Foreign Investment Promotion Research Articles

Pertes et deuils migratoires chez les immigrants peu scolarisés au Québec

Qualitative research conducted in Quebec aims to trace the psychosocial profile of immigrants in a vulnerable situation due to their migratory journey and to identify the challenges of the actors involved in their integration process. The participants in the research are enrolled in a francization program specific to Quebec for immigrants with low literacy skills (Foreign Investment Promotion and Protection Agreement). The results raise several issues related to the grief and loss experienced by the most fragile immigrants. Indeed, the challenges of post-migration life and integration into the host society are added to the many migratory losses and the suffering of ongoing grief.

Water property rights in investor‐state contracts on extractive activities, affects water governance: An empirical assessment of 80 contracts in Africa and Asia

AbstractIn view of increasing globalization, the ongoing promotion of foreign direct investment and the lack of comparative literature on how water property rights are changing in the global South, this article asks: How have property rights in water evolved through investor‐State contracts on mineral, petroleum and land issues in Africa and Asia? We analyse 80 publicly available contracts—22 minerals, 40 petroleum and 18 land—of 34 African and 19 Asian countries. We find that: (i) in addition to a State's water law, water allocation is also implicitly governed by contracts and international investment treaties; (ii) States de facto privatize water by allocating quasi‐property rights through the granting of contracts to foreign international investors; (iii) such waters exploited by virtue of contracts reduce the ability of States to regulate water during the term of the contract especially as investors' water use is protected by bilateral investment treaties and potential compensation claims; and (iv) the need of the State to increasingly adaptively govern water as the impacts of climate change on water become more noticeable will be challenged by the long‐term quasi property rights granted by States to investors in such contracts.

The Legal Framework for Foreign Investment in the Iranian Banking Sector

Abstract The banking services are heavily regulated in the Islamic Republic of Iran. The regulatory framework is based on the Monetary and Banking Act 1351 (1972) which was supplemented with the Interest-Free Banking Operations Act 1362 (1983) in post-revolutionary period. The Council of Money and Credit of the Central Bank of Iran performs the regulatory functions. Iran has tried to attract foreign investment in its banking sector under the Promotion and Protection of Foreign Investment Act 1381 (2002). The current regulatory regime provides four channels to foreign investors for investment in the banking sector. First is partnership with the existing Iranian banks; second is establishing a development bank, third is to establish foreign banks, and fourth is to establish branches of foreign banks. Iran is likely to attract foreign investment in its banking sector especially after its accession to the Shanghai Cooperation Organization on September 22, 2021. This however will require reforms in the current regulatory regime that is stringent and ambiguous in many aspects related to the establishment, functions, operations, winding up of banks.

Italy’s Exercise of Foreign Investment Screening Power against Chinese Takeover

Abstract In March 2021, Italy vetoed the acquisition of an Italian company operating in the field of semiconductors by a Chinese group. It did so by using its so-called golden power, meaning the power to interfere with the management of companies to protect strategic economic sectors, introduced in 2012 and substantially revised in 2019 and 2020. The present comment offers an evaluation of the compatibility of Italy’s inward investment screening powers with international law norms on the promotion and protection of foreign investments by trying to outline the limits posed by the latter on domestic foreign investment screening mechanisms.

The Impact of Size on the Performance of Transnational Corporations Operating in the Textile Industry in Portugal during the COVID-19 Pandemic

The aim of this work is to understand the impact of size on the performance of transnational corporations (TNCs) operating in the textile and clothing industry in Portugal during the COVID-19 pandemic. For this purpose, we used ORBIS data for the period 2019–2020 and narrative, financial and correlation analyses to assess the performance of five companies. Thus far, the impact of company size on the competitiveness of Portuguese textile affiliates during the pandemic has remained unexplored. The results show that smaller firms performed better than larger ones, likely due to the higher fixed costs of the latter at times when orders declined worldwide. Our analysis suggests that there are some characteristics of TNCs that matter in explaining company-level performance during crises, such as management experience and flexibility. Furthermore, as Portugal is a major European textile exporter, it is useful for the host country to assess the economic sustainability of its foreign investors. The results provide some policy recommendations regarding the promotion of foreign direct investment (FDI) in Portugal.

