Regulation Of Foreign Investment Research Articles

Targeted Liberalization: China's foreign investment regulation reform and its post‐WTO‐accession export surge

AbstractTo gain membership in the World Trade Organization (WTO) in 2001, China substantially modified its regulation of foreign direct investment. These reforms coincided with rapid changes in the composition of capital inflows, as the dominant entry mode shifted from joint venture to wholly foreign owned affiliate. Foreign‐invested enterprises contributed a rising share of China's rapidly growing exports. We investigate how much China's foreign ownership liberalization contributed to these observed trends in foreign investment flows and Chinese exports. Accounting for both the set of activities from which it removed foreign equity caps and those into which it newly encouraged investment, we estimate the impact of China's reforms on firm entry and exports using a difference‐in‐differences estimator. To eliminate bias resulting from heterogeneous and dynamic treatment effects, we also apply novel dynamic difference‐in‐differences estimators. We find that removal of foreign equity caps induced entry of wholly foreign owned firms, while having no significant effect on entry of new joint ventures. Concurrently, the designation of new activities for investment incentives induced foreign entry, particularly in the form of joint ventures. Reduced‐form calculations imply that FDI policy changes explain almost 9% of the increase in exports from foreign‐invested firms over the decade studied. The effect was larger in sectors identified as “high‐tech industries” by the Chinese government, as they contribute most of the estimated policy‐driven export growth from foreign‐invested firms. Thus, China's FDI regulation reform following WTO entry was targeted liberalization: elimination of equity share limits induced new foreign entry, while investment incentives encouraged formation of joint ventures.

Report on the First CELIS NOW Conference ‘The Age of Open Strategic Autonomy’

On 11–13 May 2023, the CELIS Institute’s Early-Career Scholars’ and Practitioners’ Network on the Law and Practice of Economic Warfare (CELIS NOW) organized its first conference on ‘The Age of Open Strategic Autonomy’ in Berlin, Germany. This new network is designed to provide its members with a unique opportunity to exchange ideas and engage with the growing community of scholars and practitioners interested in investment and trade law in this changing geo-economic world. The CELIS Institute is an independent non-profit, non-partisan research enterprise dedicated to promoting better regulation of foreign investments in the context of security, public order, and competitiveness. CELIS NOW was established by Jonas Fechter (University of Münster) and Janosch Wiesenthal (University of Passau) in 2022, in order to create a forum for early-career lawyers in the field of trade and investment law. Since then, CELIS NOW has grown in size. At this first conference, about 40 lawyers who are professionally engaged with geo-economic trends gathered in Berlin to exchange ideas related to the emerging doctrine of Open Strategic Autonomy. The conference was generously supported by BLOMSTEIN and Freshfields Bruckhaus Deringer. This report summarizes the conference proceedings. Open Strategic Autonomy, Economic Warfare, Economic Security, Geo-Economics, Investment Law, Trade Law, Investment Screening, Foreign Subsidies, Anti-Coercion Instrument

Economic and legal aspects of international regulation of foreign investment

The article conducts a scientific and practical study of economic and legal aspects of foreign investment, which is one of the spheres of regulation of international private relations. International legal documents in the field of investment were analyzed, in particular, on the promotion and mutual protection of investments. The connectivity of the subject of foreign investment regulation in conditions of ambiguity and interdependence is revealed, forming an international sphere of foreign investment, which includes national and international legal regulation, which creates a complex of legal norms and principles for regulating relations between various subjects of investment, both public and private sphere. It is noted that international legal norms should reflect not only the processes of interaction between states, but also regulate the sphere of international private law relations, which are established and provided by law. The need for the creation of favorable conditions for foreign investment in the need for appropriate legal forms and methods of protection of foreign capital investments, taking into account the two-level nature of regulation, because the improvement of the investment climate requires the presence of legal prerequisites for the interaction of various types and forms of ownership and subject composition, which include national legal and international legal regulation. It is emphasized that foreign investment is an important tool for both social and economic development of countries, since a successful investment policy is a prerequisite for the growth of the level of the economic component due to an increase in the volume of powerful production and an increase in the level of product quality. It was determined that foreign investment, due to its special position in international cooperation in the field of economic development, forms a complex of relations that reflect the objective aspects of the formation and development of foreign investment as an economic and legal phenomenon in society, in which states, international financial and economic organizations, international investment organizations, international non-governmental organizations, transnational corporations, private subjects of foreign investment, both legal and natural persons. It was established that there is a specific method of legal regulation of foreign investment using a certain complex of legal means, combinations of legal influence, having its own peculiarity, it indicates a combination of public law and private-law regulation of the specified area.

