Western Investors Research Articles

Investment Climate in the MENA Region: Are the Stabilisation Clauses in Foreign Direct Investment Agreements an Obstacle to Progress?

Abstract Foreign direct investment agreements between Western corporations and the countries of the Middle East and North Africa region (MENA) deserve attention. On one side, the MENA region is a developing region rich in natural resources and therefore a destination interesting to Western investors. On the other, the MENA region is perceived as a volatile and unstable investment environment. Therefore, international investment agreements in the said region often include stabilisation clauses that serve as contractual mechanisms protecting investors from any changes in the laws and acts of nationalisation and expropriation by the host states. As stabilisation clauses have serious adverse effects on the sovereignty of the host states and the development of human rights, this article will take a deeper view of the stabilisation practice and aim to reveal how this contractual mechanism might represent a Catch 22 with respect to the further development of the MENA region countries, especially with respect to human rights and internal governance.

Cooperation of the People’s Republic of China With Countries of the African Continent in the Military Sphere

The purpose of the research paper is to investigate the collaboration between the People’s Republic of China (PRC) and African nations in the military domain, examining the impact of ideological, socio-economic, international, and other elements.
 Scientific novelty. Based on documents and historiographical materials, the study analyzes the stages of development, characteristics, and content of the PRC’s military cooperation with African countries.
 Conclusions. The PRC’s with African countries has gone through a long and complex path. The first stage (late 1950s – mid-1970s) coincided with the rise of national liberation struggles in Africa, and China’s involvement had an ideological character.
 The second stage, (late 1970s – 1990s) witnessed a transition to commercialization, but faced limitations due to resource constraints, low-quality weaponry, and concerns about relations with Western investors. However, cooperation with Western corporations to modernize the military-industrial complex and develop new weapons was disrupted by the events in Tiananmen Square in 1989. Instead, cooperation with Russia in the defense field intensified, which allowed China to update the military-industrial complex and develop new weapons systems. However, due to their low quality, they did not stand up to competition, particularly in the African arms market. From the mid-1990s, China involved European and American corporations in modernization process, under the condition of potential export opportunities.
 The third stage of cooperation began in the early 2000s and continues to this day. China has significantly expanded its military cooperation with African countries through various military training programs, participation in international arms exhibitions, arms loans, military equipment sales, and involvement in UN peacekeeping missions. Deepening military cooperation strengthens China’s position in Africa and increases its competitive advantage not only in the African arms market.

Firm-Value Effects of Carbon Emissions and Carbon Disclosures: Evidence from Taiwan

SYNOPSISExtant accounting research based on data from the United States, Europe, and Australia finds that increases in carbon emissions are associated with lower firm value. However, recent research indicates that investor perspectives on corporate social responsibility (CSR) in other parts of the world differ from those of Western investors. This study investigates whether increases in carbon emissions, as one indicator of poor CSR performance, are also associated with a lower firm value in Taiwan. Using carbon disclosure data from Taiwanese-listed companies between 2012 and 2016, we find that firm value is positively associated with carbon emissions, which contrasts with the findings of extant research. Likewise, firm value is not associated with a combined measure of financial information and carbon emissions in Taiwan. Our findings suggest that international generalizations of the findings of the extant research on the relationship between carbon emissions and firm value should be undertaken with caution.JEL Classifications: G32; M4; M48; Q56.

Тенденции и перспективы привлечения иностранных инвестиций в арктические мегапроекты в условиях геополитической напряжённости

The article analyzes the participation of foreign investors in the implementation of investment projects in the Arctic zone of the Russian Federation. The features of organizing foreign investments at the regional level are considered. The dynamics of indicators of attracting foreign investment in the Russian Arctic in 20162021 is analyzed. It is noted that in the last few years, the attraction of loans from foreign banks has decreased to a minimum, and the entire volume of investment was carried out at the expense of direct investments by foreign investors in large megaprojects of the Russian Arctic. The situation with the involvement of foreign investors in Arctic projects in the context of geopolitical tensions in 2022 is as-sessed. It is concluded that Western companies are currently withdrawing their assets from joint Arctic projects, while the potential for investment cooperation with Asian, Latin American and Turkish partners in the Arctic zone of the Russian Federation is increasing. It has been established that the withdrawal of Western investors from joint Arctic projects carries not only financial risks associated with the search for new sources of investment, but also technological risks that necessitate the development of alternative options for obtaining the necessary equipment. As ways to overcome the difficulties associated with the withdrawal of Western investors from Russian Arctic projects, it is proposed to intensify direct state financing of the implementation of infrastructure facilities based on the program method, as well as to direct efforts to create interstate mechanisms for financing large Arctic projects with friendly countries interested in the development of Arctic policy within the framework of existing BRICS and SCO associations.

