International Investment Activity Research Articles

Central Asia and German foreign policy. Main directions and prospects

The article considers the interaction between Germany and the countries of Central Asia. The region is of interest to Berlin due to a complex of factors (security and countering international terrorism, trade and investment activities, diversification of markets and energy suppliers, migration management).

State participation in investment agreements (international investment activity): issues of immunity and jurisdiction

It is indicated that international private-law relations nowadays are expanding significantly primarily in connection with the internationalization of economic life. The modern world is characterized by the economic interdependence of states, the expansion of not only traditional forms of foreign economic relations, but also relatively new forms such as leasing operations, concessions, franchising, and others. The article examines the current trends in the development of state immunity in international private law relations, in particular, in investment relations. The author defines the scope of these relations and gives their general characteristics, as well as identifies the peculiarities of the State’s participation in these relations as a subject of private international law. The author examines the content, types of international investment relations, development trends and peculiarities of legal regulation. The author pays special attention to the jurisdictional issues of investment dispute resolution involving states. The author analyzes legal acts and shows the role of judicial practice in this area. The author substantiates the need to apply functional (limited) immunity in international private law relations. Expansion of the range of international private legal relations over time due to the development of foreign economic activity, integration processes, and interdependence of States in the second half of the twentieth century contributed to the expansion of State participation in civil (private) relations, which objectively led to the establishment of the concept of functional (limited) immunity in the legislative, judicial and contractual practice of different countries. The concept of limited immunity is becoming increasingly popular in the world, which is explained by the development of economic relations between different countries and the increasing involvement of states in commercial activities, which on their own behalf enter into various foreign trade agreements, obtain loans from foreign banks, use maritime transport for commercial purposes, i.e. by their actions they seem to put themselves in the position of a merchant, trader, private person, which then allows the courts to consider them as ordinary participants in the process. The current policy vector of most continental law states on immunity issues is shifting towards the use of limited immunity of states.

Choice of Law Clause in Foreign Investment Contracts for The Development of The Nusantara Capital City

This research analyses foreign investment within the context of the Nusantara Capital City (Ibu Kota Nusantara, IKN) development projects, focusing specifically on the application of choice of law clauses in resolving disputes arising from foreign investment contracts. Employing both statutory and conceptual approaches, the study explores how the IKN's green forest city concept aligns with national investment policies, making it conducive to foreign investment provided that projects adhere to legislative requirements and procedural guidelines. The findings underscore the critical importance of carefully crafted dispute resolution clauses, particularly those specifying the choice of applicable law, given the inherent complexity of contracts involving multiple parties subject to diverse legal systems. Effective dispute resolution mechanisms are essential for ensuring clarity and consistency in addressing potential legal conflicts that may arise in the course of international investment activities within the IKN development framework.

The role of international consulting in improving the international investment activity of the IT business

In wartime, the IT industry increases the provision of IT services not only in the domestic market, but also in foreign sales markets due to the increase in the export of IT products. However, there is a problem regarding the financing of foreign projects, so the purpose of the paper is to determine modern sources of financing IT business investment activities in order to enter the international sales markets of IT products and the use of international consulting as an effective management system for the development of foreign economic activities of domestic business entities in the field of IT. Such methods of scientific research as: systematization, comparison and systematic approach for finding sources of financing of international activities in the IT industry are applied; induction and deduction for the justification of preferential taxation and crediting, as well as the use of international consulting services for conducting export operations in the field of IT technologies. The modern conditions of taxation, crediting and financing of business entities are considered, which include: preferential taxation, credit programs for importers of IT products, inclusion of the IT industry in the "5-7-9" lending program, direct investment, use of crowdinvesting operations and fundraising. It is proposed to introduce a group of "small businesses and entrepreneurs" for IT enterprises and IT entrepreneurs as residents of Diya City and to create conditions for their preferential taxation. Measures have been developed to implement a special program for crediting the export of IT products through the export credit agency with the help of long-term bonds, as well as a special fund for crediting the IT business at the expense of deductions from all types of taxes and fees of Diya City residents. For the effectiveness of the proposed investment decisions, it is suggested to use the services of international consulting for the support of foreign economic activity.