Legal Regulation of Foreign Investment Regime in the Oil and Gas Sector of Uzbekistan

This article examines the legal regulation of foreign investment in the oil and gas sector of Uzbekistan. It analyzes the challenges and issues faced in attracting foreign investment, explores existing legal frameworks, and proposes strategies for enhancing foreign investment in the sector. The study critically evaluates the practical and legal implications of the regulatory regime and highlights the significance of the research for the legal framework governing foreign investment in Uzbekistan's oil and gas sector.

The effect of ownership structure on social and environmental disclosure in Indonesia

This study examines the effect of ownership structure with management ownership, foreign ownership, dispersed ownership and block ownership sub-variables on social and environmental disclosure. The Global Reporting Initiative (GRI) disclosure framework was adopted to extract social and environmental disclosures. The research method used is a quantitative method. The population in this study are manufacturing sector companies listed on the Stock Exchange Indonesia in 2018-2020. A total sample of 243 was obtained using a judgment sampling technique with a sample of 81 companies. The analytical method used in this research is multiple linear regression. The results of the analysis show that on average, social and environmental disclosure in manufacturing companies in Indonesia is still quite low. This research shows that there is an influence of management ownership, foreign ownership, and block ownership on social and environmental disclosure but not significant for dispersed ownership. The results of the analysis show that foreign ownership has a fairly strong positive influence on social and environmental disclosure. It was found that foreign ownership dominates the ownership structure by 97.59%, so that company managers must give more consideration to ownership structure, especially foreign ownership and international environmental standards to design good and effective social and environmental disclosure strategies. This study may be of interest to regulators as material for consideration in making investment policies, especially foreign investment regulations.

STRUCTURAL CHANGE AND GROWTH PROSPECTS IN THE TURKISH ECONOMY: A DEMAND-SIDE DECOMPOSITION ANALYSIS

Over the past four decades, Turkey has undertaken a wide range of reforms that aim at the liberalisation of foreign trade, relaxation of the tariff system, deregulation of the financial system, and foreign investment regulations. Significant structural change experienced in the Turkish economy pursues access to the global market. This paper presents an empirical investigation of the growth prospects in both the Turkish economy and manufacturing industry during the whole period from 1995 to 2015 and the sub-periods of 1995–2001, 2001–2008, 2008–2015 and 1995–2015. Since investigating the dynamics of economic growth from the supply-side has been well documented in the literature, this work contributes to the literature on the sources of economic growth by providing a more up-to-date analysis from a demand-side perspective in the case of the Turkish economy. We make use of Chenery’s factor decomposition method that decomposes output growth into the growth of domestic demand, import-substitution, growth of export and intermediate demand. Conclusions revealed that the total output evolution of the whole economy and the manufacturing industry was mainly responsive to final domestic demand during the whole period of 1995–2015 and the sub-periods of 1995–2001, 2002–2008 and, 2008–2015. However, the nexus between the final domestic demand and the output evolution tended to weaken during the period from 2001 to 2008, but recovery took place again in the following periods. Moreover, the output growth that stemmed from export expansion was more prevailing in the manufacturing industry. To these ends, policies aimed at increasing income, demand, product diversity and reducing poverty should be applied to encourage the deepening of domestic demand. Furthermore, selective micro policies of industrial and technological upgrading and diversification should be applied to sustain output and export growth and, create a more resilient economy to external shocks

