Investment Promotion Agencies Research Articles

The Relationship between Resource, Leader, Process and Performance of Inward FDI:Based on Chinese Investment Promotion Agency

The Relationship between Resource, Leader, Process and Performance of Inward FDI:Based on Chinese Investment Promotion Agency

Providers’ perspectives on inbound medical tourism in Central America and the Caribbean: factors driving and inhibiting sector development and their health equity implications

BackgroundMany governments and health care providers worldwide are enthusiastic to develop medical tourism as a service export. Despite the popularity of this policy uptake, there is relatively little known about the specific local factors prospectively motivating and informing development of this sector.ObjectiveTo identify common social, economic, and health system factors shaping the development of medical tourism in three Central American and Caribbean countries and their health equity implications.DesignIn-depth, semi-structured interviews were conducted in Mexico, Guatemala, and Barbados with 150 health system stakeholders. Participants were recruited from private and public sectors working in various fields: trade and economic development, health services delivery, training and administration, and civil society. Transcribed interviews were coded using qualitative data management software, and thematic analysis was used to identify cross-cutting issues regarding the drivers and inhibitors of medical tourism development.ResultsFour common drivers of medical tourism development were identified: 1) unused capacity in existing private hospitals, 2) international portability of health insurance, vis-a-vis international hospital accreditation, 3) internationally trained physicians as both marketable assets and industry entrepreneurs, and 4) promotion of medical tourism by public export development corporations. Three common inhibitors for the development of the sector were also identified: 1) the high expense of market entry, 2) poor sector-wide planning, and 3) structural socio-economic issues such as insecurity or relatively high business costs and financial risks.ConclusionThere are shared factors shaping the development of medical tourism in Central America and the Caribbean that help explain why it is being pursued by many hospitals and governments in the region. Development of the sector is primarily being driven by public investment promotion agencies and the private health sector seeking economic benefits with limited consideration and planning for the health equity concerns medical tourism raises.

The Dimensions Of FDI In The Tourism Sector In Africa

The tourism sector in Africa has received an increasing focus as it is viewed to be a fast growing sector and a potentially substantial provider of employment. With increasing numbers of tourists from developing countries the sector is set to become a major contributor to the African growth story through higher standards of living and positive effects on the economy. Little is understood of the contribution of multinational tourism enterprises and whether their investments are affecting the much acclaimed story of increasing tourism to Africa. We aim to contribute to the discussion by investigating links between the tourism of African countries and inward FDI in tourism. Although datasets for African countries are mostly incomplete, at best, the changing dynamics of international data collection allows for the establishment of a baseline comparison between the tourism data of the United Nations Tourism Organisation and the FDI data of Financial Times FDI-Markets databases. We find that, not only, does FDI in tourism positively affect the various tourism categories’ figures but also that the main investors are not the traditional African FDI partners. FDI in tourism is also focussed on a narrow band of highly specialized tourist destinations, which allows for highly specialized policy adaptations. These results help to focus FDI policy formulation by African governments and Investment Promotion Strategies, Investment Incentives and Bilateral Investment Agreements between home and host countries as well their respective Investment Promotion Agencies. The results may also help industry to understand the untapped potential for tourism FDI in Africa.

Social Media Marketing как инструмент продвижения региональных инвестиционных порталов

Objective: to investigate the potential of Social Media Marketing as a tool for promoting regional investment portals in the information environment, to identify the most effective ways of its implementation and to determine the level of mastering of this tool by the Russian regions. Methods: general scientific methods (observation, comparison, analysis, induction, deduction, analogy, classification). Results: the analysis showed that today Social Media Marketing is an essential tool for interaction with the investment community and one of the most effective ways to promote the regional portal, which allows to increase the knowledge of and loyalty to the brand, to increase the targeted website traffic, to increase the awareness of investors about the specific features of the portal and the regional development agencies’ functioning, to promptly receive information about the investment environment and to establish contacts with investors. At the same time, the study of SMM-activity in the Russian regions revealed a very low level of quality of communication with investors through social networks. Scientific novelty: for the first time the article investigates the significance and makes the comparative analysis of the Social Media Marketing channels with regard to investment promotion agencies, as well as the results of the regional structures functioning for effective communication through social networks. Practical significance: the main results of the research can be used by the regional investment agencies in order to promote their websites, increase the quality of communication with investors and promote the investment attractiveness of the region as a whole.