RETRACTED ARTICLE: Financial Shared Service, Digital Transformation and Corporate Value Creation

The trend of Chinese enterprises has defied the hard-hit international investment and trade activities of recent years. The scale and globalization of local enterprises continue to develop, and the enterprise management efficiency has become increasingly prominent. This paper delves into the strategic importance of FSSC in augmenting corporate value, and examines the link between digital transformation and the formation of FSSC. The introduction of FSSC and its accompanying digital technology marks a new juncture for corporate reform. Based on RBV and DCV, this paper studies the strategic significance of FSSC to enhance corporate value, and deconstructs the relationship between digital transformation and the development process of financial shared service centers. Based on the time-varying DID, 335 listed companies were selected for a quasi-natural experiment. The results showed that: (1) financial shared service centers can significantly promote the improvement of corporate value. (2) Digital transformation can promote the establishment and development of financial sharing service centers, thus promoting the improvement of corporate value. (3) The effects of FSSC and digital transformation are characterized by heterogeneity. The worth of financial shared service centers for non-state-owned and manufacturing companies is substantial. Digital transformation has a noteworthy positive moderating effect on them but has no considerable moderating effect on state-owned and non-manufacturing companies. The government ought to bolster policy direction, keep up the digital transformation of businesses, and aid them in achieving rapid financial transformation; senior executives should remain cognizant of their strategic position and strive to execute a satisfactory job of both internal and external coordination, as the research findings suggest.

Environmental Regulation of Transnational Corporations by Host Countries

Transnational corporations play a vital role in the world economic development, is the most important subject of international investment activities, and is closely related to the sustainable development of the world environment. At present, in order to attract foreign capital, many developing countries ignore the importance of environmental protection, which makes many multinational corporations in developed countries transfer high-polluting industries to the outside world, which poses great challenges to the environmental governance of host countries. More and more environmental pollution cases of transnational corporations have occurred, making the international community gradually realize the importance of environmental regulation of transnational corporations. In view of this, this paper mainly makes a comparative analysis of the environmental regulation policies of different countries in the world as host countries. By drawing on, studying and analyzing the advanced experience of developed countries and combining with the current situation and deficiencies of developing countries in the process of development, this paper makes a research and analysis, and puts forward countermeasures and suggestions to solve the difficult problems of environmental regulation of transnational corporations by host countries.

Domestic environmental impacts of OFDI: City-level evidence from China

With the increasingly severe ecological environment, seeking sustainable development between the economy and the environment has become the main social consensus. Under this background, this study explores the domestic environmental impacts of outward foreign direct investment (OFDI) activities, using the panel data of 222 Chinese cities from 2007 to 2019. The following results are obtained: (1) With every 1% increase in OFDI flows, the overall domestic environmental quality can get improved by 1.55%. (2) The home-country environmental effect differs among cities due to the economic-regional factors, being more evident in the eastern region cities, highly industrialized cities, and cities with better business facilitation. (3) Although a spatial relationship exists between cities, no obvious evidence supports the spatial spillover phenomenon. Domestic environmental quality is mainly improved by its own OFDI activities. This study has important practical significance for international investment activities and home-country environment protection with several related policy implications.

THE ROLE OF MULTINATIONAL COMPANIES AND THEIR IMPACT ON THE ECONOMIC POLICY OF KAZAKHSTAN

This article is devoted to studying the activity of the main participants of economic globalization – transnational corporations, in the context of Kazakhstan. I considered the main volumes and streams of direct foreign investments in the country in recent years. Key indicators of direct foreign investments (further DFI) in the country and the prospects of development are defined in this work. The article also studies the major factors of attraction of direct foreign investments. A review of scientific literature on the factors defining the inflow of direct foreign investments to Kazakhstan is made. The paper investigates investment shares into priority sectors of the economy of Kazakhstan and provides analytical and statistical methods of knowledge and observation, which serve as a methodological basis of research. The article has the scientific value and novelty of research where the relevance of work is the application of an integrated approach to research of the international investment activities and the role transnational corporations play in the development of different economic sectors and infrastructure in Kazakhstan.