Article: Report on the CELIS Forum on Investment Screening

On 1–3 June 2022, the Common European Law on Investment Screening (CELIS) Institute organized its fourth annual conference ‘2022 CELIS Forum on Investment Screening’ (CFIS22). The Conference was held in Sweden, at Uppsala University. The CELIS Institute is an independent non-profit, non-partisan research enterprise dedicated to promoting better regulation of foreign investments in the context of security, public order, and competitiveness. It was set up in 2020 by Steffen Hindelang and J. Hillebrand Pohl, the convenors of this year’s conference, as a permanent successor to the ‘International Conference on a Common European Law on Investment Screening (CELIS)’, convened by Professor Hindelang and Andreas Moberg in 2019. The aim of CFIS 22 was to debate European investment screening on national security grounds from a strategic perspective on the theme ‘The Emerging Law of Investment Control in Europe: Screening, Sanctions and Subsidies’. CFIS was a major event which brought together, not just leading academic scholars, EU officials, national experts, diplomats, and policymakers, but also business leaders, think tankers, and representatives of the investment community and civil society, as well as the media from across Europe and beyond. The three-day event was generously funded by Riksbankens jubileumsfond, the Center for International Private Enterprise, the Swedish Institute of International Law, Datenna, Blomstein, and the Institute for Democracy Societas investment screening, foreign investments, CELIS, FDI, ESG, national security, public order, sovereign-driven investment.

The study of pilgrimage in aspects of the economy of tourism organization

The relevance of the work. At the beginning of the XXI century, when the service sector becomes a priority, various types of tourism are actively developing. Among them, religious tourism also occupies a worthy place, which, in our opinion, is a promising area of research. All over the world there are a huge number of religious buildings that are distinguished by historical, cultural and sacred and artistic attractiveness. Sacred objects can be visited all year round, regardless of weather conditions, religion, political ambitions and other reasons. Religious tourism as a scientific direction requires a theoretical basis and the development of a methodological base. The purpose of the work is economic analysis of religious tourism as part of tourism system with a special accent on Turkey. One of the most significant findings relates to the efficacy of integrated development plans initiated by the Turkish government for the Antalya region. This rational policy has led to a substantial increase in state revenues from the tourism industry, tallying at USD 33.3 billion in 1987. The study elucidates how the strategic regulation of foreign investment through integrated plans has not only optimized state revenues but also sustainably developed these resort towns into significant tourism hubs. The global pilgrimage tourism economy has been burgeoning as well, with a CAGR of approximately 8% from 2010-2020, reaching a net market valuation of around USD 60 billion. When dissected further, the data reveal that accommodation services constitute about 30% of the total revenue generated, followed by transportation services at 25%, and miscellaneous expenditures covering the remaining 45%. It unambiguously demonstrates that with meticulous planning and strategic investment, pilgrimage tourism has the potential to become a cornerstone in the diversification and enrichment of national and global tourism economies.

Foreign investment regulation and firm productivity: Granular evidence from Indonesia

When regulating foreign direct investment (FDI), countries often face a trade-off between pursuing national policy interests and suffering efficiency losses due to FDI restrictions. We demonstrate the presence of this trade-off in the case of a protectionist FDI policy in Indonesia. Using a yearly census of Indonesian manufacturing firms from 2000 to 2015, we link product-level changes in binding FDI regulation due to major regulatory tightening to changes in firm-level productivity. Controlling for an extensive set of fixed effects as well as potential political economy drivers of regulation, we show that a tightening of the regulatory environment was successful in reducing foreign capital reliance among regulated firms, and led to increases in FDI among non-regulated firms producing the same product. Despite compensating increases in domestic capital, regulated firms experienced relative productivity losses. This points towards either a less efficient allocation of domestic capital or a general inferiority of domestic capital as compared to foreign investments.

