in recent years with many new players entering the market. Its heady growth has attracted a huge amount of private equity investments from both domestic and foreign investors. Most of the investment has been made by foreign private equity investors. The present study attempts to explore the economic factors that facilitated the unprecedented growth of foreign investment in the sector. We model the empirical analysis by treating the equity inflows of foreign players in e-commerce as amounts dependent on the variation in the number of mobile and internet subscribers at the aggregate level. The study uses the OLS regression model with the time series data for the period from 2000 to 2016. The econometric analysis reveals that both mobile subscriptions and internet subscriptions have a positive impact on the inflow of foreign investment in the Indian e-commerce sector. However, relatively, the impact is higher in the case of mobile subscribers than internet subscribers.

An investigation of the factors affecting Indian exchange rate: an analysis

Exchange rate plays a key role in the country's level of trade and has a large impact on world trade and financial flows. In case of multinational companies, a precise forecasting and less volatility of exchange rate help in improving their overall profitability. Both political and economic factors influence exchange rates (Huang et al., 2004). In India, exchange rate has been highly volatile due to many a factors such as fluctuation in FII money flows, differences in rate of return or interest rates between countries, inflation, oil prices, etc. Exchange rate has been a topic of detailed study for policy making circles. The present research study seeks to investigate and analyse the impact of determinants such as GDP at constant prices, inflation levels, interest rates, current account deficit, inflow of foreign institutional investment, foreign exchange reserves and price of crude oil and gold on the USD-INR exchange rate based on quarterly data from April 1999-January 2017. The study also seeks to determine the relationship between the independent variables and the dependent variable, i.e., exchange rate in the short run and long run based on the Johansen cointegration test, augmented Dickey-Fuller test and vector error correction model.

АНАЛІЗ РОЗВИТКУ ВИРОБНИЦТВА СІЛЬСЬКОГОСПОДАРСЬКОЇ ТЕХНІКИ ДЛЯ ЗЕРНОВОГО ГОСПОДАРСТВА В УКРАЇНІ ЗА ЧАСІВ НЕЗАЛЕЖНОСТІ

The article emphasizes the importance of the agrarian sphere for the stabilization and development of the Ukrainian economy. It is determined that agrosphere is the object of research of representatives of various scientific directions. Terminological inconsistency was found in the definition of such concepts as agrobusiness, agro-industrial complex, agrarian sphere (industry, sector), agriculture, in connection with which their differentiation was made and an attempt was made to outline their content. It is noted that with the development of market relations, the term “agrobusiness” is the most successful and acceptable for defining all processes that occur in the agro-industrial complex. The attention is drawn to the lack of a unified methodology for statistical accounting and a system of generalized indicators of inflow of investments. The principles are generalized, taking into account the international experience, according to which today the collection and analysis of statistical data in the agrarian sector are carried out in Ukraine. The existing problems of statistical accounting of foreign investments into agrarian business are highlighted. A retrospective analysis of foreign investment in the agrarian business of Ukraine was conducted. It was revealed that from 2009 to the present day, the pre-crisis indicators of inflow of foreign investments did not succeed. An estimation of modern tendencies of foreign investment in the agrarian business of Ukraine is carried out. The following perspective factors of investment revival, such as the permanent growth of demand for its products, the reduction of risks, the positive impact of reforms, the diversification of markets, and the expansion of sown areas, are highlighted. The structure of foreign investments in agrarian business is considered. It is noted that the most attractive for investors are such industries as crop production (sunflower growing, barley, corn, rape, wheat, honey, soybeans) and livestock farming, as well as auxiliary activities in agriculture and post-harvest activities. TOP-5 of the largest investor-countries of agrobusiness activity of Ukraine are allocated. The territorial features of financial revenues from foreign investors in Ukrainian agrobusiness are presented. It is generalized that in the regional dimension, the leaders in the volume of foreign investments received are the Kyiv and Ivano-Frankivsk regions, and more than a third of all foreign investment in agriculture, forestry and fisheries of Ukraine falls on the city of Kyiv, where the head offices of many agricultural producers are located. As a conclusion to the article, measures were proposed to improve and improve the structure of foreign investment in agrobusiness in Ukraine both at the state and corporate levels.