Measures Of Foreign Direct Investment Research Articles

Globalization, foreign direct investment, and child mortality: A cross-national analysis of less-developed countries, 1990–2019

Social scientists have long debated the impacts of foreign investment for developing countries. However, the relationship between foreign investment and child mortality is still heavily contested among comparative international social scientists despite decades of research. I bring new cross-national evidence to bear on this contested debate, where the competing arguments of neoclassical economic theory and foreign investment dependency theory are evaluated using fixed effects, dynamic, and two-stage least squares panel regression models. I find that inward foreign direct investment stock exerts a beneficial effect on child mortality in less-developed countries, net of relevant statistical controls. These results are also robust to a variety of regression diagnostics and alternative choices of econometric specification. These findings contribute to a growing body of literature finding that traditional sociological measures of foreign direct investment—in some cases—generate beneficial effects in less-developed countries.

Do the Inward and Outward Foreign Direct Investments Spur Domestic Investment in Bangladesh? A Counterfactual Analysis

The net contribution of the decomposed measures of foreign direct investment (FDIs), e.g., the inward and outward flows of FDIs, to domestic investment is still inconclusive in the case of underdeveloped and developing countries. The current literature bears testimony to this fact. Hence, this research examines the impact of inward and outward foreign direct investments (FDIs) on the domestic investment in Bangladesh. This study considers annual time series data from 1976 to 2019 and estimates this data property under the augmented ARDL approach to cointegration. In addition, this research employs the dynamic ARDL simulation technique in order to forecast the counterfactual shock of the regressors and their effects on the dependent variable. The results from the augmented ARDL method suggest that the inward FDI has a positive impact on domestic investment, while the outward FDI is inconsequential in both the long run and the short run. Besides, our estimated findings also show the economic growth’s long-run and short-run favorable effects on domestic investment. At the same time, there is no significant impact of real interest rates and institutional quality on domestic investment in the long run or the short run in Bangladesh. In addition, the counterfactual shocks (10% positive and negative) to inward FDI positively impact domestic investment, indicating the crowding-in effect of the inward FDI on the domestic investment in Bangladesh. As the inward FDI flow is a significant determinant for sustained domestic investment in Bangladesh, the policy strategy must fuel the local firms by utilizing cross-border investment.

Bringing the Company Back In: A Firm-Level Analysis of Foreign Direct Investment

ABSTRACTThe industry standard for studying multinational corporations (MNCs) has been to evaluate patterns in aggregate country-level measures of foreign direct investment (FDI). Though certainly related, these data are at best a proxy for the actual commercial and productive activities of multinationals that most political scientists purport to be interested in. Simply put, this is a very indirect way of testing theories about the sociopolitical and economic factors that motivate MNCs’ choice of host countries. This article introduces a new firm-level data set designed to get around this problem by permitting more direct analysis of multinationals’ foreign operations. It then revisits the relationship between regime type and direct investment, finding evidence that MNCs are more likely to establish new subsidiaries in democracies than in nondemocracies. However, further analysis reveals that the strength of this relationship varies by context. Specifically, MNCs rely on regime type as an indicator of political risk when they lack an existing relationship with the host state. In addition, those operating in extractive industries are generally less responsive to political institutions than those operating in manufacturing or services. These results suggest that firm- and sector-specific factors deserve greater consideration than they have been given in the existing literature.

A Comparative Study of the Inter-Industry Determinants and Economic Performance of Foreign Direct Investments in France and Canada

Multinational corporations and import competition assume high profiles in economic policy debates in both Canada and France. An initial glance at the structure of foreign direct investment and trade in these two countries also indicates certain similarities. The openness of the Canadian and French economies to international trade is quite comparable, while such industries as petroleum and natural gas, pharmaceuticals, and para-chemicals head both countries’ lists of the sectors with the largest shares of foreign controlled sales and assets. In addition, there is a relatively high correlation coefficient of .603 between the inter-industry measures of foreign direct investment in the two countries (based on the sales data used in this study), while the correlation between the sum of their import and foreign subsidiaries’ shares (total foreign penetration) is .489.