Mineral policy in the Gulf Cooperation Council (GCC) countries: The case of Saudi Arabia

This research paper intends to review the mineral development and investment policies of Saudi Arabia. The formulation of mining policies that will attract foreign investment must address conventionally acknowledged investor concerns and some new challenges. Issues that have been extensively examined in the paper include country's characteristics such as geological, political, financial, regulatory, operational, fiscal, social and environmental, and profit and marketing criteria. Once these criteria are analyzed for Saudi Arabia, they have been compared to the GCC region to provide insights of possible changes and improvements to both the GCC and Saudi Arabia mineral policy. For some time, Saudi Arabian's mineral policies were not favorable for developing the country's mineral sector, but mineral policies are now being changed to address aspects that need improvement. With better mining regulations in place; more efficient regulatory agencies; more liberal foreign investment regulations; a competitive tax system; upgraded infrastructure; a greater availability of excellent local expertise and skills; as well as a stable economic and political system, this will position the GCC as an excellent place to invest in mining and create more economic diversity for the whole region.

ДЕРЖАВНЕ РЕГУЛЮВАННЯ ІНОЗЕМНОГО ІНВЕСТУВАННЯ В УКРАЇНІ

The war, political and economic upheavals led to low investment activity, the curtailment of investment projects and the outflow of foreign investments from the Ukrainian market. In the conditions of the export of investment capital, without improvement of the investment policy and guarantees of capital security, business development and the inflow of foreign investments into Ukraine are impossible. Studying the specifics of state regulation of foreign investment activities will allow us to use the positive effects of foreign investment to improve the investment climate and develop investment infrastructure. The purpose of this article is to develop a system of measures to improve state regulation of foreign investments in Ukraine. The article examines the peculiarities of foreign investment activity in Ukraine. The scale of capital of non-residents in the economy of Ukraine is estimated. The following factors that reduce the country's investment attractiveness were identified: deployment of military operations in Ukraine; political and economic upheavals; significant withdrawal of foreign capital from the national economy; low activity of domestic investors under the influence of a number of macroeconomic factors; insufficient regulation of the investment process in Ukraine by the state; increasing internal and external debts. The shortcomings of the investment regulation system are identified: the inability of Ukraine to regulate legal relations and interests of investors with domestic legislation; ambiguous interpretation of provisions of legislative documents; a large number of regulatory acts that regulate the investment process; instability of national legislation in the field of investment; lack of guarantees of property rights of foreign investors; corruption in the investment sphere, etc. Measures to improve the regulation of foreign investments in Ukraine are proposed: harmonization of national legislation with the norms of international investment law; simplifying the procedure and shortening the terms of business registration and closing; introduction of control over the prevention of double taxation, currency exchange, admission to bank lending; providing regions with the necessary set of tools to increase investment attractiveness; decentralization of state regulation by attracting foreign investments into the economy of Ukraine. Key words: investment, foreign investment, direct foreign investment, investment infrastructure, investment climate, investment policy, state regulation.

Gaps in the international legal regulation of foreign investments

Gaps in the international legal regulation of foreign investments

Legal regulation of foreign investment during the period of sanctions

Legal regulation of foreign investment during the period of sanctions

From Sticks to Carrots: China's Foreign Investment Regulation Reform and its Post-Wto-Accession Export Surge

From Sticks to Carrots: China's Foreign Investment Regulation Reform and its Post-Wto-Accession Export Surge

Foreign Direct Investment in Tanzania. An Analysis of its Investment Laws

Foreign direct investment (FDI) as a source of economic development has been embraced by most nations in recent years. Substantial liberalization of existing investment laws has been pursued to promote the seamless influx of FDI into some of these economies. National foreign investment rules, legislation and the legal structure of international investments matter in attracting FDI to a greater number of developed countries, including Tanzania. The control of the activities of FDI in a destination country is seen at three different phases. The national, regional as well as a third stage which requires regulation at the international level. In this article, attention shall be given to the model of Tanzania’s investment code for foreign investment. A study will be made on the various investment laws providing for the admission of FDI in Tanzania, the handling of foreign direct investors and their deposits, movement of deposited foreign funds, and dispute settlement mechanisms. Recommendations shall be made where foreign investment regulations are found to be subpar when contrasted with the rest of the country.

