Foreign Direct Investment and Trade: A Causality Analysis

In this article, we analyze the relationship between outward foreign direct investment (FDI) and exports, using Spanish quarterly data for the period 1977–1998, by means of Granger causality tests in a cointegration framework. Our results point to the existence of a relationship of complementarity between both variables, with Granger causality running in the short run from outward FDI to exports, and bilateral Granger causality in the long run.     

外商来华直接投资与中国企业对外投资的差异分析

中国的"引进来"和"走出去"是发展失衡还是渐趋平衡?本文从投资规模、投资产业、投资形式和投资政策四个方面进行了分析。     

外国直接投资、外国证券投资与经济增长:以中国为

文章以中国1982-2005年的统计数据为例,通过建立格兰杰因果关系检验模型以及Johansen协整关系检验模型,对中国FDI、FPI和经济增长之间的短期关系和长期关系分别进行了实证研究,并在此基础上得出相关结论和建议.     

Taxation and Foreign Direct Investment Inflows: Time Series Evidence from the US

Abstract

This study investigates long run and short run relationships between the corporate income tax rate and foreign direct investment (FDI) inflows to the US. The tax rate is found to exert a significant negative effect on total FDI and transfer fund inflows in the long run. A 1% decrease in the tax rate would increase total FDI by 2.4% and transfer funds by 4.2%. Collectively, results suggest that the US can use tax policies to attract FDI from abroad. Concern over the possibility of tax competition among countries to attract foreign capital is warranted.     

Outward Foreign Direct Investment and Economic Growth: Evidence from Japan

Abstract

This article aims at analysing the role of foreign direct investment (FDI) outflows in economic performance and the impact of economic growth on outward FDI with the data from Japan. Bivariate and multivariate Granger causality frameworks have been used in this study. The results suggest that the conclusion of bivariate framework may not be valid because it allows omission of important variables. The results of the multivariate framework show that there is a long-run positive unidirectional causality from outward FDI to gross domestic product (GDP) per capita. In the short-run, both per capita income and outward FDI do not allow Granger causality.     

The Determinants of Foreign Direct Investment in Malaysia: A Revisit

Abstract

The paper re-examines the determinants of foreign direct investment (FDI) in Malaysia, for the period 1970–2006. The cointegration results show that market size of both Malaysia and China have major, and a statistically significant impact, on FDI inflow to Malaysia. The results seem to support the argument that foreign investors tend to be more attracted to the country with a higher growth rate of gross domestic product (GDP) because it indicates a larger potential demand for their products. In addition, the results also demonstrate that openness level of the country has a positive and statistically significant effect on FDI inflow, which supports the hypothesis that FDI can be attracted to a country with more liberalized economic reforms. Finally, the results show that literacy rate (human capital development) has significant positive effect on FDI inflow. The finding suggests the need for labor force expansion and education policy to raise the stock of human capital in the country. Using Granger causality test, we also find that there exist unidirectional causality from real GDP of both Malaysia and China, degree of openness and literacy rate to FDI inflow.     

Foreign Direct Investment and Trade Openness in Sub‐Saharan Economies: A Panel Data Granger Causality Analysis

This study uses annual balanced panel data for 25 sub‐Saharan African economies over the period 1977‐2009 to investigate the Granger causality relationship between trade openness and foreign direct investment (FDI) for the region. We took advantage of recent developments in econometric testing techniques for Granger noncausality heterogeneous panels that takes into consideration the effects of cross section dependence across the units of the panel data set to analyse the trade–FDI nexus in the region. The empirical result of this study reveals a bidirectional causal relationship between trade openness and foreign direct investment in sub‐Saharan economies. Concurrently, African countries should devote more emphasis for the promotion and attraction of FDI in order to expand their productive capacity to produce and export; in this way, by addressing supply‐side constraints, FDI will have positive multiplier effects on trade.     

Impact of Foreign Bank Presence on Foreign Direct Investment in China

We analyze the impact of foreign bank presence on foreign direct investment (FDI) in China. The connection between the two could be particularly relevant for an emerging economy like China because the supply of financial services provided by banks may act as a constraining factor. Foreign bank presence may then enable and foster FDI and not simply result from it. Our estimates demonstrate that FDI across regions in China is increasing in the existing network of regional branches of foreign banks, which itself is driven (and, therefore, instrumented) by the timing of the regional phasing out of the local limits for foreign banks on local currency business. The effect of foreign bank presence on FDI is particularly strong for some specific sectors (farming, manufacturing, construction, transportation, wholesale/retail trade and real estate) if those sectors are strongly represented in the source economies.     

