Investment Mode Research Articles

Research on portfolio optimization of agricultural intellectual property promotion engineering projects

Venture capital which supports the commercialization of agricultural S&T achievements is a new type of investment mode. High earning of agricultural intellectual property venture capital coincides with high risk. How to balance the return on investment against the risk of investment and how to decide the compositions of investment portfolios are what the investment companies most concern. From the perspective of venture capital companies, this paper, which applies expert evaluation method, mean-variance portfolio theory and quadratic programming, studies optimization of intellectual property venture portfolio, proves rationality and feasibility of the model through case analysis, and provides a theory for venture capital companies to optimize their investment portfolios.

Effects of inward investment on outward investment: The venture capital industry worldwide 1985–2007

We identify inward investment as an important impetus to outward investment, supplemental to the impetuses depicted in conventional internationalization frameworks. By incorporating both the spillover and competition effects of foreign entrants, we develop an integrated framework of the inward–outward investment relationship for different investment modes and different home-country and host-country pairs. Our analysis of venture capital (VC) investments worldwide from 1985 to 2007 shows a positive spillover effect on outward investment for inward co-investments and a negative competition effect on outward investment for inward standalone investments. We find the strongest effects when the host country is a laggard in the VC industry and the home country is a leader.

한국 섬유패션산업의 해외진출에 관한 연구

This study analyzes the status of foreign direct investment in Korean textiles and fashion firms and investigates the factors determining their performance. A total of 1,251 cases (including 1,116 manufacturers and 135 of distributors from the 2009/2010 Korean Overseas Business Directory published by KOTRA) were used. The results of this study are as follow: 1) In the case of manufacturers, China was the most heavily invested in country, and the Asian region that included China, Vietnam, Indonesia and Bangladesh consisted of 80% total investment. In cases of distributors, China was also the first ranking country and other countries, that included Vietnam, United States, and Japan are major ones. 2) In terms of the foreign entry mode, wholly-owned subsidiaries represented 90% of total cases. As the index of the degree of localization, the ratio of local employees was very high. 3) Different countries were utilized by year, type of business, and area of process. In manufacturers, Indonesia, China, and Vietnam were the most heavily utilized countries in the 1980s, 1990s, and 2000s, respectively. For distributors, China was the major market ill the 1980s and 1990s but Vietnam has emerged as the biggest market in the 2000s. In terms of area of process, China was for manufacturing fibers and fabrics, Vietnam was for most items, Indonesia was for assembly, knit, accessories, and Bangladesh was for embroidery and accessories. 4) The determining factors of the age of foreign business as the proxy index and performance of foreign business entry, were different by the type of business. For manufacturers, four factors including the dollar amount of investment, number of local employees, the mode of foreign direct investment, and entry to China were significant. On the other hand, only two factors including the dollar amount of investment and entry (other than China) were significant distributors.

A fuzzy hierarchy integral analytic expert decision process in evaluating foreign investment entry mode selection for Taiwanese bio-tech firms

The purpose of this study is to help bio-tech firms solve the foreign investment (FI) entry mode selection problem. This study combines the concepts of factor analysis, analytic hierarchy process (AHP), genetic algorithm (GA), and fuzzy integral to construct an entry mode selection approach. This study produces several interesting findings. (1) In the different investment entry modes, there are large differences in evaluation focus when investors select their entry modes. (2) For example, Taiwanese bio-tech firms entering mainland China consider merger and acquisitions to be the first priority, and followed by strategic alliances. This research shows that if the stock share holding is unlimited, Taiwanese bio-tech firms prefer to select a high stock share holding investing mode. (3) In various investment modes, the aspects of “Capital and Risk” and “Technology Ability” have the most consistent effect on entry mode selection.

Assessment of Two Modes of Financing Land Transport Infrastructure Investment in the Philippines

Assessment of Two Modes of Financing Land Transport Infrastructure Investment in the Philippines

Determinants of Different Modes of Japanese Foreign Direct Investment in the United States

There are four major modes through which firms undertake foreign direct investment (FDI): merger and acquisition (M&A), joint venture, new plant, and others. The four modes of FDI are distinct from each other, and each has its own unique advantages and disadvantages. While a large and growing empirical literature examines the determinants of FDI, very few studies examine the determinants of the different modes. The central objective of this paper is to empirically analyze the extent to which the determinants of FDI such as firm size influence the choice of one mode of FDI over another. Our analysis follows a stylized two-stage investment process. First, we look at the probability of whether a Japanese firm is willing to undertake FDI in the United States. Second, which is the innovation of this paper and its main original contribution to the FDI literature, we analyze which of the four modes of FDI will be chosen by firms that are willing to undertake FDI.