Criminal Law Protection Against Illegal Investment Entities in Indonesia

The Investment Alert Task Force re-released the latest list of fraudulent investments in September 2020. At least, there were 99 illegal foreign and domestic investments that were included in the list. A total of 99 illegal investments are suspected of carrying out business activities without permission from the competent authority. These entities are considered to have the potential to harm the public because they commit fraud by offering very high and unreasonable returns. The formulation of the problem raised in this study is about the rise of illegal domestic investment crimes that duplicate business activities on behalf of officially licensed entities in Indonesia. In this research, the paradigm used is post-positivism paradigm. The post-positivism paradigm wants to prove that everything is based on reality that can be built based on experience, observation, researchers are neutral towards the object of research, even though the researcher holding this paradigm remains neutral towards the object of research, he wants to examine what actually happened from the things that happened. as if it was certain. The results of the study describe the modus operandi of domestic investment and foreign investment regulations based on Law Number 25 of 2007 concerning Investment and the reformulation of some clauses through the omnibus law of the Job Creation Act No. 11 of 2020. Rearrangement of investment regulations is expected to provide legal certainty from the perspective of regulation and legal protection from the perspective of law enforcement. In conclusion, the Financial Services Authority Investment Alert Task Force is needed, which is a combination of various law enforcement teams, must closely monitor the business activities of God's foreign capital investment in Indonesia and provide legal protection for investors who legally conduct business activities in Indonesia. Keywords: Crime, Foreign Capital Investment, Omnibus Law, Investment Alert Task Force. DOI: 10.7176/JLPG/115-01 Publication date: November 30 th 2021

Foreign Investment in Ukraine: Types and Forms

An important condition for the transition to a market economy is the intensification of the investment process. Among other factors, attracting foreign investment is crucial. For their effective use, an appropriate regulatory framework for regulating the legal basis for their implementation is required. It is necessary to determine the range and legal status of foreign investors, types and forms of foreign investment, legal means of protection of the rights of foreign investors. At the same time, the mechanism of regulation and protection of foreign investments is influenced by the legal regime of investment, which is established by the national legislation of Ukraine. The article is devoted to the classification of types of foreign investment. Money, goods and corporate rights, intellectual property, rights in them and securities rights, requirements for the exploitation of natural resources as a form of foreign investment are considered. The legal regime of the listed types of foreign investments are analyzed in detail. The evolution of legislation in the field of foreign investment regulation is investigated. Knowledge on foreign investment, is a legal regime as comprehended. The directions of improvement of the mechanism of attraction of foreign investments by established privileges in taxation of profits of foreign investors, legal support of the investment process is highlighted. Prospects of foreign direction and sphere of investment state policy of Ukraine are analyzed.

