Foreign Direct Investment and Trade: A Study on Selected Brazilian Industries

This study aims to investigate whether foreign direct investment (FDI) growth improved the Brazilian foreign trade in the long run and whether there is a predictable relationship between a firm's FDI strategy and a firm's foreign trade. We applied moderated multiple regressions and generalized linear models to test the effects of FDI on both export and import equations of 11 Brazilian industries from 1996 to 2009. Our data sources include the Ministry of Development, Industry and Foreign Trade Ministry, Central Bank of Brazil, and the Applied Research Institute. Results showed that FDI is correlated with increased exports in the short run, but not in the long run. In the long run, the positive relationship between FDI and exports will only occur for export-oriented industries in which resource-seeking strategies are preponderant. We found a positive relationship between imports and FDI in the short run, particularly in import-oriented industries. A negative relationship between FDI and imports was found in the long run.     

外商直接投资对中国商品进出口影响的实证分析

本文采用贸易引力模型,结合混合回归分析与横截面分析两种方法,对1992年至2004年外商对华直接投资对中国商品进出口、出口、进口的影响进行了实证分析。混合回归结果表明,外商对华直接投资对中国商品进出口、出口、进口的增长均存在长期且显著的促进作用,而且这种促进作用存在时滞。横截面分析结果表明,每年外商对华直接投资对于中国商品进出口、出口、进口的促进作用随着时间的推移是波动的,但从总趋势来看,这种促进作用在不断增强。     

Intermediary Products: FDI Strategies,Imports, Exports,and Trade Balances in Developed Economies

Has the relationship between the dominant investment motives of multinational enterprises (MNEs) and national trade balances, imports, and exports changed over time? A 1996 study hypothesized and found that the MNE market versus resource seeking investment motives in developed countries (DCs) resulted in different aggregate impacts on national trade balances, imports, and exports. In this study, we ask whether the increased use of intermediary products, a major change in the way MNEs conduct business, affect the previously found patterns. Because firm‐level data on intermediary products is not widely available across countries, we indirectly test their impact, hypothesizing that the rise in use of intermediary products has changed MNE investment motives in DCs, resulting in stronger relationships between foreign direct investment (FDI) and imports/exports in high‐FDI DCs but weaker links between FDI and national trade balances. Implications and future research directions are discussed. © 2015 Wiley Periodicals, Inc.     

Dynamic causality testing for EKC hypothesis,pollution haven hypothesis and international trade in India

This study examines the causality relationships between foreign direct investment (FDI), economic growth (GDP) and CO₂ emissions along with the level of trade (exports and imports) taking place in India. The study uses data obtained from World Development Indicators (WDI) of World Bank Group for the period 1982–2013. The study employed the dynamic multivariate Toda-Yamamoto (TY) approach that uses the modified Wald (MWALD) test. Among the major findings of the study are: the existence of both Pollution Haven Hypothesis and Environmental Kuznets Curve (EKC) hypothesis in India. The other findings of the study are: FDI is causing exports; exports are causing imports; imports are causing CO₂ emissions; and finally CO₂ emissions and GDP are causing each other. This finding concludes mainly two things. First, India imports more of pollution-intensive manufactured goods. Second, FDI is causing GDP in India but through CO₂ emissions.     

Do overseas investments create or replace trade? New insights from a macro-sectoral study on Japan

This paper investigates the relationship between outward foreign direct investment (FDI) and exports and imports from Japan, employing an augmented standard gravity model. Several econometric techniques, including the Gamma Pseudo Maximum Likelihood estimator, are used to rectify possible problems of heteroskedasticity and zero trade flows inherent in the estimation of gravity models of trade. The major finding is that outward FDI is trade enhancing for the Japanese manufacturing industry. However, we find that whether outward FDI creates or replaces trade depends on the industry under scrutiny. Our results indicate that the complementary relationship between FDI and trade is dominant in Japanese manufacturing, especially in the food and beverages, electric machinery, primary metals, and precision machinery sectors. We find also that Japanese overseas investments substitute for imports of chemical products, and for both exports and imports of general machinery.     

基于PanelData模型的FDI与对外贸易关系实证研究——以浙江省为例

关于FDI与对外贸易之间的关系,学术界一直没有定论。本文利用PanelData模型,对浙江省FDI与进出口贸易之间的关系进行实证研究。研究结果表明:浙江省11地市FDI对进出口贸易存在显著的创造效应和固定效应,浙东北地区FDI对进出口贸易的创造效应和固定效应明显大于浙西南地区,区域差异性较大。对此,本文提出了相应的政策建议。     

外商直接投资与我国农产品和食品贸易关系的研究

本文运用计量经济模型,对我国农产品和食品贸易与FDI之间的关系进行了研究,结果表明我国农产品和食品进口、出口和总贸易量与FDI之间皆存在长期稳定的均衡关系,而且这种关系具有互补性。在此基础上,本文还对各变量之间是否存在因果关系进行了检验,以便进一步揭示二者之间的联系。同时结合我国农产品和食品贸易与FDI的特点,对结果进行了相应的讨论。     

