International Investment Flows Research Articles

Chinese monetary policy spillovers on its international portfolio investment flows

This paper examines Chinese monetary policy spillovers on its international portfolio investment flows with a factor-augmented vector autoregression (FAVAR) model. The paper extracts a FPI factor from certain time series to measure monthly foreign portfolio investment flows (FPI). Four Chinese monetary policies are considered: central-bank target policy rate; required reserve ratio; M2; banks' loans. The robust and significant results show that interest rates and banks' loans have significant impact on Chinese international portfolio investment flows, while changes in reserve requirements are not effective. It reveals the increasingly important effects of Chinese monetary policies on its cross-border portfolio investment flows following decades' capital account openness and the reform of interest rate liberalization in China, which indicates that Chinese monetary policy is approaching to a market-based framework.

A Study on How International Portfolio Investment Flows Affect Macrofinancial Risks and Control Channels

In the current complex global economic background, international capital flows are becoming more frequent. Based on this, this paper takes international portfolio investment as the research object and empirically tests the causal relationship and control channel between international portfolio flows and macrofinancial risk in emerging economies. It selects the panel data of emerging economies from 2001 to 2020, constructs macrofinancial risk indicators by using contingent claim analysis and the entropy-based TOPSIS method, tests the effect of international portfolio flows on macrofinancial risk by using the panel distributed lag regression model, and explores the management effect of foreign exchange reserves and capital controls on the risk effect by using the panel threshold regression model. The results show that long-term international portfolio flows help reduce macrofinancial risk, but short-term capital flows appear to increase macrofinancial risk. In addition, both foreign exchange reserves and capital controls effectively reduce the risk effect of portfolio flows. However, when considering different types of portfolios, we find that foreign exchange reserves do not effectively control the risk effect of equity securities flows, while stricter capital controls do. This paper argues that emerging economies should be more open to international long-term portfolio flows, focus on the monitoring of short-term portfolio capital flows and equity securities flows, and coordinate the use of foreign exchange reserves and capital control instruments to manage the risk effects of portfolio flows. This paper verifies the risk effect of international portfolio investment flows through empirical analysis, tests the effectiveness of foreign exchange reserves and capital controls, and provides a decision-making reference for emerging economies to timely identify, effectively manage, and prevent the risk effect of international capital flows.

The economic and institutional dynamics of China’s growing financial influence: a “structural power” perspective

What are the economic and institutional dynamics behind China’s growing aspirations to expand its financial influence? Drawing on Susan Strange’s notion of “structural power”, this article examines China’s quest for superiority within the financial realm since the early 2000s. Our findings suggest that China’s financial rise is mainly driven by its efforts at increasing its “international monetary power” and developing its ability to control international credit and investment flows within a new normative and institutional framework. The main contribution of this article lies in conceptualizing China’s growing financial influence based on a comprehensive set of indicators to develop Strange’s theory.

Impact of digitalisation and foreign direct investment on economic growth: Learning from developed countries

In recent years, progress in digitalisation and foreign direct investment has caused many structural changes, reorganisation in economics, rising productivity, globalisation, and increasing trade or international investment flows, which have led to increased capital flows and information availability. Therefore, this research investigated the impact of digitalisation and foreign direct investment on economic growth in developed countries. Panel data analysis was applied to data of 16 developed countries, from 2006 until 2019. The findings show that digitalisation - presented by mobile cellular and internet users - and foreign direct investment positively impacted economic growth, thus they strongly contribute to advancing the economy and increasing welfare. Therefore, developed countries have been learning about the critical role of technology and capital, as stated by economists over several decades, and developing countries can copy their policies into their own economic strategies.

Global Trade Flows and the Role of Bank Financing: Policy Path for Mitigating Associated Environmental Impacts in Import-Oriented Economies

International trade and investment flows provide a mechanism for geographical separation between production and consumption processes. In this study, countries that rely heavily on international trade to supply home demand and have reported positive net CO2 emissions from trade (TrdCO2) over the period 1991–2018 were identified. Accounting for possible distributional heterogeneity, this study examined whether the structural composition of bank credit allocation explains TrdCO2 in these countries. With the growing competition for bank credit resources, the impact of a credit allocation system that prioritizes credit demands of government and state-owned enterprises (GSEs) is modeled and compared to another scenario where the credit allocation decisions of banks rather prioritize financing needs of the private sector. The results showed that the structure of bank credit allocation significantly shapes the exposure of these countries to embodied CO2 emissions in the global trade flows. Specifically, restructuring bank credit allocation towards private sector-focused reduces TrdCO2 while a credit allocation system that allocates more credit to GSEs increases TrdCO2. By implication, bank financing of private sector activities encourages cleaner consumption and can help in mitigating trade-related environmental concerns in developing import-oriented economies.