Microscopic, mesoscopic, and macroscopic structural correlations between the international energy “investment–trade” networks based on network motifs

In recent years, international energy investment and energy trade activities have developed rapidly. Because energy has commodity and financial product attributes, there is often a correlation between international energy trade and investment. This correlation has regional specificity due to the uneven geographical distribution of energy production and consumption. The existing literature mainly studies the correlation between the international energy “investment–trade” systems from a macroscopic or microscopic perspective. However, the relationship between them among countries from a mesoscopic perspective has not been fully demonstrated. With the development of economic globalization, we need to pay attention to whether the energy trade model of countries can reflect their preference for choosing investment partners and whether the energy investment model can reflect energy trade cooperation. In this paper, by taking the frontier approach of network motifs, we analyzed the correlation between international energy trade and investment from more than 200 economies worldwide from the macroscopic perspective, microscopic perspective, and local structure from a mesoscopic perspective. Meanwhile, we compared the results of the study in 2018 with those in 2022 to obtain the impact of international events on the international energy “investment–trade” networks. We found that 1) the structures of energy trade and investment networks are similar from a macroscopic perspective, which is the basis for exploring the correlation between energy trade and investment. 2) Bilateral cooperation and transaction transmission are important local structures of energy trade and energy investment activities. 3) The formation of an equal and close local structure among economies in energy trade is more likely to be preferred for investment cooperation, and forming a representative local structure with statistical significance among economies in energy investment is more likely to obtain energy trade cooperation. This work innovatively adopts motifs to study the correlation between energy investment and trade, which can help energy investors predict the direction of investment and provide guidance to governments in formulating energy trade policies.

MODERN DETERMINANTS OF FOREIGN INVESTMENT’ ACTIVATION IN THE INTERNATIONAL FINANCE AREA

The article defines the modern determinants of foreign investments’ activation in the international financial space. Foreign investments became a decisive driver for the formation of additional competitive advantages in the global capital market, ensuring the transfer of capital, knowledge, and technologies across borders. Foreign investment flows become the basis for forming a single system of relations and a new configuration of the world economy. The dynamics of foreign direct investment (FDI) by groups of countries and regions were analyzed. Over the past two decades, global FDI flows have grown rapidly, largely due to the intensification of investment activity in developing countries due to accelerating economic growth, increasing market potential, and using effective government policy tools to stimulate foreign investment. The specifics of the distribution of foreign direct investment between host countries have been determined in view of the consequences of the COVID-19 pandemic. The pandemic didn’t affect the countries’ ranking among the leaders in attracting and exporting FDI. Due to the export of FDI from Hong Kong (China) and Thailand, Asia became the only region where growth in FDI flows was recorded during the pandemic, and China became the largest investor in the world in 2020. As a result of quarantine restrictions and measures to counter the consequences of the pandemic, the lowest fall in FDI indicators over the last decade. The fact that the number of restrictive measures against foreign capital in 2022 increased sharply, mainly due to the war in Ukraine has been determined. Such procedures included sanctions against financial institutions; trade and transportation restriction measures; travel bans and asset freezes for hundreds of individuals and legal entities. The peculiarities of the recovery of FDI indicators in the post-Covid period are highlighted, and it is determined that in the near future, new risks may arise for the stable development of international investment activities in view of the war in Ukraine and a number of new shocks in the world economy.

Application of Artificial Neural Network Method using Hyperparameter Tuning for Predicting of Euro Exchange Rupiah

The Covid-19 pandemic has significantly impacted the economic decline in many countries, such as Italy, the United States and the European Union. Indonesia, also affected by Covid-19, was not spared from economic turmoil, especially in the foreign exchange market, where the rupiah exchange rate against the Euro experienced significant fluctuations in early 2020, hampering international trade and investment activities. Therefore, an appropriate method is needed to predict changes in the rupiah exchange rate against the Euro to minimize the obstacles. This study uses the ANN model to predict the Rupiah (Rp) exchange rate against the Euro (€). The best model is obtained through the hyper-tuning process. The optimal parameter values obtained are the input layer with 10 nodes, 2 hidden layers with 19 nodes and 13 nodes, the output layer, dropout of 0.2, 32 batch sizes, 100 epochs, and the Tanh activation function in the distribution scheme of 90% training data and 10 % testing data. Based on the MAPE value of 0.0042% and 0.0041% obtained, the prediction results on the selling and buying rates of the Rupiah against the Euro, it can be concluded that the model has good predictive ability with an accuracy value of 99.996%.Keywords: Currency Exchange Rates, Data Mining, Machine Learning, Artificial Neural Networks