FDI对我国价格贸易条件影响的实证分析

本文利用1985～2006年的统计数据,建立了包含价格贸易条件、初级产品进口额、工业制成品出口额、贸易顺差和外资企业出口占我国出口总额的比重这5个变量的协整模型和误差修正模型,对外商直接投资对我国价格贸易条件的影响进行了实证分析,实证结果表明工业制成品出口是导致价格贸易条件恶化的重要原因,而初级产品进口对改善价格贸易条件有正效应,但正效应目前还不显著,FDI对改善我国的价格贸易条件有显著的正效应。在此基础上,本文提出了改善我国价格贸易条件的政策建议。     

New exports matter: Discoveries,foreign direct investment and growth,an empirical assessment for Middle East and North African countries

Export diversification has become a priority goal for the development of the Middle East and North African (MENA) countries. In this article, we aim at measuring both the effects of exports' diversification on growth in MENA countries and the way new exports and foreign direct investment (FDI) interact with each others in the process of growth. Although the effects of FDI on growth have been scrutinized by numerous studies up to now, the effects of diversification and discoveries in export have only very recently been assessed. But no one has made explicit the way FDI and export discoveries interact in the growth process. A model is estimated by the system-generalized method of moments and we provide robust evidence that export discovery and FDI stimulate gross domestic product (GDP) growth in our sample of countries, and that FDI does not necessarily have the same effect on growth according to the level of discovery of the country. We also show that the joint positive effect of new exports and of imports suggest that technological spillover from import but also from the integration to global value chains are likely to occur in our sample of countries.     

A comparison of FDI determinants in China and India

This study explores foreign direct investment (FDI) determinants in China and India and fills the gap in the literature by providing a comprehensive empirical comparison analysis. Two panel data sets and two statistical models are employed to identify the determinants of FDI inflows from home countries worldwide to the two host countries by considering both home and host countries' characteristics. The empirical results show some interesting similarities and differences between the two countries. Market growth, imports, labor costs, and country political risk/policy liberalization are the determinants for both countries. However, exports, market size, and borrowing costs are important to China's FDI, while geographical and cultural distance factors are important to India's FDI. © 2009 Wiley Periodicals, Inc.     

What Drives India's Surge in Service Exports?

India's prowess in the service sector has been recognised the world over. Sustaining services exports is important not only to sustain India's high growth rate but also to compensate for a consistent deficit in merchandise trade and to maintain stability on the external sector. In this context, we analyse the factors of India's performance in services exports over the past three decades. The results reveal that endowment factors such as human capital, improvement in physical infrastructure and financial development are key drivers for India's surge in services exports along with world demand, exchange rate and manufacturing exports. While factors such as institutions, R&D expenditure, telecommunication, foreign direct investment and financial development significantly impact the export of modern services, traditional services exports are more dependent on infrastructure development, manufacturing exports, world demand and exchange rate. India's economic reforms in the financial sector, FDI, communication so far have helped the services exports, but India needs to focus on supply‐side factors to improve the competitiveness – and thereby volume – of services exports.     

Impact of Openness on Growth in Different Country Groups

This paper evaluates the impact of openness on growth in different country groups using a panel of 79 countries over the period 1970–98. It distinguishes itself from many existing studies in three aspects: Firstly, both trade and FDI are included as measures of openness. Secondly, countries are classified into high‐, middle‐ and low‐income groups to compare the roles of trade and FDI in these groups. Thirdly, the possible problems of endogeneity and multicollinearity of trade and FDI are carefully dealt with in a panel data setting. The main findings are as follows. Total trade has a general positive impact on growth in all country groups, although the impact from imports is not significant in high‐income countries. FDI has a positive impact on growth in high‐ and middle‐income countries, but not in low‐income countries. With the existing absorptive capabilities, low‐income countries can benefit from both exports and imports, but not from FDI. These findings suggest that trade and FDI affect growth through different channels and under different conditions. The paper also discusses important policy implications.     

Determinants of China's bilateral trade balance in global value chains

This paper identifies the determinants of China's bilateral trade balance using a new measure based on international input–output data, the so-called ‘trade in value-added’ (TiVA), which can prevent double counting in the estimation of bilateral trade balance. Our results show that using a measure based on gross exports, rather than TiVA, causes relatively large overestimation of the impact of the RMB exchange rate on China's bilateral trade balance. This overestimation is mainly because that the increasing production of exports may require increasing intermediate imports as a consequence of international fragmentation of production in global value chains. In addition, our results also show that the impact of FDI inflows on China's bilateral trade balances depends on the position and role of China and its trading partners in GVCs.     

