Sustained Development of Direct Foreign Investment in 1995

Ｉｎ1995,Ｃｈｉｎａｃｏｎｔｉｎｕｅｄｔｏａｄｖａｎｃｅａｎｄｃｏｍｐｌｅｔｅｍａｊｏｒｒｅｆｏｒｍｍｅａｓｕｒｅｓｒｅｌａｔｅｄｔｏｆｉｓｃａｌ,ｔａｘａｔｉｏｎ,ｆｉｎａｎｃｉａｌ,ｆｏｒｅｉｇｎｅｘｃｈａｎｇｅ,ｆｏｒｅｉｇｎｔｒａｄｅａｎｄｉｎｖｅｓｔｍｅｎｔｓｙｓｔｅｍｓＦｕｒｔｈｅｒｉｍｐｒｏｖｅｍｅｎｔｉｎｔｈｅｃｏｕｎｔｒｙｓｉｎｖｅｓｔｍｅｎｔｅｎｖｉｒｏｎｍｅｎｔｗａｓａｃｃｏｍｐａｎｉｅｄｗｉｔｈｃｏｎｓｔａｎｔｉｎｆｌｕｘｏｆｏｖｅｒｓｅａｓｉｎｖｅｓｔｍｅｎｔａｎｄｃｏｎｓ…     

What do We Know About Investment Under Uncertainty?

Recent theoretical developments relating to investment under uncertainty have highlighted the importance of irreversibility for the timing of investment expenditures and their expected returns. This has subsequently stimulated a growing empirical literature which examines uncertainty and threshold effects on investment behaviour. This paper presents a review of this literature. A variety of methods have been used to investigate the empirical implication of irreversibility in investment, the majority focusing on the relationship between investment flows and proxy measures of uncertainty. A general conclusion is that increased uncertainty, at both aggregate and disaggregate levels, leads to lower investment rates. This suggests that there is an irreversibility effect, under which greater uncertainty raises the value of the 'call option' to delay a commitment to investment. This effect appears to dominate any positive impact on investment arising from the fact that greater uncertainty, under certain circumstances, increases the marginal profitability of capital. The methods used raise a number of issues which call into question the reliability of the findings, and these are addressed in the paper. However, if such irreversibility effects are present, then their omission from traditional investment models casts doubt on the efficacy of such specifications. JEL Classification: D81, D92, E22     

A Review of the Reform of China's Investment Planning System in 1995

ＩｎｏｒｄｅｒｔｏｉｍｐｌｅｍｅｎｔｔｈｅＤｅｃｉｓｉｏｎｏｆｔｈｅＴｈｉｒｄＰｌｅｎａｒｙＳｅｓｓｉｏｎａｎｄｔｈｅｓｐｉｒｉｔｏｆｔｈｅＦｉｆｔｈＰｌｅｎａｒｙＳｅｓｓｉｏｎｏｆｔｈｅ14ｔｈＣＰＣＣｅｎｔｒａｌＣｏｍｍｉｔｔｅｅ,ｔｏｑｕｉｃｋｅｎｔｈｅｅｓｔａｂｌｉｓｈｍｅｎｔｏｆｔｈｅｓｙｓｔｅｍｏｆｓｏｃｉａｌｉｓｔｍａｒｋｅｔｅｃｏｎｏｍｙａｎｄｔｏｐｒｏｍｏｔｅｔｈｅｎａｔｉｏｎａｌｅｃｏｎｏｍｙｄｅｖｅｌｏｐｉｎｇｆａｓｔａｎｄｃｏｎｔｉｎｕｏｕｓｌｙ,ｔｈｅＳｔａｔｅＰｌａｎｎｉ…     

Franchise Value Change Information of State-owned Commercial Bank and Securities Investment Risk

The investment strategy choice of state-owned commercial bank is related to its franchise value change information. This paper analyzes the franchise value change information of state-owned commercial bank. The franchise value change information shows that the franchise value of state-owned Commercial Bank is descending. Along with the descending of the franchise value, state-owned commercial bank strengthens its high risk investment motive when it chooses its investment strategy. State-owned commercial bank tends to run the high risk of investing securities because its investment variety is very sparse. Based on the theoretical principle of how to control securities investment risk, this paper proposes some countermeasures and suggestions that state-owned commercial bank strengthen the control of its securities investment risk in order to perfect its investment strategy.     

State Auditing With the Investment in Public Sector： Case of Vietnam

In Vietnam, in the current period, public investment plays an important role in the improvement of technical infrastructure systems, economic and social development of motivation to promote national development. However, the question is how to ensure that these sources of funds are used most effectively in terms of limited resources. In this article, the author would like to emphasize the critical role of the state auditor which is not only in the transparency of information, in enhancing the trust of the citizens, but also in providing important and reliable information to the public sector agencies, units, investors, and people in the society. From that, it could help to serve the management and administration of revenues and expenditures of the state budget as well as reasonably and efficiently using financial resources and assets. In case of perfectly conducting those tasks, they will contribute the power to the economy, fight corruption as loss or waste, and detect and prevent violations of law; improve the efficient use of the budget, the money, and property of the state; and serve effectively for the operation of the National Assembly and People＇s Councils at all levels of the implementation and monitoring function to decide important issues of national and local governments. With the above information, these matters in Vietnam will be solved through this paper that consists of five parts： （1） the basics about the current public investment in Vietnam; （2） the role of state auditing in improving performance management and monitoring of investment; （3） the limitations of state auditing in public investment; （4） many solutions to promote the role of state auditing in improving the effective investment activities; and （5） conclusion.     

Political Impact of Chinese Foreign Direct Investment （FDI） in the European Union （EU）

This paper explores the political challenges posed by the recent influx of Chinese outward foreign direct investment （OFDI） into the European Union （EU）. Chinese OFDI has increased substantially in recent years. Chinese direct investment is still minute in the EU, but it is growing fast, and the strong upward trajectory is likely to continue in the years to come. This surge represents challenges and opportunities for EU countries. In the current context of economic and debt crisis in Europe, whether China is seen as a saviour or a predator, the question of a Faustian bargain made by European countries by courting and hosting Chinese investment needs to be asked. The benefits of foreign direct investment （FDI） for the host economy are well known, but Chinese OFDI may come with implicit strings attached and could potentially act as a Trojan Horse, affecting European norms and policies. The influx of Chinese OFDI can create an unhealthy transatlantic competition with security ramifications, which should therefore be addressed. It is interesting to find the right balance between ensuring the benefits from Chinese FDI （from job creation to productivity gains） and protecting from its harmful effects.     

Convergence in Transition Countries – Focus on Investment: Central and Eastern Europe, 1970–1996

Our data on investment in Central and Eastern European economies reveal that, though investment rates were typically high in the 1970s, the marginal efficiency of investment was low. Investment shares begun to decline in the 1980s, before the collapse of the communist system, but there was some recovery in most countries after transition. We use the Kalman filter framework to test for convergence in investment rates. We find some evidence of convergence in Central European countries – former Czechoslovakia, Poland and the countries of the former Yugoslavia. For the remainder of the socialist bloc, however, we were unable to isolate convergence in investment shares. This revised version was published online in July 2006 with corrections to the Cover Date.