How Effective are Investment Promotion Agencies? Evidence from China

Using both firm-level and city-level data from the Chinese National Bureau of Statistics and unique information on investment promotion agencies (IPA) in China, the present paper evaluates whether IPA affect foreign direct investment (FDI) from the perspective of both intensive and extensive margins; that is, re-investment by incumbent foreign-owned firms and total new FDI inflows into the city, respectively. After controlling for potential determinants of FDI and correcting for biases due to endogeneity, we find that, in general, IPA do not necessarily increase FDI in either case. However, IPA are found to promote re-investment by large foreign-owned firms. The results imply difficulty in the dissemination of information about the business environment to foreign investors.

Organizational diagnosis, the stepping stone to organizational effectiveness

Organizational survival, success and effectiveness depend on the ability of the organization to adapt to continuous challenges, competition and change. However, improving and changing organizations demand properly understanding and diagnosing them. So, where does diagnosis start and how can we measure effectiveness? Diagnosis starts with assessing key tasks, structure, people relationships, motivation, support, management leadership, attitude towards change and performance to identify gaps towards effectiveness. Effectiveness is evaluated in terms of the extent to which people have the right skills and competencies and are trained and strategically managed to enhance profitability (finance), the organization’s marketing strategy, operations/service and, measurement of the corporate/business development and growth achieved as a result of planned efforts to ensure organizational viability, stability and maturity. This study uses an integrated system evaluation process to diagnose the extent to which key tasks, structure, people relationships, motivation, support, management leadership, attitude towards change and performance impact on organizational effectiveness respectively. The population for the study comprised of all staff in a provincial trade and investment promotion agency in South Africa and a consensus approach was used through a cluster sampling technique, which secured an 85.4% response rate. In this quantitative, cross-sectional study data was collected using questionnaires and analyzed using both descriptive and inferential statistics. The results reflect that the diagnostic variables impact on organizational effectiveness in varying degrees. The important diagnostic dimensions and areas for improvement are identified and suggestions for corrective action are presented in order to enhance overall organizational effectiveness.

Developed economy investment promotion agencies and emerging market foreign direct investment: The case of Chinese FDI in Canada

In light of the perceived benefits derived from inward FDI, many developed economies have systematically established investment promotion agencies (IPAs) to attract foreign investment. While IPAs in the past have been created by a wide variety of countries and regions, their target economies have overwhelmingly been in developed markets. The rise of emerging market MNEs is significantly changing this picture. We analyse the impact of IPAs on attracting emerging market FDI to developed economies by looking at the example of Chinese FDI into Canada. We find strong statistical evidence that the presence of Canadian provincial-level IPAs located in China increases the likelihood of Chinese firms locating in that Canadian province. Focusing on the role of IPAs in lowering liabilities of foreignness, we explore how differences in host and home country contexts may explain our findings.

South African IPAs Attracting FDI: Investment Promotion Strategies

The provincial investment promotion agencies (IPAs) of South Africa play an important role to attract foreign direct investment (FDI) to the country. In order to do so, investment promotion strategies are developed and executed. This study investigates how the provincial IPAs of South Africa use their investment promotion strategies and points out the gaps in their strategies to attract FDI and improve on the approximate mean of 0.25% of the total world investment inflows from abroad. This contributes to their mandate and goals, which are to enhance economic development and contribute to economic growth by attracting FDI and to assist domestic companies to invest abroad. Both primary and secondary data are used. The study highlights that the majority of the provincial IPAs operate under government direction and that there are significant differences in the investment promotion strategies used. The study finds that 21-40% of budgets allocated for investment promotion go towards perception building. Macroeconomic and industrial policies are the most relevant factors when attracting FDI by the IPAs. The investment promotion (IP) strategies used by the provincial IPAs differ in terms of the investors they focus, the incentives used to attract those investors and the preferred contact method with the targeted investors. IPAs indicated that they use more tax incentives along with tailor made industrial policies, focussed on the specific needs of the investors.