Reform and opening up in the new era: China trade policy review

This paper reviews the major changes in China's trade policies in the last few years. During this period, the adjustment of trade policies has developed in the following ways: first, the establishment of free trade zones, which emphasises the importance of advanced systems rather than preferential policies; second, putting forward the “Belt & Road” Initiative, which indicates China's new stage of development from “bringing in” to “going out”; third, holding import expos, which marks an era when China's foreign trade development has shifted from focusing on exports only to focusing on both exports and imports; fourth, reducing entry barriers of foreign capital, which demonstrates that the policy framework for FDI has gradually changed from a positive list to a negative list; fifth, promoting trade negotiations, which reflects that China has actively participated in bilateral, regional and multilateral trade talks; and finally, building up new experimental fields of reform and opening up, which shows evidence that a new generation of special economic zones is emerging.     

FDI,Trade, and Growth Dynamics: New Evidence from the Post-Reform India

This article has two aims: first, review the related literature on the relationship among Foreign Direct Investment (FDI), Trade, and Economic Growth, and second, empirically examine the linkage between these variables. Our review of the literature indicates that despite a large volume of literature on the relationship among these variables, the direction of causality among them is far from over. Therefore, after observing a gap in the empirical literature, especially for developing economies, we investigate the linkage by using a Vector Autoregression (VAR) model applying the Ganger non-causality test of Toda and Yamamoto (1995) for the period 1991Q3 to 2006Q3. The evidence shows that there is bidirectional causality (two-way feedback) between FDI and economic growth. At the same time, there is also a unidirectional causality exists between exports and FDI, which runs from the former to the latter. Results of the test of causality between FDI and imports indicate the presence of a two-way feedback relationship between the variables.     

Outward foreign investment and export structure: a case study of Taiwan's FDI in Malaysia

As Taiwan's outward FDI was primarily motivated by the relatively lower costs of land and labour in the host countries, one tends to expect that the structure of production and exports in Taiwan would shift toward higher capital and skill intensity. The structure of Taiwan's exports to the ASEAN-4 was concentrated more in higher human and physical capital intensities than Taiwan's total exports to the world. Moreover, Taiwan's exports to the ASEAN-4 were more concentrated on intermediate goods and machinery. A case study of Taiwan's outward FDI in Malaysia indicated that three of the five leading industries that accounted for a large shares of changes on FDI stocks and corresponding export commodities were the same. Pooling estimates also show that FDI has a small but positive impact on Taiwan's exports to the host country. The study further showed that Taiwan's FDI in Malaysia includes mixed tactics of ‘defensive’ and ‘aggressive’ strategies in various industries. In terms of the influence of the presence and economic role of ethnic Chinese on Taiwan's outward FDI, the study showed that the ‘Chinese connection’ has not been a significant factor in determining the industrial distribution of Taiwan's FDI in Malaysia.     

2018 WTO Trade Policy Review of Malaysia

This paper presents an academic analysis and review of the recently completed WTO Trade Policy Review (TPR) of Malaysia, 2018. This includes suggesting policies that can help to promote Malaysia's international competitiveness. We show that the sharp decline in commodity prices that started in 2014 contributed in narrowing Malaysia's trade balance and current account balance as a share of GDP. The faster decline of exports as a share of GDP compared to imports accounted for most of the substantial reduction. Further, the collapse of commodity prices was accompanied by a sharp depreciation of Ringgit Malaysia. We also show that Malaysia is losing international attractiveness in terms of FDI inflows relative to its economic size. This is evidenced by the downward trend in Malaysia's FDI performance index since 1992. Further, international tourism has fallen on average since 2014, due largely to a drop in tourist arrivals from Singapore. Policymakers should introduce policies to enhance international competitiveness, such as reforming the education system to produce skilled workers and reducing reliance on low‐skilled foreign workers.     

The effect of outward foreign direct investment on home country's export: A case study on Taiwan, 1989–2006

The purpose of this study is to examine the effect of outward foreign direct investment (FDI) on home country's export in Taiwan since the late 1980s. By pooling the time series and cross-section data in a modified gravity model, the study analyzes the effect of outward FDI, both country by country and host groups as a whole, on Taiwan's exports. It is concluded that outward FDI has a complementary effect on home country's export in Taiwan, most significantly evidenced in China-bound investment, which accounted for most FDIs after the 1990s.     

对外贸易、FDI与我国环境污染动态效应、区域差异

通过对我国1993-2006年间29个省市的对外贸易、FDI对环境污染的动态效应与区域差异分析,发现我国环境污染存在着显著的一阶滞后正向动态性,当期和滞后期出口加剧了环境污染,而进口则更大程度地抑制了环境污染,FDI却仅仅显示了对环境污染的滞后作用,同时也体现了环境污染的规模效应和技术效用;在三大地区中,东部地区的进口对环境污染有显著的抑制作用,而在中西部地区贸易与FDI对环境污染的影响并不显著。因此,需要因地制宜采取措施,促进自然、社会、经济的协调发展。