Influence of International Investment Arbitration Under the International Law

Not only do MNEs bring construction and opportunities to the host states, but at the same time, unrestricted MNEs often bring shock and damage to the local economy and domestic market of the host states. In order to regulate international investment, there are many international treaties, conventions and laws in the world, which are collectively referred to as International Investment Law. The IIL incorporates international investment activities between the participating countries and their MNEs into a legal and regular framework. In the work of dealing with the relationship between them, a very important thing is to reasonably settle the investment disputes between the two parties. The methods to settle the disputes include litigation and arbitration, but the arbitration has actually become the most important and popular method. International investment arbitration is bringing lots of benefits to both the MNEs and the host states. The method of comparative research is used to illustrate the characteristics and differences between litigation and the arbitration in international investment disputes settlement. The advantages of arbitration are reflected and the reason why arbitration has become the most popular way to settle these disputes is explained. In the explanation in the article, the method of cases analysis is used, and especially in the fifth part, it focuses on the arbitration case of Cairn Energy PLC and Cairn UK Holdings Limited v. India. PCA Case. It supports the conclusion that arbitration has become the most popular method of international investment disputes settlement.

INTERNATIONAL INVESTMENT ACTIVITIES BETWEEN UKRAINE AND THE EUROPEAN UNION

The article examines approaches to the study of international investment policy in Ukraine and ways of further cooperation with the European Union. The main approaches are shown in the genesis of this problem. It is emphasized that the modern conduct of international investment activity is closely related to the state programs of Ukraine, the EU and the countries of the world as a whole. Separate areas of international investment support are substantiated. At the same time, it is believed that European investment support is an important tool for sustainable development of the state and ensuring its food security. However, in modern conditions, the issue of the organization of investment support for the country’s economy requires a new approach, improvement of the considered support programs through active measures at the state level, introduction of new financial and credit structures. It is emphasized that during the organization and conduct of close cooperation between Ukraine and the EU, as well as during the development of measures to improve the organizational and economic mechanism of investment activity, it is necessary to take into account the peculiarities of the investment climate, without which it is impossible to achieve a high level of the country’s economic potential.

Interstate investment legal treatment as a factor of investment attractiveness

The theses are devoted to one of the key components of international investment agreements – investment legal treatment, since an even fluent analysis of international investment arbitrations with participation of states and subjects of economic activity with investments from abroad delivers understanding that standards and guarantees of investment legal treatments have fundamental character at least for the mentioned legal practices. Kind of argument for this could be found in a position of agreed provisions of investment treatments at bilateral investment treaties, which usually follows introduction norms for investment permitting and admitting, being set from the very beginning of such treaties. But, is this fundamental character of investment legal treatments being remained in other important rules of international investment implementation? Scientific questions about corresponding dualism are likely the key at these theses, because the concept of investment legal treatment is quite deeply studied in the framework of international law and general law theories, but leaves a number of insufficiently disclosed scientific and practical issues regarding the specifics of this concept in certain branches, including international investment law in the first place. The analysis defines main practical problems of international investment law, including the legal protection of international investment and the delimitation of actions of states that constitute expropriation or the measures taken by states under the right to regulate within public interest. Separate researching attention also paid to legal interaction between the concepts of the investment legal treatment as legal instrument of an international lawyer, and the state guarantees for the protection of foreign investment – as remedy and element of specialist in domestic law practices. Provided research significates investment legal treatment importance as a factor of local investment attractiveness, it also outlines importance of development of state guarantees for protection of foreign investments by delivering progressive European approaches as the examples, focusing on effective balance reaching within the corresponding regulation. Scientific and practical conclusions on the most important legal sources in the field of international investment activities are made, the direction for the next stage of researching work is preoutlined. Key words: international investment law, international investments, investment legal treatment, bilateral investment treaties, international investment arbitration, state guarantees for the protection of foreign investments.