Environmental complexity related information for the assessment of country logistics environments: Implications for spatial transaction costs and foreign location attractiveness

With on-going fragmentation and distribution of production and consumption across geographical space, information about national logistics systems is becoming increasingly important to decision makers in internationally operating firms and organisations. While continuing research on country logistics assessment generates some of this information, its relevance for the decision makers, and relationship to their unpredictability from foreign national logistics systems remains indefinite.This paper identifies and categorises the relevant, available information on country logistics environments by using a content analysis approach. We demonstrate the immensity and nature of this information, are able to confirm the changing spatial transaction cost structures, and to reflect upon the overall conditions of information-related complexity and globalisation in the environment. Besides making a contribution to the further development of the spatial impedance factors and measures that form the basis for decision maker unpredictability, the paper offers an alternative approach for measuring the importance of transportation costs in industrial location, and offers a useful lens to distinguish between the emerging literatures on national logistics systems. Finally the paper also offers practical implications on location attractiveness for investment promotion agencies and other public sector agencies for business development and cluster growth.

The Role of Investment Promotion Agencies in Attracting Foreign Direct Investments in the Southeast European Countries

This paper aims to assess the role of national and regional agencies in attracting foreign direct investment (FDI) in the Southeast European (SEE) countries and to connect the findings from IPA’s staff with the determinants of FDI inflows. The research is conducted using survey data and panel data analysis. The results indicate small, inadequate, and unexploited potential of investment promotion agencies (IPAs). They have participated in a small number of FDI projects and most of the FDIs came into the region without their participation. They do not have a qualitative approach to FDI. Most of the regional agencies (except in Croatia and Kosovo) do not even envisage cooperation with foreign investors. The panel data research has shown that GDP per capita, wages, inflation (as economic variables), but also enterprise restructuring, tax rates, trade and forex system (institutional variables) have influence on FDI inward stock.

THE ROLE OF INVESTMENT PROMOTION AGENCIES IN ATTRACTING FOREIGN DIRECT INVESTMENT

Establishing an investment promotion agency (IPA) has become a very popular institutional approach in the strategic promotion of foreign direct investment (FDI) across nations and regions worldwide. In this article, we examine the role of IPAs in improving the FDI environment and promoting inward FDI. The task of the article is, with the help of qualitative methods of research, to determine the promotion techniques and tools that lead to a better FDI performance and verify them in the cases of such investment promotion agencies as Invest Lithuania and Invest in Lviv Region (Ukraine).

Assessing the Contribution of Inflow of Foreign Direct Investment (FDI) in the Creation of Employment Opportunities to the People in Zanzibar: A Case of Tourism Sector

The main objective of this study is assessing the contribution of inflow of Foreign Direct Investment (FDI) in the creation of employment opportunities to the people in Zanzibar: Tourism sector being a case study. The methods used in the study was descriptive case study design, where by questionnaires were distributed to the 50 respondents, among them were people at Nungwi village, officials from Zanzibar Investment Promotion Agency (ZIPA) and managers from hotels in Zanzibar, also documentation and observation methods were used in the collection of data. The results show that 62% were benefited being employed in the tourism sector and their income have up for 60%, whereby before employment their income were lower for 80%. The report concludes that FDI inflow especially in the tourism sector has brought much positive impact in the creation of employment opportunities to the people in Zanzibar. In that case it is recommended that Revolutionary Government of Zanzibar should improve and promote policies guiding tourism sector investment in the country so as fully provide more employment opportunities and improve the countries’ economic development for the purposes of poverty reduction.

Foreign Investment and Supply Chains in Emerging Markets: Recurring Problems and Demonstrated Solutions

Multinational corporations account for 80 percent of all transfers of goods and services across borders, either within their own affiliate transactions or through networks with independent providers. As a result, the term supply chains is rapidly becoming the new norm in discussing the spread of trade and investment around the globe.From the point of view of developing countries, however, the ability to link host economies into international supply chains is anything but normal. There are important market failures and tricky obstacles that inhibit creation of supply chains in emerging markets. This working paper identifies the most important market failures and impediments that hinder the spread of supply chains in developing economies -- with findings quite at variance with much conventional wisdom -- and examines how some host governments have been successful in overcoming these obstructions. The evidence provides a useful perspective on the debate about the need for something that might be called industrial policy for countries that want to use foreign direct investment (FDI) to diversify and upgrade their production and export base. A sample of six diverse case studies -- chosen because they offer detailed information about information asymmetries, market failures, and coordination externalities -- shows clearly that developing country authorities should not merely sit back and wait to see what international market forces bring to them. The public sector that is needed takes the form of creating effective investment promotion agencies and funding industrial parks, reliable infrastructure, and vocational training with curricula designed by companies that wish to employ the graduates. These interventions surely qualify as a kind of industrial policy, and definitely cost public money. This approach might be called light-form industrial policy to harness FDI to development and generate backward linkages as deep as possible into the host economy.This light-form industrial policy contrasts with policies that target specific domestic industries for special government support and protection while excluding foreign investment altogether from the targeted industries or subjecting foreign firms therein to performance requirements in the form of domestic content mandates, joint venture mandates, and/or other technology-sharing pressures. This latter approach could be called heavy-form industrial policy. Country experiences, including evidence from China, reveal counterproductive outcomes from the imposition of explicit performance requirements on foreign investors.To a certain extent, emerging market hosts can carry out policy interventions on their own. But the evidence presented here shows that external support is often crucial to success. Contemporary policy discourse often implies, indeed sometimes assumes, that with the explosion of international private sector investment flows there is less need for developed country donors and multilateral financial institutions to support growth and development programs -- as opposed to pure poverty reduction programs -- especially in middle-income emerging markets. But the evidence introduced in this working paper shows that there is a vital role for external donors, including the aid agencies of developed countries, the World Bank Group, and the regional development banks, to work with host country governments to improve the functioning of markets so that emerging countries can better harness FDI for development.