Https://uet.edu.al/jus-justicia/articles/adr-and-domestic-courts-in-albania/

Practice has shown that the western democratic legal systems have developed several alternative dispute ways for resolving disagreements between the parties other that national courts. The article aims to explore and highlight the differences between peaceful means of conflict resolution and to provide a clear framework of the necessity of their promotion and further development. Depending on the different jurisdictions of the states, the opinion regarding the duties, rights and obligations of the parties in the process of ADR is different between each of this means and different regarding the domestic courts. In most legal systems the role of the conciliator, arbitrator or mediator it is simply to try to bring the parties together. For example, the proposed possibility of arbitration to withdraw the disputes from the jurisdiction of national courts is extremely beneficial to investment attractiveness. All this led to the exponential growth of bilateral and regional agreements for the protection and promotion of foreign investment, where one of the main provisions is the possibility of transmitting disputes between investors and the state of international arbitration. The sources of the law of ADR lie in a number of international conventions, international model laws and model rules, and institutional rules. To these may be added domestic legislation, reports of awards and academic writings. An arbitrator or mediator is described as ‘a disinterested person, to whose judgment and decision matters in dispute are referred and must act in accordance with the rules of natural justice. Mediation practitioners point to a number of advantages which the mediation process has over the domestic court. In fact, it must be acknowledged that ADR usually takes place when at least one of the parties is unreasonable. Helping the parties to see the reason is a useful social role. The difference between this methods of resolving disputes would be so that the purpose of a conciliator, mediator or arbiter, would be to encourage the parties themselves to understand what benefits they can get from resolving the case out of court in which way they deem most appropriate. Historical scientific methods are used in this research. The theory part it is presented with concrete cases from practice of both judicial and non-judicial ways of resolving conflicts, logical system, method of analysis and synthesis. In this paper as well are used formal-legal and comparative-legal methods. The writing is guided by the provisions of the conceptual theory of international arbitration law and domestic law. Research methods were used, of simple presentation of facts to argue the concrete point of view and the characteristics of the clarification of this research.

Enhancing Supply Chain Responsibilities through International Investment Agreements

Foreign direct investment is one of the modes of organisation of global supply chains. At the international level, foreign direct investment is mostly regulated through international investment agreements (IIAs). While most of these agreements are still silent on corporate responsibilities, there are some notable exceptions that mark the way forward toward a more balanced investment protection regime. This contribution argues that even though the main purpose of IIAs remains the promotion and protection of foreign investment, IIAs could equally be used to enhance corporate responsibilities. To that purpose, the contribution outlines possible legal sources and means of enforcement to establish corporate responsibilities through IIAs.

Impact of foreign ownership on firm productivity: evidence from Japanese manufacturing firms

This article presents the methodology to examine the impact of foreign ownership on firm productivity using firm-level data of Japanese manufacturing firms from 2000 to 2016, which include 1,458 listed companies in Japan. Firm productivity is represented by total factor productivity (TFP), which is estimated by the Olley–Pakes semiparametric estimation method to minimize the simultaneity problem in production function estimation. In the estimation of the impact of foreign ownership on firm productivity, system GMM estimation is applied to address a possible reversal causality problem between foreign ownership and firm productivity. Based on the case of the manufacturing firms in Japan, this article shows that 1 percentage point increase in foreign ownership increases the firm productivity by 0.06 percent. The evidence of this article supports the positive impact of foreign ownership on firm productivity and further implies that the promotion of foreign investment could be a policy option to improve firm productivity. Highlights This study analyzes the impact of foreign ownership on firm productivity. Firm-level data of the Japanese manufacturing firms from 2000 to 2016 are analyzed. The result supports the positive impact of foreign ownership on firm productivity.