The place of South Asia in the world economy: human-geographical, geo-economic and geopolitical aspects

The article deals with the positioning of South Asia in the world economy in the XXI century as its place in the flows of goods and services, finances, humans and technologies. The information base of the research is newest available statistical data of the UN institutions and the World Bank. Intraregional diversity as disparities between countries is shown. The entrenchment in the world economy is proved by GDP growth, dynamics of foreign trade and foreign direct investments. The main human-geographical features of the region are substantiated: asymmetricity with India as extremum, contrasts, and rather low transnationalization. Demographical and social, economic contrasts and geopolitical tensions of South Asia, that has deep historical and cultural roots, are distinguished. The structure of South Asia's foreign trade is characterized by groups of goods and technological classification. The typical feature for the developing countries regions is the predominance in exports of low technologies and resources-based manufactures. The unique for South Asia is the high share of primary products in imports, that reflects food and raw material dependence. Based on the technological classification The last one applied for regarding the differentiation by countries in its ties with geographical factors. Geo-economic aspects are determined by the position among other macro-regions of the world, the degree of ties with geo-economic leaders, geographical features of international trade and investment flows. Economic integration is considered in the context of the functioning of the South Asian Association for Regional Cooperation, which includes all countries of the region. The potential growth of the role of interstate economic association for intensification of intra-regional ties is noted, which will also strengthen the position of South Asia in the world economy as a consequence. Conflicts between countries, political and ideological differences often do not contribute to the consolidation of efforts of the countries in the region. Staying in the sphere of influence of different global geopolitical players, as well as the interpretation of India as one of such actors, in particular its opposition to China, bring difficulties in strengthening the place of the region and, in particular, India, in the world economy.

Gravity, counterparties, and foreign investment

We propose a new explanation for the persistence of gravity in international investment flows based on new facts about large cross-border commercial real estate transactions. Buyers in these transactions preferentially match with counterparties from own or proximate countries; such affinity-based matching helps alleviate financial investment frictions. We set up and structurally estimate a model of capital allocation in a decentralized market with an investment friction, which delivers the price, volume, and counterparty matching patterns in the data. The model shows that if clusters of high-affinity counterparties lie along historical routes, as in the data, preferential matching can perpetuate gravity relationships.

Prospects for the Reorientation of Investment Flows for Sustainable Development under the Influence of the COVID-19 Pandemic

The article is devoted to substantiating the expediency of reorienting international investment flows, under the influence of the COVID-19 pandemic, from traditional directions to projects related to social transformation. It is proved that such transformations should be expressed first of all in qualitative changes in education, medicine and employment. Particular attention is paid to the modernization of the paradigm of sustainable development, the components of which should be ranked from social to environmental. The necessity of interpretation of investment strategies implemented in the countries following their common problems is substantiated. Also, attention is paid to the substantiation of the cyclical component, its role in the redistribution of investment flows at the state level. The article proposed cluster investment to solve this problem.

Theoretical views on formation of international investment law

Goal: research of various theoretical views and approaches to the formation of international investment law.Methods of research: analysis and study of research papers and literature containing views and discussion on the formation ofinternational investment law.Results: It is the formation and development of special methods of international legal and national legal regulation of foreigninvestments that led to the formation of independent international investment law as a branch of international economic law. Theabsence of generally applicable sources of international law in the field of legal regulation of foreign investment negatively impactsdevelopment of the studied relations. Due to their special position in the system of international economic cooperation, internationalinvestment relations are an independent subject of legal regulation. The expansion and deepening of international investment relations,the existence of ever-growing international investment flows play a leading role in the globalization of the world economy which is themost important factor in the modern social development of individual countries and the world community as a whole. Methods of legalregulation of foreign investment have their own specifics.Discussion: offering a comprehensive and detailed study and research of the matter in various research institutions.