Real Options and Investment Mode: Evidence from Corporate Venture Capital and Acquisition

Existing research has used real options theory to study corporate venture capital (CVC) investment, yet little work has empirically examined such investment in a comparative setting. In this paper, we begin to address this gap by investigating firms' investment mode choice between CVC and acquisition, which are alternative modes for pursuing external business development and corporate growth. We propose that when exogenous uncertainty elevates the value of real options, firms are more likely to undertake CVC investments rather than acquisitions. Furthermore, we suggest that the value of real options under uncertainty is contingent upon several factors, which may also shape firms' choice between CVC and acquisition. The results indicate that market uncertainty is positively related to firms' choice of CVC versus acquisition. In addition, investment irreversibility strengthens the effect of uncertainty, whereas growth opportunities surrounding the investment weaken the effect. Our empirical findings and the comparative approach we adopt to studying CVC investments and acquisitions have important implications for theory and research.

Assessment of Two Modes of Financing Land Transport Investment in the Philippines

Assessment of Two Modes of Financing Land Transport Investment in the Philippines

Islamic Finance: A Bulwark against Contagion in the Global Banking System

The objective of this article is to shed some light on the performance of Islamic financial institutions in view of the current global financial crisis. Islamic financial activities and products are conducted in compliance with the shari’ah and, therefore, they are less vulnerable to changes in monetary variables than conventional financial products. Due to the prohibition of interest and because of ethical and moral constraints, Islamic banks are restricted from investment in speculative transactions which lessens default risk and enhances effectiveness of liquidity management. Islamic modes of investment contribute to society’s wellbeing through the creation of wealth and employment to ensure economic stability and human development. In Islam, knowledge, information and work are the main ingredients for success (falah). In an information-intensive world, honesty, accountability and transparency are vital for market performance and business activities. The global financial crisis has caused instability in financial markets weakening confidence in the global economic system as well as increasing uncertainty about future macroeconomic trends.

Becoming multinational: challenges for Chinese firms

PurposeThe purpose of this paper is to examine the features of Chinese multinational enterprises (MNEs), and identify the obstacles that Chinese firms must overcome if they are to become viable global competitors, as well as some of the strategies that can take them there.Design/methodology/approachBased on statistical data, the paper examines entry mode, regional and geographical distribution of Chinese outward foreign direct investment. It also discusses the obstacles, weaknesses and strengths of Chinese firms, and suggests where and how such firms can improve their capabilities.FindingsIf they are to become global competitors, Chinese firms need to develop an “MNE with Chinese characteristics” which builds on strengths such as a deep understanding of personal networks to solidify coordination and takes advantage of a tradition of appreciation of human relationships.Originality/valueThe paper presents a great deal of insight into Chinese MNEs.

The Case for a Hierarchical System Model for Linux Clusters

The computer industry today is no longer driven, as it was in the 40s, 50s and 60s, by High-performance computing requirements. Rather, HPC systems, especially Leadership class systems, sit on top of a pyramid investment mode. Figure 1 shows a representative pyramid investment model for systems hardware. At the base of the pyramid is the huge investment (order 10s of Billions of US Dollars per year) in semiconductor fabrication and process technologies. These costs, which are approximately doubling with every generation, are funded from investments multiple markets: enterprise, desktops, games, embedded and specialized devices. Over and above these base technology investments are investments for critical technology elements such as microprocessor, chipsets and memory ASIC components. Investments for these components are spread across the same markets as the base semiconductor processes investments. These second tier investments are approximately half the size of the lower level of the pyramid. The next technology investment layer up, tier 3, is more focused on scalable computing systems such as those needed for HPC and other markets. These tier 3 technology elements include networking (SAN, WAN and LAN), interconnects and large scalable SMP designs. Above these is tier 4 are relatively small investments necessary to buildmore » very large, scalable systems high-end or Leadership class systems. Primary among these are the specialized network designs of vertically integrated systems, etc.« less

Activation of the polish coastal tourist reception region using the instrument of a Public-Private Partnership

Public-Private Partnership (PPP) is a form of cooperation between the public sector and the private in order to carry out projects or services traditionally supplied by the public sector. This mode of investment is most commonly applied to the creation of technological infrastructure projects. According to the author PPP will allow coastal tourist communes (gminas) to speed up the implementation of the communication infrastructure, and the sport and recreational infrastructure which are presently major barriers to the development of the tourist economy. This is further confirmed by examples presented in this work.

The Choice of Market Entry Mode: Cross-Border M&A or Greenfield Investment

Multinationals may enter a host market by different modes of foreign direct investment (FDI). Two are widely used: Cross-Border M&A and Greenfield Investment. In practice, M&A transaction has increased dramatically in China over the last several years. This paper examines the choice of FDI modes, and makes a comparison between the two modes from the external and internal impacts. Then get the conclusion that we should choose the right mode according to the different situation about the firms in the international market. The purpose of this paper is going to analyze the two entry modes specifically and helps us better understand the two modes.This article consists of four parts. Part1 is a short introduction to China today. Part II briefly introduces the current status of M&A and Greenfield Investment. Part III compares the two entry modes from their implementations, cost, external and internal sides. At the last part, we get the conclusion and make the suggestions to our investors.