Spillover effect of crude oil futures market: An empirical research from emerging market

The world crude oil market is an important place for investors to engage in international financial investment activities, which profoundly impacts the economic activities of all countries. This paper aims to provide empirical support for the decision-making behavior of cross-border enterprises, international investors, and government regulatory authorities. This paper constructs a risk spillover effect measurement model based on the GARCH-CoVaR model. Firstly, the GARCH model fits the logarithmic rate of return of RMB and crude oil price data. Secondly, Copula is used to estimate its joint distribution. Finally, the risk spillover effect is calculated by the Covar model. We selected the emerging market (Shanghai crude oil futures market) as the research object. The research found that the Shanghai crude oil futures market has a significant inverse volatility spillover to the onshore exchange rate market and a two-way positive volatility spillover to the offshore exchange rate market; Then, we conducted a robustness analysis and found that there is a significant two-way risk spillover among offshore exchange rate market and international crude oil market, and there is a downward risk spillover among international crude oil market and onshore exchange rate market.

The impact of macroprudential policies on the transmission of shocks across financially integrated countries

AbstractWe study the implications of macroprudential policies across countries on the transmission of shocks when international investment activities are allowed. In a two‐country dynamic stochastic general equilibrium (DSGE) model in which international investors are borrowing constrained and pledge international assets, we introduce a time‐varying loan‐to‐value (LTV) ratio that adjusts to the variation of three different financial vulnerability indicators. We examine the effect of these policies on negative productivity and borrowing capacity shocks. Although time‐varying LTV ratios reduce the international propagation of the productivity shock, their response to the shock depends on the financial vulnerability indicator with which the LTV ratio changes. With a productivity shock, the adjustment of the LTV ratio to the deviation of credit or asset price helps to reverse the negative impact of the shock. With a financial shock, LTV ratios varying with a deviation of credit‐to‐GDP ratio or aggregate credit can mitigate the impact of a negative financial shock. Adjustment of the LTV ratios reduces the fluctuation of international investors' balance sheets, investment, and productivity. We find that countries improve their welfare when time‐varying LTV ratios are in place. The magnitude of the welfare gain differs with both the financial vulnerability indicator and the shock.

EDUCATIONAL COMPONENT OF HUMAN POTENTIAL: FINANCIAL-STATISTICAL AND LABOR PERSPECTIVES

L. Halkiv L. Halaz M. Bihus 1Lviv Politechnic National University 2Lviv Polytechnic National University 3Ivan Franko National University of Lviv, Department of International economic and Investment Activity Purpose. The purpose of this article is to improve theoretical, methodological, and applied foundations of the study of the educational component of human potential. Design/methodology/approach. Scientific works of domestic and foreign scientists studying issues related to human potential, labor market, and education financing, as well as official statistical data that characterize these issues, formed the information, theoretical, and methodological basis of the study. To achieve this purpose, the article uses a set of scientific methods that have ensured conceptual integrity of the study, in particular: the method of theoretical generalization and the abstract method were used to systematize scientific results and formulate conclusions; the method of structural analysis was used to study education costs in terms of individual components; concentration and differentiation analysis was used to study distribution of costs of financial agents; dynamic modeling was used to build trends in the number of educational institutions, the number of students, and the total cost of education; the tabular method was used for a compact representation of quantitative indicators; the graphical method was used to visualize the results of the study, etc. Findings. The functioning of the country's education system has a decisive influence on the quality of human potential. Graduates who complete a higher education program are more likely to work in knowledgeintensive jobs and earn higher salaries. Workers with higher education are usually more likely to be formally employed and less likely to lose their jobs. Effectiveness of the education system depends on its financing. The results of the analysis of data on expenditures on education in Ukraine indicate the following patterns: most funds are allocated for educational services provided by higher education institutions, for the first stage of secondary education and primary education; private firms and corporations most often allocate their funds for post-secondary education; the share of state institutions among financial agents carrying out activities in the field of education reaches about 90 %; the maximum costs of the public sector are observed at the ISCED 0-3 educational levels; the network of institutions and the contingent of students receiving vocational, technical, and higher education are decreasing; there is a declining trend in the level of education expenditures in the Consolidated Budget expenditures. The rise in the price of educational services against the background of an unbalanced labor market leads to a loss of knowledge; additional retraining expenses; increase in social benefits. Practical implications. The materials presented in the article can be useful to representatives of institutions and scientists whose activities are related to the financing of education and the labor market. Originality/value. In the article, the author. The level of education of an employee is considered as one of the components of their potential. This component allows an employee to compete successfully in the labor market. In Ukraine, financial resources of the population cover more than 30 % of doctoral studies and their equivalents, as well as about 25 % of expenditures cover higher education. Given the spread of poverty and the weakening of state support for higher education, Ukrainians will face the problem of the provision of financial support for universities.