Prospects for Post COVID-19 Era Optimisation of the Forest Products Industry in Nigeria

COVID-19 pandemic has taught nations a number of lessons.. The lockdown by nations to slow the spread of the disease created a demand and supply shocks that led to drop in international trade and investment flows of 30% to 40% respectively. Nigeria is not immune from this development. The country also depends on importation of secondary raw materials for its industries. As a result of acute deforestation, the economic wood species in Nigeria have reduced significantly forcing the forest industries to rely on importation of raw materials such as Plywood, Medium and High Density Fibreboards, 0 OSR boards and a host of others as most of the particleboard and plymills have closed operation as a result of unavailability of prime wood species. The near absolute dependence on these raw materials led to disruption in the operation of the forest industries as a result of the lockdown in international trade occasioned by the CODID-19 pandemic. Production of most items in the sector has reduced significantly. For instance the sawmills operated at 28% of its installed capacity while the plymills and particleboard mills operated at below12% and capacity utilisation respectively.This development necessitates the need for adequate plans to be made for the post COVID-19 era optimisation of the forest industries in Nigeria. This can only be achieved through initiation of policy that will enthrone Public-Private-Sector-Partnership in sustainable production of industrial raw materials, most especially, roundwood in the country. The total availability of roundwood of 30cm in diameter and above is less than 300,000,000m 3 . Thus, Nigeria may run out of industrial roundwood in the next 5 years. As a result, Nigeria must enthrone adequate policies to ensure sustenance of its ndustries most especially, those that have to do with industrial roundwood and wood based panels production. Also adequate policy is required to promote programmes such as wood reuse, environmental planting, development and industrial utilisation of bamboo, formation of forest industry clusters and wood products certification. Keywords: Roundwood, clusters, plywood, certification, wood reclamation. DOI: 10.7176/JESD/11-16-16 Publication date: August 31 st 2020

Libre circulación de inversiones en la Unión Europea en tiempos de COVID-19

International investment flows have grown steadily since 1990, among a global acceptance of their benefits. However, this situation is changing sharply. Globalization and foreign investment are under siege, and a more cautious approach to both of them is ascertainable in many places. Among other consequences, this leads to the enactment of more restrictive regulations towards them. The European Union is an economically integrated space, extremely open to foreign investment. Since 2009, the Common Commercial Policy embodies foreign direct investment. Nevertheless, the consolidation of this new policy coexists with the development of screening mechanisms of foreign investment on national security grounds. Some European countries have developed them, and the European Union, itself, also enacted a Regulation on this topic in March 2019. The Covid-19 pandemic, with its devastating economic and social effects, introduces an additional element of tension in this topic in the eu. The need to preserve strategic sectors of the European economy collides with the principle of free movement of foreign investment that has characterized the Union since its inception, raising doubts and premonitions about the future to come on this area… A future, that, perhaps, is already here.

FOREIGN INVESTMENT PRIORITIES ON RENEWABLE ENERGY PROJECTS

The interrelationship in regards to solving worldwide problem on reducing natural energy reserves and developing environmentally friendly ways to obtain them, basing on non-traditional and renewable energy sources (RES), is described in the article. The dynamics and structure of investment infusion into renewable energy projects in the world through the period of 2009 to 2019 are analyzed. The regional and sectoral analysis on the financial resources directness that stimulated the development and generation of “green” energy is carried out. It has been found that China, the USA, Japan and a number of European countries account for the largest amount of investments into the renewable energy over the period under study. It is substantiated that the decrease in the growth rate of energy consumption within economically developed countries is related to a number of factors, including the relocation of the center of global industrial production to the Asian continent, investments priorities in energy-saving technologies rather than the production of energy itself, the increase of ecological criteria, environmental and consumption standards. The reorientation of international investment flows from developed countries to developing countries has been identified, which is stipulated by the access to resources and cheaper generation of energy currents in the sector of renewable energy. On the basis of the conducted sectoral analysis, the segments of alternative energy have been identified, which show the highest dynamics of development, in particular, solar and wind power. The importance of institutional support for attracting foreign investment into this specified field is emphasized, in particular, through the development and implementation of national alternative energy incentive programs. The effectiveness of both investment and financial instruments of the stimulation and predominance of much more active use of subsidies for the development of hydrogen alternatives of energy resources in economically developed countries compared to developing countries and countries with transition economies is noted on. The importance of international coordination of alternative energy development efforts and the important role of global regulators in achieving these goals have been identified. Among the most active international institutions, which has stopped financing projects on oil and other kinds of mined fuel, the World Bank is recognized, as well as the International Finance Corporation with its initiative to set up a Green Cornerstone bond fund for emerging markets.