Russian merger control: in favor of foreign companies?

PurposeThe paper aims to reveal the attitude of the Russian competition authorities towards cross-border mergers involving foreign buyers. The study addresses the following question: Is the probability of Russian competition authorities' intervention significantly different when a foreign buyer takes part in the merger? This is the key test to reveal whether competition authorities gravitate towards “economic nationalism” or “promotion of foreign investments”.Design/methodology/approachThe discrete choice model is applied to the dataset of 7,607 merger cases investigated by the Russian competition authorities between 2012 and 2017. The probability of competition authorities' intervention, such as merger correction by using remedies or deal rejection, is used as a measure of special attention.FindingsThe study finds out favoritism patterns of the regulator with regard to foreign companies. In particular, the deals involving a foreign buyer had less chance of intervention, i.e. imposition of remedies, from national competition authorities. The sanctions period does not moderate the probability of approval of a cross-border merger with foreign buyers by the Russian competition authorities.Originality/valueThe paper contributes to merger control literature by addressing the political economy issues. It discovers that, besides regulation by the law, there are hidden motives, such as protectionism or favoritism of foreign companies, which could drive the regulator's decision. Therefore, the studies of cross-border mergers provide an opportunity to investigate the political issues of merger control through the identification of a special attitude to foreign companies and analysis of regularities that might explain such a policy.

Have China's Pilot Free Trade Zones Improved Green Total Factor Productivity?

Free trade zones (FTZ) are designated areas for promoting trade openness and investment facilitation. In China, FTZs are also regarded as “green areas” in which planning actions and institutional innovations are implemented, and there is a commitment to promoting urban green and healthy development. Given that green total factor productivity (GTFP) is an important measure of a city’s health and green performance, this study exploits the difference-in-differences method to explore the impact of pilot FTZs on urban GTFP in 280 cities in China for the period between 2005 and 2017. The results show that the green areas positively contributed to the growth of GTFP. Moreover, the outcome holds with robustness tests. Statistically, the positive effect emerged in cities during the first three years after introducing the initiative, with the effect disappearing afterward. It also had a strong positive impact in the central and western regions and in large and medium-sized cities, while the influence remained insignificant in the remaining areas in China. Furthermore, the paper also reveals that the promotion of foreign direct investment and industrial structure upgrading are the primary channels through which the positive relationship between pilot FTZs and GTFP is established.

Canada’s Pro-Ban Stance on Double-Hatting: Playing the Long Game in ISDS Reform?

AbstractThe practice of arbitrators and counsel in investor-state dispute settlement (ISDS) cases simultaneously playing both roles — known as “double-hatting” — has been the subject of much controversy in recent debates on ISDS reform, notably, at the United Nations Commission on International Trade Law’s (UNCITRAL) Working Group III where a Draft Code of Conduct for Adjudicators in International Investment Disputes is under discussion. While Canada has been less than consistent in its approaches to ISDS in recent international investment agreements (IIAs), its position against double-hatting has been rather constant. This article explores whether this stance reveals a commitment on the part of Canada towards increased judicialization of ISDS or reflects a “flavour of the month” reform likely to change with differing IIAs and negotiating partners. Analysis of Canada’s recent IIA practices, including its model Foreign Investment Promotion and Protection Agreement, released in May 2021, and the positions it has taken at UNCITRAL’s Working Group III, lead the author to conclude that Canada appears committed to increased judicialization of ISDS in the long run.