Corruption and Cross-Border Investment in Emerging Markets: Firm-Level Evidence

This paper studies the joint impact of corruption on the entry mode and volume of inward foreign direct investment (FDI) using a unique firm-level data set. We find that corruption not only reduces inward FDI, but also shifts the ownership structure towards joint ventures. The latter finding supports the view that corruption increases the value of using a local partner to cut through the bureaucratic maze. However, R&D intensive firms are found to favor sole ownership.

Subsidy competition and the mode of FDI

We model subsidy competition for a foreign MNC's investment in two trading partners. Taking into account acquisitions as an alternative investment mode weakens the case for subsidising greenfield investment. Competition between countries results in welfare losses, which are reinforced by positive externalities from the MNC's presence and regional integration. The results also apply to situations where the acquisition price accounts for the possibility of subsidies and when governments use acquisition subsidies as an alternative to greenfield subsidies.

Study on the Selection Method of PPP Mode in the Domain of Public Infrastructure

In this article, we list and compare specific investment and financing modes in the domain of public infrastructure, put forward main factors which influence the mode selection, establish the index system for the mode selection, and finally bring the method of fuzzy comprehensive evaluation into the specific mode selection under the concept of PPP (Public Private Partnerships) to strive for the quantification of the qualitative analysis.

Corruption and cross-border investment in emerging markets: Firm-level evidence

This paper studies the joint impact of corruption on the entry mode and volume of inward foreign direct investment (FDI) using a unique firm-level data set. We find that corruption not only reduces inward FDI, but also shifts the ownership structure towards joint ventures. The latter finding supports the view that corruption increases the value of using a local partner to cut through the bureaucratic maze. However, R&D intensive firms are found to favor sole ownership.

Unraveling the Puzzle of Differing Rates of FDI and FVCI in India and China

This study seeks to unravel the puzzle underlying China's and India's differing experiences in attracting two types of foreign investment: namely foreign direct investment (‘FDI') and foreign venture capital investment (‘FVCI'). Complementing the law and finance literature, we argue that foreign investors prefer the direct investment mode in China despite its poor governance environment because direct investment provides private means of control over the business, and China's institutional environment provides a more facilitating arena for FDI than India's. In contrast, India's legal infrastructure and related institutional settings prove to be better than China's in accommodating foreign portfolio (indirect) investment especially in the form of venture capital. The conclusion of this article has implications for the two countries' legal reform in the direction of the desired type of foreign investment. It also provides comparative insights into the legal institutions of China and India in fostering national innovative capacity and entrepreneurship.

Unraveling the Puzzle of Differing Rates of FDI and FVCI in India and China

AbstractThis study seeks to unravel the puzzle underlying China's and India's differing experiences in attracting two types of foreign investment: namely foreign direct investment (‘FDI’) and foreign venture capital investment (‘FVCI’). Complementing the law and finance literature, we argue that foreign investors prefer the direct investment mode in China despite its poor governance environment because direct investment provides private means of control over the business, and China's institutional environment provides a more facilitating arena for FDI than India's. In contrast, India's legal infrastructure and related institutional settings prove to be better than China's in accommodating foreign portfolio (indirect) investment especially in the form of venture capital. The conclusion of this article has implications for the two countries' legal reform in the direction of the desired type of foreign investment. It also provides comparative insights into the legal institutions of China and India in fostering national innovative capacity and entrepreneurship.

Centralised and distributed electricity systems

Because of their high level of integration, centralised energy supply systems are vulnerable to disturbances in the supply chain. In the case of electricity especially, this supply paradigm is losing some of its appeal. Apart from vulnerability, a number of further aggravating factors are reducing its attractiveness. They include the depletion of fossil fuels and their climate change impact, the insecurities affecting energy transportation infrastructure, and the desire of investors to minimise risks through the deployment of smaller-scale, modular generation and transmission systems. Small-scale decentralised systems, where energy production and consumption are usually tightly coupled, are emerging as a viable alternative. They are less dependent upon centralised energy supply, and can sometimes use more than one energy source. They are less sensitive to the uncertain availability of remote primary energy and transportation networks. In addition, the close connection between energy generation and use makes decentralised systems cleaner because they are most often based on renewable energies or on high-efficiency fossil fuel-based technologies such as combined heat and power (CHP). Fully decentralised energy supply is not currently possible or even truly desirable. The secure and clean energy systems of the future will be those flexible enough to allow for a spectrum of hybrid modes of operation and investment, combining the best attributes of both paradigms. A large part of this flexibility will come from the networks that make it possible to combine these two types of infrastructures and obtain the benefits of both approaches.