Moving Beyond Disappointment: India, FDI, and Sustainability

executive summary: This essay examines what lessons can be learned for sustainable finance from India's recent history of foreign investment. main argument India has not increased its share of FDI in recent years as much as has been hoped. Risks for FDI continue to be high, especially due to growing economic nationalism and flawed dispute resolution mechanisms. The destinations for the investment India receives are strongly shaped by the risk perceptions of foreign investors—they prefer the stock market, services sector, and projects with minimal upfront investment and no political exposure. This has hindered the government's attempts to mobilize investment into the manufacturing sector and has negative implications also for sustainable finance. Most green infrastructure projects in India, or those related to sustainable development, do not fit the risk profile preferred by foreign investors. Thus, judging by India's recent history with FDI, energizing sustainable finance into India will require deeper reform. policy implications • The Indian government will have to bring its actual regulation of foreign investment closer to its welcoming rhetoric to improve the climate for FDI. • To attract greater levels of investment, attempts to favor "Indian" companies over others in various sectors must end. • Dispute resolution mechanisms must be reformed to encourage FDI—both by expanding capacity in India's judicial system and by accepting international arbitration awards. • Sectors in India crucial to sustainable and greener development, such as renewable energy and green infrastructure, will need to be ring-fenced from political risk.

CHINA’S INVESTMENT CLIMATE AND IT’S CONTRIBUTION TO THE GLOBAL SUSTAINABLE DEVELOPMENT ACHIEVEMENT

The article analyzes the factors affecting China’s investment attractiveness, the features of creating a favorable investment climate in China, and investigates new trends of FDI in China. The article highlights the main directions of attracting foreign direct investment in the Chinese economy. The paper aims to systematize the theoretical aspects of the state’s investment attractiveness and analyze the investment attractiveness of the Chinese economy at the present stage of development. The purpose of the article is to determine the PRC’s contribution to global sustainable development, taking into account the fact that the PRC is strengthening its position in the world arena due to the inflow of foreign investments. The article initially examines the role of foreign direct investment in the development of the state’s economy. Each country has a specific approach to attracting foreign investment, which is predetermined by the level of socio-economic development, the degree of external openness, and the established objectives. Therefore, the first stage of the research was an analysis of investment inflows and outflows. Changes that took place due to the implementation of the “open door” policy were considered. Then the advantages and disadvantages of China’s policies aimed at stimulating foreign investment were analyzed in detail. We studied the state and dynamics of investment processes in the PRC, examined the specifics of the regional and sectoral structure of foreign investment in China, evaluated the economic essence and classification of foreign investment, forms and methods of state regulation of foreign investment, as well as some aspects of the legal regulation of investment activity in China. We have systematized the main advantages and risks of the PRC investment climate. It was found that, despite the significant investment attractiveness of China, there are many investment risks. Still, the Chinese government continues reforms aimed at improving the investment climate of the state. A review of China’s position in the ratings of investment attractiveness, such as the Ease of doing the business score, the Global Competitiveness Index, and the Global Sustainable Competitiveness Index was carried out. It was made an intermediate conclusion that foreign capital is increasingly rushing to developing countries, especially to the dynamically developing economies of the BRIC countries, the undisputed leader in attracting foreign investment among which is China. The work results give every reason to predict the growth of foreign investment in the PRC’s economy since the country is characterized by stable and positively dynamic development. It is also assumed that the inflow of investments into the PRC’s economy is reciprocal since China is smoothly turning from a recipient of investments into an investor ready to contribute to global sustainable development.

Dangerous Liaisons: The Story of Special Economic Zones, International Investment Agreements, and Investor–State Dispute Settlement

ABSTRACT This article focuses on the interaction and relationship between Special Economic Zones (SEZs) as facets of unilateral economic law, international investment law, and the investor–state dispute settlement (ISDS) system in a four-fold manner. It initially explains the role of international investment agreements in protecting foreign investments in these zones. Then, it classifies the public or private nature of such zones and goes on to examine related claims through past case law, to determine how modern SEZs must be created to reduce host State liability. Whilst doing so, it provides important suggestions to improve the domestic and international success of SEZs by reducing costs associated with it. In this manner, this article endeavours to highlight the need for a balance in public policy between the rights of host States and foreign investors to ensure that SEZs continue to attract significant amounts of foreign investment. It also stresses on understanding transnational foreign investment rules and the implication of the previously concluded investor–ISDS proceedings so that host States can ensure better regulation of foreign direct investment in these areas.