当前我国企业发展境外直接投资的战略思考

随着我国“走出去”战略的实施和发展,近年来我国境外直接投资呈现快速增长态势。2008年由于受全球金融危机的影响,我国境外直接投资流量有所下降,这让我国在迎接机遇的同时也体验了风险和考验,但无论如何都不容我国选择逃避与沉默。面对动荡的国际市场,我国必须以积极的姿态,从容睿智地迎接挑战,谋求更大发展。     

Spatial Spillovers from Foreign Direct Investment: Evidence from the Yangtze River Delta in China

This paper examines the spatial externality from foreign direct investment on domestic firms. Using Chinese firm‐level data for 2004, and after accounting for an endogeneity problem, we find that foreign firms generate a significantly positive spillover effect on the regional productivity of domestic firms in similar counties and industries. Estimating a spatial‐autoregressive model, we further show that such local spillovers could transmit to domestic firms in other counties and industries through interactions among domestic firms. However, these spatial multiplier effects decline with distance, thereby reducing the foreign direct investment spillover effects for domestic firms in distant locations.     

Impact of Foreign Direct Investment and Export on Urbanization: Evidence from China

This paper investigates the impact of foreign direct investment (FDI) and exports on urbanization in China. Using prefecture city‐level panel data covering China's 262 prefecture cities for the period 2004–2013 and employing a dynamic panel system generalized method of moments model with instrumental variable regression techniques, our study finds that FDI and exports have, on average, played a significantly positive role in China's urbanization. However, the impacts of FDI and exports on urbanization vary across regions. FDI has a positive and significant impact on urbanization in the coastal region but has no impact on urbanization in the inland region. Exports have a positive and significant impact on urbanization in both the coastal and inland regions, but the effect is much larger in the coastal region than in the inland region. The results imply that further attracting FDI inflows and promoting exports will contribute to China's urbanization, especially for the inland region.     

Has China Crowded out Foreign Direct Investment from Its Developing East Asian Neighbors？

This paper applies a gravity model to investigate the determinants of foreign direct investment (FDI) in East Asia. Economic fundamentals, such as market size, per capita income and country risk indicators, economic and cultural ties, exchange rate volatilities and information asymmetry are found to be important determinants for FDI. Globally, the inward FDI among high-income OECD economies declined significantly on average over the period of 1990-2003, whereas the inward FDI of the high-income OECD economies in emerging market economies gained substantially. In the East Asian region, the ASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand) received above-average inward FDI from the high-income OECD economies after controlling for their economic fundamentals. By contrast, China's FDI from the high-income OECD economies is below average relative to its economic fundamentals. Therefore, it is difficult to establish that China has crowded out FDI from its developing ASEAN neighbors.     

日本对华直接投资对中日贸易的影响

20世纪90年代以来，日本对华直接投资中对制造业投资的比重不断提高，因而其对中日贸易关系的影响也越来越大。日本对华直接投资对中日贸易规模的影响主要通过替代效应、诱发效应、逆出口效应、贸易转向效应表现出来。总体说来，日本对华直接投资对中日贸易的替代效应很小，而对中日贸易发展的推动作用则非常明显．日本对华直接投资对中日贸易商品结构也产生了极为重要的影响，具体表现为日本对华出口的工业制成品的比重不断降低，而各种关键零部件和生产设备的比重不断提高：中国对日出口中工业品的比重、特别是工业制成品的比重则逐步提高。     

Dynamic Relationships between Exchange Rates and Foreign Direct Investment: Empirical Evidence from Korea

This paper examines the short‐run and long‐run dynamic relationships between exchange rates and foreign direct investment (FDI) in Korea. Monthly data retrieved from the Bank of Korea from January 1999 to March 2012 are examined. A cointegration test, a vector error correction model, the Wald test and impulse responses techniques are applied to analyze the data. The present study finds that, first, long‐run causation between exchange rates and FDI flows exists, which implies that a change in exchange rates negatively affects FDI flows in the long run. Second, short‐run causation between exchange rates and FDI flows exists, which confirms that there is reciprocal feedback between the two variables. Finally, the study finds evidence of a structural break from the global financial crisis of 2007–2009 shock to FDI flows in Korea. An external shock affects changes in the endogenous variables and, thus, causes instability in the cointegrating vector in the system.