Russia in the Media and Public Space of Modern Kyrgyzstan

The article was prepared on the materials of a scientifc discussion held by the National Communications Development Research Institution, dedicated to the study of the communication regime in Kyrgyzstan. The authors examine the decline in the level of knowledge of the Russian language and interest in the Russian-language media, talk about the need to develop cooperation between the Kyrgyz and Russian media and civil society institutions, and develop the infrastructure of Russian schools, especially in rural areas. The question is raised about changing approaches to the choice of an event series to preserve the common historical memory of peoples. Noting the great positive signifcance of cooperation between Kyrgyzstan and Russia for the development of Kyrgyz society, the authors talk about important problems: the development of an anti-Russian infrastructure in Kazakhstan (supported by Western investors) and its impact on public opinion, especially Kyrgyz youth. The article was based on the results of a scientific discussion held at the National Communications Development Research Institution (NIIRC), Moscow, Russia in 2022.

Партнерство по глобальной инфраструктуре и инвестициям: задачи и перспективы развития

The article is devoted to the Partnership for Global Infrastructure and Investment (PGII). This initiative is a part of the common approaches of the United States and its G7 partners. The prerequisite for its creation was implementing the Chinese “Belt and Road Initiative” (B&R), which the U.S. and its allies consider a severe challenge to their interests in the world economy. The PGII will focus on soft infrastructure development in middle- and low-income countries. It will contribute to introducing modern digital technologies and evolution of Industry 4.0 in developing regions. Furthermore, the following priorities are within the framework of the Partnership: climate and energy security, digital communications, healthcare, and social equality. The most important difference from the “Belt and Road” is the model of development and financing of projects. Unlike the Chinese public funding approach, the PGII will attract private investment. However, it requires active work with governments of the recipient countries to adapt their institutions and legislations. It is a prerequisite for reducing sovereign risks and attracting Western investors. At the same time, implementing necessary standards creates the risk of time lags against the backdrop of dynamically developing Chinese projects. The competition between the PGII and B&R can lead to opposing political and economic blocs, negatively manifesting the emerging international relations system. Such a division can take the form of developing incompatible standards and requirements of political loyalty in exchange for access to goods, services, and technologies for the PGII recipient countries.

“A New and More Vigorous Growth”: Resilience and Southern Ecologies in Antebellum Literature

In the nineteenth century, descriptions of bleak southern landscapes were routine in abolitionist and antislavery writing, linking withered crops and the South’s soil crisis to the region’s moral and agroeconomic collapse.1 As Harriet Beecher Stowe’s description of Simon Legree’s plantation in Uncle Tom’s Cabin (1852) depicts, this decline was sometimes connoted through other kinds of environmental imagery: the voids of pine-barrens, swamps, and other places whose soil quality and terrain made agriculture difficult, if not impossible. In an era of Southern boosterism by western investors and proto-secessionists, abolitionists and antislavery activists invoked a wide variety of outwardly impoverished, wilted landscapes; from Tidewater plantation to Mississippi Valley swamp, these settings were supposed to represent slavery’s many evils and the institution’s fated end.2 Located in Red River country in Louisiana, Legree’s estate seemingly reaffirms such familiar deterministic portrayals of the South: The landscape is “broken,” “shattered,” and “rotting,” and his house, once well-tended, is in “utter decay,” next to a garden “all grown over with weeds” (290, 292). Nearly every aspect of the plantation is affected by slavery’s rot. But as much as Legree’s plantation typifies the corrosive effects of “the peculiar institution,” just as significant are the things that seemingly flourish despite—and sometimes because of—such decay. What was once a smooth-shaven lawn before the house, dotted here and there with ornamental shrubs, was now covered with frowsy tangled grass, with horse-posts set up, here and there, in it, where the turf was stamped away, and the ground littered with broken pails, cobs of corn, and other slovenly remains. Here and there, a mildewed jessamine or honeysuckle hung raggedly from some ornamental support, which had been pushed to one side by being used as a horse-post. What once was a large garden was now all grown over with weeds, through which, here and there, some solitary exotic reared its forsaken head. (292)