Climate Change Impact on Foreign Direct Investment Inflows: A Dynamic Assessment at the Global, Regional and Economic Level

Climate and environment-related international private finance flows have considerably risen since the early 1990s. The evidence on both sectoral sensitivities and increased climate-relevant investments suggests a potential link between international investment flows and climate variables, which to date remains largely unexplored. This paper examines how climate change, defined by temperature and precipitation changes, influences aggregate Foreign Direct Investment (FDI) inflows across regions and economies. We employ ARDL-based mean-group type estimators on a panel data from 1995 to 2014 covering 80 countries. We find that FDI flows are sensitive to changes in temperature and precipitation. Temperature has a long-run negative impact on world aggregate FDI flows, while precipitation shows a positive impact. Findings suggest mostly long-run and heterogeneous impacts of temperature and precipitation changes across regions. Findings further show that in the long-run temperature changes decrease FDI flows in developing countries, but increase FDI flows in developed economies. This analysis could provide a new perspective to the on-going efforts of financing climate impact mitigation and adaptation. They could also offer information about rethinking global FDI policies in the context of climate change.

РЕГУЛЮВАННЯ ПІІ В КОНТЕКСТІ НАЦІОНАЛЬНОЇ БЕЗПЕКИ: МІЖНАРОДНИЙ ДОСВІД ТА ВИСНОВКИ ДЛЯ УКРАЇНИ

The article examines the current trends of international foreign direct investment (FDI) flows, in particular, the factors influencing their "functioning" in the world have been determined. The results of the analysis have made it possible to conclude that the FDI flows` downward trends are related to a number of exogenous factors. The main interests of foreign investors and their "conflict" with the economic interests of the recipient country have been identified. Due to the increased role of TNCs (major FDI exporters) and their impact on the host economy, the FDI specifics from the protecting national economic interests (NEIs) point of view in the countries of the world have been identified. World economic practice proves that investor activity is not limited to positive influence and can slow down economic growth or encroach on economic sovereignty. It is proved that ensuring national security in conditions of openness to FDI can occur under two scenarios: (1) the system must be built in the context of FDI positive result maximization and negative effects minimization/prevention; (2) the introduction of a "defensive position" concerning FDI is negative for the host economy, as such investments bring new knowledge, technologies, methods of business process organization and contribute to the qualitative change of industrial and human capital. Based on the analysis of investment policy current trends in the world and the need to realize NEI, steps of FDI flow regulation in Ukraine have been proposed. For Ukraine, attracting FDI remains one of the main priorities of NEI's and the objective of the investment policy. At the same time, a system of preventive measures regarding FDI destructive effects while simultaneously observing NEI has been proposed.

CHALLENGES OF HRM IN A GLOBAL BUSINESS ENVIRONMENT: A REVIEW AND RESEARCH AGENDA

This paper explores the various challenges of HRM and its practice in a global busi-ness environment. The roles and responsibilities of HR departments are transforming as the modern business faces pressures of globalization, hyper-competition in the markets, declining margins and changing consumer demands, workforce diversity, technological advances and changes in the political and legal environment. Today, global HR management has become a front-and-center issue for a wide variety of firms. Many larger corporations, and even smaller ones doing business in key interna-tional markets, now have full-time HR managers devoted solely to assisting with the globalization process. For the HR managers to thrive and be relevant in the global context, new roles and agenda for the profession should not focus on traditional HR activities such as recruitment and selection, training and development, and compensa-tion, but on its outcomes. There is presently an increasing interaction of national eco-nomic systems all over the world through the growth in international trade, invest-ment, and capital flows. This interaction is a worldwide drive toward globalization and a globalized economic system. Globalization, an inevitable and irreversible force is a new reality in which HR practitioners, enterprises and government are always on the lookout for new processes and innovations. This globalization process, therefore, necessitates an investigation into human resource management. The paper utilizes the methods of descriptive analysis and synthesis of the scientific literature and empirical investigation. The paper sums up with requisite conclusion and recommendations that will help HR professionals contribute positively to employees’ well-being and meeting organizational targets in a global business environment

Global Value Chain: An Analysis of Pakistan’s Textile Sector

Global value chains (GVCs) dominate international production, world trade and investment flows today. This study examines the international fragmentation of production set by GVCs in the textile sector of Pakistan. The study quantifies the data at two- and four-digit level of harmonized code and compares it with top 15 textile exporters around the globe. The estimates through revealed comparative advantage indicate that Pakistan has a competitive edge in cotton and textile made-ups. This indicates that Pakistan needs to bring structural changes by diversifying its product range, reforming tariff procedures, improving working conditions, developing skills and developing cluster in order to promote its exports in GVCs.