A Study on Improving Competitiveness of Occupant Companies in Busan New Port Hinterland Complex

Purpose - As a study to improve the competitiveness of Busan New Port hinterland complex, this study was intended to identify the problems of the harbor hinterland complex and prepare measures to revitalize the value-added logistics. Design/Methodology/Approach - This study first examined the location characteristics of North hinterland complex and Ung-dong hinterland complex, and suggested that there are differences in occupancy period and public transportation, etc. In addition, through a survey, a cross-tabulation analysis was conducted on the activation of the value-added logistics of Busan New Port hinterland complex by occupancy complex and occupancy type. Findings - The results are as follows. First, the occupancy companies of Ung-dong hinterland complex were feeling difficulties in recruiting people and the lack of convenience/cultural facilities. Second, it was analyzed that assembly and inspection are important as value-added logistics activities. Third, incentives to attract global logistics companies and various business measures have been identified as important factors to revitalize value-added logistics. Fourth, it was analyzed that improving pubic transportation is the most important factor to revitalize the harbor hinterland complex. Research Implications - This study proposed law and system improvements, including the Foreign Investment Promotion Act, for attracting global logistics companies and various business activities in Busan New port hinterland complex. and the expansion of public transportation requires local governments to actively solve problems.

知识产权国际投资仲裁中的公共政策考量 (Public Policy Considerations in Intellectual Property-Related International Investment Arbitration)

Chinese Abstract: 在国际投资仲裁案件菲利普·莫里斯烟草公司（Philip Morris）诉乌拉圭案中，仲裁庭驳回了菲莫关于乌拉圭的反吸烟立法侵占了烟草公司商标的主张。仲裁庭在裁判说理中，大体上遵从了乌拉圭为减少烟草公司的经营活动以增强公共卫生的政策决定。菲利普·莫里斯诉乌拉圭案提出了这样一个问题，即除了公共卫生之外，法庭还应考虑其他一些公共政策考虑因素，例如促进外国投资和保护知识产权。本文探讨了“公共政策”的概念，以及与知识产权相关的投资仲裁法律制度也即知识产权法、世界贸易组织法以及国际投资法是如何处理公共政策方面的问题的。本文还回顾了与知识产权相关的投资仲裁案件例如菲利普-莫里斯诉乌拉圭（Philip Morris v. Uruguay）、礼来公司诉加拿大（Eli Lilly v. Canada）以及普利司通诉巴拿马（Bridgestone v. Panama）案件之中的公共政策考量。 English Abstract: In the investment arbitration Philip Morris v. Uruguay the arbitral tribunal rejected Philip Morris’ claim that Uruguay’s anti-smoking legislation expropriated the tobacco company’s trademarks. In its reasoning, the tribunal largely deferred to Uruguay’s policy decision to curtail tobacco companies’ business operations for the purpose of enhancing public health. Philip Morris v. Uruguay raises the question of whether there are, apart from public health, other public policy considerations which the tribunal should have given more weight to, e.g. the promotion of foreign investment and the protection of intellectual property (IP). The chapter explores the concept of ‘public policy’ and how IP law, WTO law and international investment law, i.e. the legal regimes relevant to IP-related investment arbitration, deal with public policy considerations. The chapter also reviews the handling of public policy considerations in the IP-related investment arbitrations Philip Morris v. Uruguay and Eli Lilly v. Canada, as well as Bridgestone v. Panama.

Mechanisms of housing marketisation in North Korea

In North Korea, the government establishes housing plans, and only organizations designated by the government can execute construction projects. Additionally, the Democratic People's Republic of Korea (North Korea: hereinafter, called DPRK) strictly prohibits housing exchange, leasing, and trading (hereinafter marketisation of housing) for private interest. The purpose of this study is to clarify how the marketisation of housing is possible under such a social system.In this study, as the background of marketisation of housing, we considered the lack of housing supply, the activation of jangmadang (local markets and black markets), the birth of Donju (nouveau riches), changes of constructors, the alteration of consciousness, the investment in real estates, and the deterioration of housing. This study examined whether housing marketisation has become normal through surveying North Korean defectors. Finally, we investigated the mechanisms of housing marketisation by dividing the mechanisms into ‘construction by ordering organizations and private investors’ and ‘construction by private investors.Although housing marketisation is illegal in the DPRK, authorities connive the marketisation in order to accomplish the target of controlling the national housing supply utilizing private capital. Additionally, we found that lobbying activities and bribery accompany every stage of the construction in the construction by ordering organizations and private investors and in the construction by private investors.Due to such an abnormal system, irregularities and corruption are prevalent in the construction process and cause serious side-effects including poor construction quality and problems in safety control. Housing marketisation is an inevitable phenomenon in the DPRK. It seems that the DPRK should introduce a system of housing marketisation across the board for the establishment of a sound social infrastructure in the country and the promotion of foreign investment.