Market Harms and Market Benefits

Market Harms and Market Benefits

The uneven geography of real estate investment by Mainland Chinese state-owned and private enterprises in the U.S.: Local market conditions, migration, and ethnic networks

Since the 2010s, foreign direct investment in real estate (FDIRE) by Mainland Chinese firms has emerged as a major force within global real estate markets, challenging Western investors’ traditional dominance. It is unclear, however, whether Mainland Chinese FDIRE is fueled by the same motivations as those of investors from advanced economies, which to date have represented both the primary investors and main objects of study. One major difference may be that Mainland Chinese investment originates in an institutional environment comprised of strong state intervention and social networks important for fostering business and ethnic ties. To uncover the potentially unique determinants and heterogeneity of Mainland Chinese corporate real estate investors, we build and analyze a state-level panel dataset of Mainland Chinese FDIRE by state-owned enterprises and private enterprises in the U.S. from 2010 to 2017. Our empirical results reveal the importance of Chinese migrants in promoting Mainland Chinese real estate investment, especially by private enterprises. Our findings also demonstrate that at the state level, Mainland Chinese FDIRE exhibits few agglomerative tendencies.

ВЕНЧУРНЕ ІНВЕСТУВАННЯ В СУЧАСНИХ УМОВАХ РОЗВИТКУ СВІТОВОЇ ЕКОНОМІКИ

The article examines the formation of domestic venture financing, the features of its modern production and further development prospects in the context of restructuring the national economy on an innovative basis. This is largely due to the underdevelopment of the Ukrainian securities market and the inability of venture funds to attract funds from the population or interest foreign investors in future projects. Venture capital investment is still poorly developed in the former Soviet Union. Many companies are not aware of the opportunities that open up for venture investors, so most promising projects are financed by Western investors. Venture capital investments have been operating in the United States and Europe since the 50s of the last century. Accordingly, there is a lot of positive experience in implementing programs in this area. More positive experience means more people who want to participate in this sector of the stock market. In the post-industrial economy, venture capital investments are beginning to play a leading role, ensuring rapid growth of innovative projects. Today, the economy is being» pushed « not by steelmaking plants or mines, but by scientific developments and high-tech solutions, especially in the informa- tion sphere. In other words, the economy needs innovation. The latter, in turn, require investment, without which projects cannot be implemented. It is impossible to effectively finance such projects from the budget, and the stock market is also useless, since you have to invest money in non-existent production facilities. The situation is similar with lending – developing innovative companies often do not have collateral, without which it will not be possible to get a bank loan on adequate terms. In such circumstances, only venture capital investment can help. And it’s nice to see that investors see the prospects for such investments and are increasingly willing to invest in new ideas and solutions. The risk is compensated by the fact that the profit from one successful investment can cover the losses from many unsuccessful investments. Therefore, the legal and organizational components of the process of ensuring and implementing domestic venture financing require further refinement.

Differences in Investment Concepts between Chinese and Western Investors from the Cultural Perspective