МІСЦЕ ЕКОНОМІЧНОЇ ДИПЛОМАТІЇ В СИСТЕМІ ЕКОНОМІЧНОЇ БЕЗПЕКИ ДЕРЖАВИ

In the context of global transformations, in view of the growth of international economic cooperation, the increase in its participants and the intensification of competition, the need for a universal mechanism for operational coordination and settlement of various, sometimes diametrically opposed, economic interests of states appeared. The functions of such a mechanism in modern international practice are carried out by economic diplomacy, whose tools are successfully used to overcome the barriers to international trade, resolve disputes and weapons market, adhere to the terms of contracts, and provide all sides of international economic relations with as symmetrical information as possible. The article substantiates the fact of systematic influence of instruments of economic diplomacy on the intensity of international trade and investment flows and, accordingly, on a number of components of economic security of the state. In particular, as a result of the correlation, regression and dispersion analysis of pre-assembled and systematized primary empirical data carried out with the use of a multiplicative model, a direct positive correlation was established between the operation of instruments of economic diplomacy and the main indicators of foreign economic activity of Ukraine (export, import, FDI). The revealed link is statistically significant. This fact may indicate the direct influence of the political-diplomatic component on the external economic and investment-innovation components of Ukraine's economic security, as well as the indirect influence on other components, which should substantially adjust the overall integral index of the level of economic security of Ukraine. That is, the first step in the scientific understanding of the nature and degree of influence of instruments of economic diplomacy on the level of economic security of the state. This scientific problem requires further research, but today, based on the results obtained by the authors, it is possible to justify the necessity of making a political and diplomatic component to the Methodology of calculating the level of economic security of Ukraine.

Preparedness and Economic Integration in Africa – A Case with Reference to APRM

Abstract The ideas of governance and African integration and the inter-linkages between them are consistently defining policy-making in Africa. This paper analyses the Lagos Plan of Action and makes an assessment of various sub-regional integration pursuits within Africa, which is integral to the African Peer Review Mechanism (APRM). The paper also analyses the business environment and economic governance in African sub-regions by assessing their participation in international trade and investment flows, besides discussing the trade-related institutional frameworks in Africa. Moreover, the paper analyses few indigenous best practices in the areas of infrastructural development, trade facilitation, competition regime, and, agricultural development, among others and also reflects on the pertinent concerns. It calls for a broad-based multi-stakeholder participation to help enhance Africa’s preparedness and global outreach.

Anonymous Capital Flows and U.S. Housing Markets

Prior to 2016, all-cash purchases of residential real estate were a key loophole in US anti-money-laundering (AML) regulations. Beginning in January 2016, the Department of the Treasury announced orders requiring the owners of LLCs purchasing high-end residential real estate to identify themselves to authorities. We use a new detailed transactional dataset to identify all-cash purchases by corporate entities before and after the introduction of this new AML policy, and thus estimate the size and impact of anonymity-seeking capital on U.S. housing markets. We first find that all-cash purchases by corporate entities form approximately 10% of the dollar volume of housing purchases in our sample prior to the change in policy. After anonymity is no longer freely available to domestic and foreign investors, all-cash purchases by corporations fall by approximately 70%, indicating the share of anonymity-seeking investors using LLCs as “shell corporations.” Testing for potential distortionary market impacts, we find subsequent declines in luxury house prices in counties targeted by the policy relative to untargeted counties. Our findings are relevant to the (mis)measurement of international net investment flows, and to understanding a demand for anonymity that may impact certain asset classes (art, cryptocurrencies) regardless of their risk/reward characteristics.

International Energy Investments: Tracking the Legal Concept

International investment flows are rising firmly and rapidly on a daily basis throughout the world. In international investment flow energy plays a valuable role. The common point of international investment law regime and international energy law regime is, they remain many issues still to define and clarify in international investment law and energy law. In these undeveloped legal areas, the clarification of these basic issues has an essential role, as legal systems are established on the basis of clear terminology. While the significance of energy and energy-related issues in international investment law is mentioned above, there are still many blurred lines as to when “energy investments” in particular become relevant. In these situations, the limits of what may be considered an “energy investment” must be clarified. In order to explicitly explain references to “energy investments”, this article will firstly discuss the definition of international investments; secondly, the definition of energy will be analysed and then what is described as “an energy investment” will be thoroughly scrutinised. During these discussions, examples from other sectors’ investment disputes and other legal areas will also be examined and compared to provide more explicit answers as to the limits of the term.