MALAYSIA'S FOREIGN DIRECT INVESTMENT RELATIONS WITHIN THE ORGANISATION DEVELOPING EIGHT EONOMIC COOPERATION (D8) WITHIN COUNTERPARTS

Malaysia is a member of Developing-8 (D-8), which facilitated the formation of bilateral trade relations among member countries. This study focuses on Malaysia’s foreign direct investments (FDIs) within D-8. The purpose of this study is to strengthen the FDI ties with D-8 member states, where Malaysia must focus on cooperating for long-term investments and examining the existing FDI policies under Malaysia and its D-8 counterparts, as well as studying the opportunity of interdependence between Malaysia’s FDIs with D-8 member states. The main issue is the imbalance of Malaysia’s FDI preference with D-8 member states, which is followed by the weakness of Malaysia’s FDI outwards policy, specialised among the D-8 counterparts. Thus, Malaysia’s FFDI lacks penetration with D-8 member states. The qualitative research method, data collection, interviews, and content analysis method are used for this study. The respondents’ agencies for interviews are experts from the Ministry of Foreign Affairs (MOFA), The Bilateral Economic and Trade Relations Division of the Ministry of International Trade and Industry (MITI and the Foreign Investment Promotion Division of the Malaysian Investment Development Authority (MIDA). Coding techniques are applied for the coding process of the content analysis. This study also uses the theories of interdependence and political economy with SWOT analysis to examine the implementation of Malaysia’s FDI with D-8 counterparts. The findings of the study show that Malaysia is looking for quality investments without choosing where the investments come from, and FDIs with D-8 counterparts in several sectors can still be implemented if the D-8 counterparts are offering quality investments for Malaysia.

The quality of host government and China’s OFDI: Construction of micro-evaluation model of government quality

Government is not only an important participant in the process of national governance, but also a firm executor and supervisor of national policies. In the process of China’s active promotion of outward foreign direct investment (OFDI), the risks caused by the poor quality of the host government have not been paid enough attention to. This paper builds a micro-evaluation model of government quality from four aspects based on the quality of government expert survey. The results show that although the scores of developed countries are generally higher than those of developing countries, the growth of China’s OFDI in developing countries is higher than in developed countries. In particular, the growth of investment to the member states of The Belt and Road Initiative is more significant. How to realize mutually beneficial achievements between China's overseas investment and host countries with low government quality is an important issue for China.

Determinants of Ethiopian Coffee Exports to Its Major Trade Partners: A Dynamic Gravity Model Approach

The aim of this article is to examine export determinants of Ethiopian coffee to 31 trade partner countries using a dynamic gravity model and system generalised moment method of estimation (GMM) for the period 1998–2016. Descriptive results showed that Ethiopia was exporting only 39% of its total coffee production, and 53.5% and 34.13% of Ethiopian coffee exports were directed to European and Asian countries, respectively, over the period 1998–2016. Regression results revealed that trade openness, population size of Ethiopia, foreign direct investment and institutional quality index of Ethiopia are positively and significantly affecting volume of Ethiopian coffee export. But population of partner countries, weighted distance, lagged export volume and real exchange rate are negatively and significantly influencing export volume of Ethiopian coffee. Hence, Ethiopia needs to diversify its export destinations and export items a way from primary agricultural exports to secondary industrial exports in order to secure dependable source of foreign currency. Also, controlling corruption, increasing government effectiveness, ensuring political stability promotion of foreign direct investment and encouraging trade liberalisation would help to boost the volume of Ethiopian coffee export. JEL Codes: F12, F13, F14