The investment concept, reflecting the investor's investment purpose and willingness, is a value that embodies the investor's investment personality characteristics, prompts investors to carry out investment analysis, judgment, decision-making, and guides investor behaviors. Due to different maturity of the capital market in China and Western countries, there are many differences in the regulatory level, cultural and behavioral patterns of the supervision and management departments of the capital market between Chinese and Western investment philosophy. This article analyzes the differences in investment ideas between Chinese and Western investors from the culture perspective. This thesis studies on the basis of four cultural differences: "The Golden Mean" and "Interest Maximization"; the face-culture and individualism; rule of man and rule of law; and gambler psychology and adventure spirit. Based on these four aspects of cultural differences, four different investment concepts of Chinese and Western investors are analyzed: long-term investments and short-term speculation; "Herd Effect" and independent decision; grapevines and public information; and leveraged trading and allocation of funds. This thesis adopts several cases to analyze the differences between Chinese and Western investors in financial products such as stocks, gold, and futures, and in investment behavior such as the long-term investment, short-term speculation, leveraged trading, and investment portfolios. With cultural differences between China and the West probed into, the differences between Chinese and Western investors' investment concepts are justified. It is hoped that this effort will help investors deepen the understanding of the capital markets in China and the West, enable Chinese investors to learn the Western mature investment concepts, and facilitate the regulators to manage the capital market effectively.

INHIBITORS AGAINST INNOVATORS: THE EFFECT OF DELAYED TRANSIT TRANSFORMATIONS

The article is devoted to the consideration of the complex issue of the reasons for the «delay» of political transit in the post-Soviet countries in general and in Ukraine in particular. The main author's hypothesis is the assumption that it is the activities of differently motivated subjects (inhibitors and innovators) in combination with the fundamental features of the cultural background of a particular country that determine the pace, overall trajectory and intermediate results of the democratization process. Particular attention is paid to the discussion around the question of whether transit is the only evolutionary trajectory or can be interpreted as a number of alternative directions of progress towards the standards of democratic governance.
 The object of this article is the features of the socio-political transformation of the post-Soviet countries.
 In turn, the subject of the article arises a ratio of the socio-political activity of innovators and inhibitors that is unique in national conditions, which directly affects the content and results of the democratic transition.
 The complex nature of the central research problem presupposes the use of an appropriate methodology, the central place in which is occupied by: a systemic approach, comparative and structural-functional methods, institutional analysis. From the author's point of view, it is this arsenal of methods and research procedures that helps to clarify the nature of the negative results of the socio-political transformation of the transit process in such post-Soviet countries as Ukraine.
 An analysis of the characteristic features of socio-political transformation in Ukraine indicates that the elite is motivated to conserve political informal practices and postpone changes in any way, and imitation reforms act as a legitimizer of the elite in the eyes of Western investors, creating a positive reputation for progressive reformers for its representatives.
 The migration of reformers from the state of innovators to the state of inhibitors is due to their desire to become an elite in order to extract economic rent with the help of power. The idea is substantiated that the way out of the vicious circle of quasi-substitution of the elite is associated with the painstaking work of the real supporters of reforms to diagnose the vulnerable elements of the national trajectory of democratization and education of new generations - carriers of innovative types of thinking and supporters of values ​​and procedures of democracy.

Adaptation, innovation, and industrialization: the impact of Chinese investments on skill development in the Zambian and Malawian cotton sectors

ABSTRACT This paper examines Chinese firms’ operations in the Zambian and Malawian cotton sectors with emphasis on the manner and effects of knowledge transfer. As new players in the arena, Chinese investors have adopted business models and management styles that differ from those of previous foreign investors in the region. Their low-cost and low-risk approaches have helped them grow quickly in these two countries and seize considerable market share from the established Western investors. Through an in-depth case study and comparison with Western companies, the author reveals that the Chinese investors flexibly modify conventional knowledge transfer channels like labor training, demonstration, and forward and backward linkages to fit their business models and local socio-economic contexts. Simultaneously, they take advantage of China’s strength in manufacturing and experiment with synergistic development in the industrial sector to overcome growth constraints.

Children's Literature as a Front in the War on Terror: Ineffective Policy, Ineffective Literature

Morocco is often praised for its proactive and innovative CVE (countering violent extremism) programme. This article analyses a three-part Arabic-language book series, Maʿ Naṣir wa Basma [With Nasir and Basma], produced by an organ of the Moroccan religious bureaucracy, the Mohammedan League of Religious Scholars, that ostensibly seeks to discourage adolescents from being susceptible to recruitment to VE (violent extremist) organisations. Starring two young Moroccan children, these books portray jihadists as old, ridiculous, or inept and the main characters as in need of protection by a paternalistic state, leaving children, especially young men, underprepared for the recruiting efforts of such organisations. The books emphasise state intervention over child action, suggesting the books are directed more at Western investors in need of reassurance than at children, supporting the critique made by some observers that CVE is more about security theatre than preventing violence.