Foreign Direct Investment (FDI): Bangladesh Perspective

Bangladesh is a country with thousand year’s history in international trade, investment and business. We have both good and bad experiences with the foreign investors or trading partners. Because of fertile plain lands and favorable climatic condition, ours had predominantly been an agricultural country for centuries. Industrial setup started its journey in the region mainly during British colonial age but got its momentum during 1950s. Investment promotion agencies started their activities at that period. Current Scenario: As a result, today we have an about USD140 billion economy, which is growing with on an annual average 5%-6.5% growth rate during last two decades. Bangladeshi economy is transforming from traditional agriculture based economy into industry based economy. Contribution of agriculture into GDP is reducing day by day but till now it employs 47.5% of workforce. In FY 2012-13, contribution of agriculture, industry and the service sector into GDP is about 13.09, 29% and 57.91% respectively. Contribution of investment is about 15.76% at the same time. Bangladesh received USD 1599.16 Million Foreign Direct Investment (FDI) in 2013 when we have exported about USD 30.71 billion and imported about USD 40.61 billion. Therefore the contribution of investment into GDP and percentage of FDI we received in the stated period is not satisfactory at all. Sectors for Investment: Readymade Garment (RMG) is the prime mover of Bangladesh economy along with remittance, and export of home textile, frozen food and shrimp, agro-processing products, tea, vegetables, plastic products, pharmaceuticals, electrical products, etc. Other potential Bangladeshi sectors for investment could be agro-based and agro-processing industry, skilled human resource export, ship building, tourism, basic chemicals/dye and chemicals, ICT and ICT based service, active pharmaceuticals ingredient industry and radio pharmaceuticals industry, polymer industry, jute and jute products, leather and leather products, hospital and clinic, light engineering industry, plastic industry, furniture, energy efficient appliances, frozen and processed fish industry, tea industry, home textiles, ceramics, toy, container service, warehouse, innovative and import substitute industry, and cosmetics and toiletries, etc.

Are Investment Promotion Agencies Effective in Promoting Outward Foreign Direct Investment? The Cases of Japan and Korea

In this paper we examine the role of investment promotion agencies (IPA) in promoting outward foreign direct investment (FDI) from Japan and Korea. Looking at two home countries enables us to control for both country‐pair time‐invariant characteristics and host‐country time‐varying characteristics. Our empirical results suggest that home‐country IPA tend to be more effective in promoting outward FDI in politically risky host countries. However, this finding depends on whether the home‐country firm is listed or unlisted. More specifically, we find that the positive effect of home‐country IPA on outward FDI in politically risky countries is limited to unlisted home‐country firms, which tend to be less productive.

Strategic Perspectives on FDI Attraction and Promotion into the Republic of Moldova

After a long period of economic misery, during the past decade the Republic of Moldova has experienced good economic performance in terms of GDP growth. Yet, many indications are that the Republic Moldova is underperforming in terms of FDI attraction. The Republic of Moldova wants and needs more FDI than it has been receiving so far. More importantly, it has the potential to attract more FDI. To tap into this potential will require meeting several conditions and concerted actions on many fronts, which are the main theme of this paper. Key actions discussed in the paper include: making FDI a policy priority, embedded in the development strategy; developing human resources for better FDI; enhancing the competitiveness of physical infrastructure; achieving excellence in regulating and administering investment; strengthening the domestic SME sectors and encouraging linkages with foreign enterprises; and establishing a full-fledged investment promotion agency.