Statistical analysis of geographical structure foreign direct investment in Ukraine

Introduction. Foreign direct investment occupies a significant place in financial flows and creates tools through which stable and long-term ties between countries are formed. Investment flows, which are both balanced and geographically and conjunctively disproportionate, can have positive and negative consequences for the host country’s economy. Particular attention should be paid to the qualitative parameters of the foreign investment process, which include the country of origin of investments, that is, their geographical location.Purpose. The purpose of the article is a comprehensive study of the geographical structure of foreign direct investment in Ukraine throughout the time-period of our country’s existence as an independent participant in the process of foreign investment.Method (methodology). In the process of researching the selected topic, the following methods were used: monographic – in order to study the results of existing analytical research, the object of which is the process of foreign investment in Ukraine and its aspect as the geographical structure of foreign investments is investigated; method of calculating the relative values of the structure – for the research of the geographical structure of foreign direct investment in Ukraine, which made it possible to abstract from a specific numerical expression of the volume of parts of the population; tabular – for submission of analytical information about the object of research; graphic – for visual presentation of the obtained statistical data on the geographical structure of foreign direct investment in Ukraine. Results. International investment activity has a significant impact on the geographical structure of FDI in Ukraine. During the study period (1995 - the end of 2019) the main investors were European countries. They exported to Ukraine annually about 50 % of the total invested capital, and in 2006-2011s, this figure reached 70 %. Investments from the European Union play a crucial role in Ukraine’s foreign direct investment process.According to the research, over the past 25 years there have been significant transformations in the territorial geographical structure of FDI in Ukraine. First of all, the number of investor countries has increased and the role of leaders, such as the United States, Germany, and the United Kingdom, has decreased. The role of investments from offshore countries and countries equated to them, such as Cyprus, Belize, the Bahamas, the British Virgin Islands, the Netherlands and others, has significantly increased. If in early 1995 the share of investments from these countries was about 11%, then at the beginning of 1998 this figure was 20 %, at the beginning of 2008 - 33%, at the beginning of 2011 – 51 %, and at the end of 2019 - 60 % respectively. It should be noted that there is no significant investment from South America, such as Brazil, Mexico and Venezuela, the industrialized countries of East and Southeast Asia and China, which is one of the 10 leading countries in the world. In this direction, promising investment cooperation should be expanded by concluding investment agreements taking into account the interests of future investors.Perspectives. In our opinion, promising in the future are studies of sectoral and territorial structure of FDI in terms of the largest countries of investors, assessment of their impact on the economic development of Ukraine in order to make effective management decisions in attracting foreign investors.

International Investment Activity in the Context of the Foreign Relations of Ukraine with Countries of the European Union

The necessary regulation of international investment activity can be carried out using economic, administrative and legal methods, as well as tools of motivation and restraint was shown in the article. The domestic strategy in the field of foreign relations is not limited to creating favorable conditions for investment activity, but also includes an active role of the state government in shaping the system of long-term investment in the economy was researched. The benefits of public investment programs were considered. The main methods of risk assessment of international investment activity in the sphere of foreign relations of Ukraine were defined. Based on an analysis of the investment volume of projects of different directions over a five-year period, the tendency to increase investments was identified. The model for assessing the impact of EU foreign investment projects on the economy has been developed.

DETERMINATION THE PRIORITY OF FACTORS INFLUENCING OVERSEAS INVESTMENT DESTINATIONS OF BUSINESSES USING AN ANALYTIC HIERARCHY PROCESS METHOD

Because of the great benefits overseas investment brings, countries and businesses are increasingly concerned with the question of an ideal investment destination. Many studies have shown that, factors of the consumption market, the infrastructure and resources, economic and political environment have a significant impact on the decision to choose an investment location, however the priority order of these factors are different for various research spaces. By studying the specific case of Viettel Group - one of the largest telecommunications groups in Vietnam that is having many international investment activities in recent years, the study has been verified the priority order of factors influencing the decision to choose an overseas investment location of this corporation. The research outcomes show that the group of factors that have the most influence on investment decisions is the group "Consumption market", more specifically, the sub-factor "Market Size" is considered more than the others. Keywords: Investment Destinations, Foreign Investment Decision, Analytic Hierarchy Process.