CONCESSIONS OF THE 1920s – THE FIRST ATTEMPT
 TO ESTABLISH ECONOMIC RELATIONS WITH THE WEST

The article analyzes the use of concessions to attract foreign capital and technology in an almost complete economic blockade because of the revolution and civil war, as well as the fact that the revolution in other foreign countries has not
 occured. The article indicates particular regulations in the procedure for the infusion of foreign concessions into Soviet Russia. In addition, the paper points out how this
 process gradually developed, as well as what problems arose for western investors in the course of investing their capital in the country. The author shows particular industries that mostly used foreign capital, names donor countries, and provides statistical data on the number of applications for the opening of concessional filed by foreign investors. The paper provides examples of specific concessions. The author draws attention
 to the careful selection of concessionaires, states the principles of concessions’ operation in terms of planned and command economy. The original literature of the 1920s is used in the article. The aticle defines the concessions’ place and
 role in the Russian economy. The author points out that the questions arising between the Soviet power
 and foreign investors concern price policy and employed workers’ compensation that, however, was not typical of all concessions. Moreover, the article provides statistical data concerning the number of contracts concluded in the main sectors of
 the economy and the benefit it brought to the economy, as well as the number of citizens of Soviet Russia involved in the economic activities of foreign concessions.
 The author makes a conclusion that the state policy of concessions was a forced measure aimed at improving the state economic development by attracting foreign capital and technology.

Alleviating the Thucydides' Trap through Welfare State Dependence: How the Funding Needs of the Western Welfare State Can Influence Multilateral Relations with China

AbstractThe dual threat of a US–China confrontation and the rise of populism in the West due, in part, to the gradual decay of the welfare state, paint an ominous picture for the future of the post‐war status quo of ever‐expanding prosperity. Hegemonic competition between the incumbent superpower (the USA) and the challenger (China) framed as the Thucydides' Trap and adverse demographic and financial trends are the main causes behind both crises. In this paper, we argue that amidst deteriorating demographics, the sustainability of the Western welfare state could be significantly enhanced by positioning Western institutional investments in the regions across India and South East Asia – areas with strong modernization dynamics and the world's nascent most populous middle class. Such a policy could generate long‐term higher risk‐adjusted returns for Western pension funds, especially if Western investors look for complementarities with China's Belt and Road Initiative (BRI). The proposed geographical calibration in Western institutional investments could lead to a relationship of strong reciprocal dependence between economic and social growth in the target regions, exports of Chinese construction and financial capacity, and Western welfare state viability. We call the suggested policy the ‘welfare state dependence’ hypothesis. The key objective of the hypothesis is the promotion of peaceful economic and geopolitical co‐existence in Eurasia through rational re‐alignment of the incentives of Western polities with Eurasian growth. But to make this new approach feasible, a number of BRI policy reforms that support its multilateralization are required.