Foreign Direct Investment and Total Factor Productivity Growth: New Macro‐Evidence

AbstractAlthough the role of foreign direct investment (FDI) in facilitating technology transfer is well known in the literature, empirical evidence regarding the effect of FDI on growth is mixed. The contradictory results in the literature may be due to the failure to account for endogeneity and for the abortive capacity of the hosting countries. Using panel data for 49 countries over the period 1974–2008 and the existence of Investment Promotion Agencies in the receiving countries as an instrument, our results show that increased FDI stock leads to higher productivity growth. We also find a significant positive effect on the interaction between FDI stock and distance to the technological frontier, suggesting that the ability of technologically backward countries in absorbing technologies developed at the frontiers increases as more FDI stock is accumulated.

FDI, the Crisis and Competitiveness of Transition Economies

We evaluate the impact of the crisis on foreign direct investment (FDI) and differences between selected transition and Western economies regarding their policies and attitudes towards FDI. Transition economies have been affected by the crisis more than Western countries, but remain more optimistic about the current and future role of FDI's influence on competitiveness, and also see FDI as a relatively more important instrument for enhancing competitiveness than their Western counterparts. In addition, the investment promotion agencies seemingly have a completely different set of excelling factors in transition economies in comparison to their Western counterparts. Transition and Western countries differ in terms of their need, environments and attitudes when it comes to FDI. Thus, one of the crisis-related implications is the need to tailor the FDI policy and promotion approach to each group's specific needs.

Case Study of Institutional Assessments in the FDI Environment in Croatia

The aim of the paper is to present the findings and results of research and analysis done in the framework of the CARDS project generally dealing with the development of the business and investment climate in the Republic of Croatia and more specifically dealing with the assessment and activity analysis of the investment development stakeholders.In its first part, the paper gives a broad overview of some of the factors of investment and business environment important for the topic of 'institutional co-existence'. In its second part, the paper presents the ranking of Croatia and more information on the progress made in the EU accession process. The third part presents the findings related to the institutional assessment of investment policy stakeholders having their stake in the formulation of the FDI policy in Croatia. It presents in-depth the institutional and policy aspect of the regulation of business environment which covers the Ministry for Economy, Labour and Entrepreneurship (MELE), Trade and Investment Promotion Agency (TIPA) as well as the regional development agency and others (such is one stop shop concept – HITRO.HR). Nevertheless, the roles, responsibilities, strategic goals and instruments are not clearly defined while the strong horizontal and vertical co-ordination between the various stakeholders is missing.Having the overview of the state of affairs and based on the examples from the good practices such are Czech Republic or United Kingdom as well as the activity analysis recommendations in the fourth part of the paper, in its fifth part the authors outline recommendations related to strengthening of the investment environment in Croatia and their impact at the general competitiveness score.

A bivariate causality link between foreign direct investment and economic growth

PurposeThe purpose of this paper is to examine the causal relationship between economic growth and foreign direct investment (FDI) in context of India.Design/methodology/approachUsing Toda‐Yamamoto granger causality technique, authors tried to examine the causal link between GDP per capita (proxy for economic growth) and FDI. The data is tested for stationarity using Augmented Dickey‐Fuller test and Phillips Peron test. Authors also examined the co integration properties using Johansen test to identify long run relationship between the two variables.FindingsIt was found that GDP per capita and FDI are integrated in long run. There also exist a bidirectional between FDI and growth in post liberalization period, i.e. post 1991. There is also evidence of FDI led growth in the pre‐liberalization period, i.e. pre 1991.Research limitations/implicationsThere are many factors which contribute to FDI and GDP per capita. A comprehensive study can be done to explore other determinants of FDI and GDP per capita.Practical implicationsThe findings reveal that economic growth measured by GDP per capita has become one of the important determinants of FDI after liberalization. The evidence of FDI led growth in both the periods signifies that policy makers should ensure a minimum level of economic growth to maintain India as an attractive destination for FDI. The policy should lay emphasis on business facilitation measures like improving the conditions for doing business in India, expanding the role of investment promotion agencies (IPAs) and providing single window for foreign investment.Originality/valueThere exists cross‐sectional studies on examining relationship between FDI and growth. However, there is a need to have country level study to identify FDI and growth nexus as it is sensitive to country specific factors which are unobservable in time series analysis of group of countries.