The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia

For economic, Social, or foreign direct investment promotion reasons, tax exemptions or incentives are common under tax laws of legal system of different nations. Under Ethiopian stamp duty laws, some areas of foreign investments are exempted from the liability of payment of same; documents that are exempted in accordance with international agreements and conventional treaties approved by Ethiopian government. The objective of this study article is to show the relationship between incentives and foreign direct investment inflows in developing countries and the Ethiopian context. The thesis employs research methodology that follows conceptual and legal analyses and interpretation in a comparative manner. The meaning and nature of investment incentives under Ethiopian investment laws and other jurisdiction, determinant factors driving and influencing the inflows of FDI under developing counties and Ethiopia are discussed. The dominant model of low income countries/developing countries investment incentive i.e. tax exemption and tax holiday’s contribution and effectiveness in the attracting of FDI, and various economics researchers findings on the relationship between income tax incentives and FDI inflows are critically analyzed with the various laws and Ethiopian investment laws. Finally from the findings of different data we can conclude that weak investment climate cannot back up by providing tax incentives to attract FDI in developing countries and Ethiopia. The findings of the study revealed that tax incentive packages that are employed to attract FDI in developing countries are not in a position to accommodate and fulfill the comprehensive driving factors of the FDI and the interest of investors and host states.

Intensity of foreign investment promotion and development levels in Central–Eastern European regions

PurposeInvestment promotion is gaining in popularity, yet its relationship with regional development remains unclear and under-investigated. The purpose of this paper is to combine place marketing and regional development concepts to explore investment promotion in the Czech, Polish and Slovak regions. It identifies elements of best practice and investigates to what extent these are used in foreign direct investment promotion conducted by regional authorities. Organisation- and implementation-related elements are studied. The discussion aims to answer the question of how systematic Central–Eastern European regional investment promotion is, and what are the factors determining regions’ involvement in, and the extent of, promotion activities.Design/methodology/approachDiscussion is based on an original survey of Central–Eastern European (CEE) regional authorities' investment promotion. The paper develops a measurement of regional authorities’ engagement in investment promotion – an investment promotion index (IPI) and using non-parametric, two-tailed Spearmans correlation test investigates the relationship between IPI and socio-economic conditions in the regions. Kruskal-Wallis, a non-parametric test of difference is used to investigate statistical significance of differences in mean values between the three countries.FindingsThe analysis provides early insights into the relationship between regional development and investment attraction – the main theoretical contribution of the paper. Diverse levels of engagement in promotion are not influenced by the staple competitiveness factors of gross domestic product growth rates or foreign direct investment stock. Instead, it is conditioned by labour market situation in the countries studied.Originality/valueInvestment promotion relationship to regional development remains under-explored. The main focus of the analysis offered is the varying levels of CEE regional authorities’ involvement in investment promotion and its relationship to the socio-economic conditions prevailing in the regions. Exploring this relationship, the paper provides original contribution in the following two aspects: it establishes a systematic way of measuring regional authorities’ engagement with investment promotion; and it links the level of investment promotion to wider development of the regions.

Effects of Foreign Direct Investment and Trade on Labor Productivity Growth in Vietnam

Among developing Asian countries that have accelerated their integration with the global economy, Vietnam has achieved remarkable economic development. Vietnam’s development strategy prioritizing the promotion of trade and foreign direct investment (FDI) resulted in the rapid transformation of its industrial structure from an agro-based one to one led by the export-oriented manufacturing sector in the past three decades. Given the importance of labor productivity growth on the structural transformation, the study examined the effects of FDI and trade on labor productivity growth in Vietnam in the long run and short run. The study employed the autoregressive distributed lag (ARDL) model of analysis using data from 1990 to 2017. The ARDL model analysis revealed that FDI, capital goods import, and export unanimously contributed to the labor productivity growth in the long run, while the impact in the short run remained ambiguous. The results confirm the theoretical framework augmenting the positive relationship that exists between FDI and trade and labor productivity growth. Vietnam’s experience is expected to provide an important lesson to other developing countries.