СПІВПРАЦЯ З МВФ: ВПЛИВ НА ЕКОНОМІЧНЕ ЗРОСТАННЯ КРАЇН СВІТУ І УКРАЇНИ

Глобальна економічна система вимагає більшої координації та взаємної узгодженості, щоб не провокувати міжнародні фінансово-економічні кризи. Тому для їх мінімізації функціонує такий потужний орган, як МВФ. У цілому його засновано на неоліберальних північноатлантичних ринкових цінностях, він створює умови для співробітництва між зацікавленими сторонами і захищає його легітимність у довгостроковій перспективі, підвищуючи його ефективність. Не всі країни можуть продуктивно співпрацювати з МВФ, іноді спостерігаються зниження темпів економічного зростання і посилення кризових явищ в їх економіках (Сомалі – 1981 р.; Кенія – 1990-ті роки; Індонезія, Малайзія і Таїланд – 1997 р.; Аргентина – 2001 р. тощо). Проте є і позитивні приклади співпраці країн світу з МВФ (Перу – 1956 р., Мексика – 1956 р., 1982 р. і 1994 р., Португалія – 2011–2014 рр., Камбоджа – 1992 р., Бразилія 2015–2016 рр., Польща – 2009–2011 р., Греція і Кіпр – 2009–2010 рр. тощо). Співпраця з МВФ завжди є певним індикатором реформ і довіри західних інвесторів до країн, з якими співпрацює МВФ. Якщо в країні такі цінності домінують, а державні інститути сформовано повноцінно і неупереджено (ринкове середовище, верховенство права, антимонопольні обмеження, наявність інфраструктури тощо), тоді є можливість взаємовигідно співпрацювати. Без цього співпраця буде неефективною і може не привести до економічного зростання.Співпраця з МВФ для України станом на 2015–2020 рр. є важливою з огляду на необхідність забезпечення фінансово-економічної стабільності. Таке співробітництво надає можливість зменшити проценти по обслуговуванню і частоту виходу на ринки міжнародних комерційних запозичень. Проте, якщо співпрацю з МВФ не буде продовжено, тоді в Україні збільшаться ризики зростання боргового навантаження на бюджет, дестабілізації курсової політики і, як наслідок, кризових явищ в економіці. Це зумовлює активізацію системних змін і реформ, які дозволять досягти успішних результатів у співпраці України з МВФ.

Doing business in China: Challenges and opportunities

Though increasingly attractive to Western investors, China can be a daunting environment in which to start a business because of the opacity of the cultural norms and a growing sense of nationalism. An analysis of 20 years of research and local experiences highlights the modern entrepreneurial spirit that currently co‐exists with complex, traditional values in China. By better understanding the nuances of these traditions and the context in which they are most commonly manifested, Western businesspeople can foster the good relations and engagement needed to assure the success of their ventures.

Business Activity and Assessment of the National Banking System in Terms of the VBM Concept

The reform of the Russian banking system is being stalled due to the imperfection of existing methods of assessing both the whole market value of business and its banking segment. This circumstance restrains the business activity of Western investors in the Russian financial market, provokes momentary speculative sentiments in it and strengthens crisis factors. The purpose of the research was to reveal the relevance and the possibility of applying the VBM concept, recognized and accepted in the majority of developed economies, to the banking business. The analysis of the works of foreign and domestic authors shows the need for further Russian theoretical developments. It is proved that the banking business market in Russia is undervalued. Based on the aggregate analytical data, the free cash flow to equity (FCFE) of the banking system is calculated. Based on the net profit of the banking system, its market value and the range of values in which it can be found are estimated. It is concluded that the growth of the Russian banking system measured in terms of capital and assets does not lead, as a minimum, to the growth of the market value, and, as a maximum, is accompanied by a decline in the market value. The prospects of the practical use of the VBM concept both for individual bank management and for the industry in the whole are substantiated.

Theoretical aspects of management of investmentinnovative activity of agricultural enterprises

The article establishes that investments are necessary for the enterprises for the organization of effective process of production of qualitative production, ensuring profitable economic activity. The state is obliged to regulate and promote the creation of an attractive investment climate in the country, attract and direct investment in priority sectors of production to meet the priority needs of the population. Studies show that the economy of Ukraine now cannot meet the requirements of Western investors. Among the main reasons for the unattractiveness of the Ukrainian investment climate are the slow pace of reforming the economy, the legislative framework, as well as the irrational distribution of domestic investment – private and public, high taxes, excessive regulation and politicization of the economy. It is proved that when determining the feasibility of investing in the national economy, a foreign investor should also take into account the peculiarities of development and the available set of opportunities of each administrative-territorial unit. The lack of a sound methodological approach to the assessment of development does not allow a potential investor to determine the real state of affairs in a particular region and the country as a whole, which, as a result, can lead to a decrease in the volume of foreign capital in the domestic economy. The level of investment attractiveness of the Kherson region is estimated. It is revealed that the main reason for miscalculations in attracting foreign investment is that in Ukraine there is still no systematic policy on the formation of the investment climate. The results of the study can be used by all stakeholders, including public authorities and local self-government, leading enterprises in the region.