Institutional determinants of inward FDI: Evidence from Pakistan

FDI has been growing at a spectacular pace all over the world and emerging countries have been successful in attracting more FDI compared to developed countries. Institutional factors are becoming more important as determinants of inward FDI for emerging markets. However, research in this area is inadequate and also incosnsistent in terms of findings. In this paper, we have examined the institutional determinants of Pakistani FDI inflows and also examined the relative importance of those factors. The paper has found that certain institutional determinants such as size of the government, legal structure and strong property rights, freedom to trade and civil liberty have strong positive effect on FDI inflows. Among the institutional variables, regulation has been found to be most important to influence inward FDI flow to Pakistan. The paper has also found evidence that there was a structural break in FDI flows in Pakistan which coincides with market liberalization programme in early 1990s. This confirms the effectiveness of conducive institutional environment to attract foreign investment. Moreover, we have found that military government is more successful in attracting FDI compared to democratic government in Pakistan.     

Foreign Direct Investment Policy–Friendly Business Environment in R&D Sectors: Baltic States versus Visegrad Countries

This article examines the impact of foreign direct investment (FDI) policy on inward FDI in the Visegrad and Baltic countries. The analysis of business environment highlights that the countries in both regions attempt to create a friendly business environment by means of similar methods. However, the countries in both regions focus on fiscal incentives such as taxes, which do not play a major role in attracting inward FDI in R&D. The results of attracting FDI are better in the Visegrad countries, which implement financial incentives toward inward FDI along with fiscal incentives. According to empirical analysis, it is noticed that a higher intervention level and a higher support level guarantee the volume of inward FDI. The country's introduced FDI policy enables it to orient industry and to implement economic strategic targets. FDI policy does have an impact on promoting the development of the entire country.     

Foreign Direct Investment in Mexico and Chile

Summary

Increased flows of Foreign Direct Investment (FDI) are a major source of capital for Latin American countries. This paper analyzes the experiences with attracting and the effects of FDI for two nations-Chile and Mexico. Clearly attempts to attract FDI through relaxed restrictions on profit remittances and other reforms have had an impact. However, while Mexico has succeeded in attracting investment to high productivity “greenfield” industries, Chile has seen most FDI go towards low productivity sectors such as mining and agriculture.     

Foreign Direct Investment in Ireland: Policy Implications for Emerging Economies

Ireland's success in attracting foreign direct investment (FDI) provides guidance for emerging economies. The key to Ireland's success is its consistency of policy towards FDI. Ireland's success suggests that emerging countries should be proactive in seeking FDI, offer a package of incentives that is enterprise‐centred yet is sufficiently selective to build self‐sustaining clusters. Policy consistency is important to inward investors and this can be traded off against selectivity and monitoring of performance.     

Does quality of innovation,culture and governance drive FDI?: Evidence from emerging markets

This study examines how technology, culture and corporate governance drive inward FDI in emerging economies. A study of 22 emerging economies shows that technology is the major attractive factor influencing inward FDI. Further, FDI increases as technology absorption and innovation capacity increase. The greater the quality of country governance, the greater the influence of corporate governance on FDI. Cultural dimensions such as individualism, masculinity and uncertainty avoidance exhibit a weaker influence on inward FDI, while power distance and indulgence have a stronger influence on inward FDI. Our results support the leapfrogging approach of emerging economies towards promoting innovation and enhancing technology adoption to drive FDI. Interaction effect of country governance further highlighted that the better the governance of a country the impact of technology, innovation, corporate governance and culture in attracting inward FDI also increases.     

local industrial systems and the location of FDI in Italy

This article investigates the determinants of foreign direct investment (FDI) location across Italian provinces. Specifically it examines the relationship between industry‐specific local industrial systems and the location of inward FDI. This extends previous analysis beyond the mere density of activity, to illustrate the importance of the specific nature of agglomerations in attracting inward investment. The article develops a model of FDI location choice using a unique FDI database stratified by industry and province. The results also suggest that the importance of agglomeration differs between industries, and offers some explanation for this.     

韩国引进外商直接投资政策的变迁及其对我国的启示

韩国引进外商直接投资政策经历了从消极到积极的转变。本文系统介绍了韩国外商直接投资政策的变化及其成效,分析了韩国外商直接投资的结构及其机构,总结了韩国吸引外商直接投资对我国吸引外商直接投资的启示。     

To What Extent Can Foreign Direct Investment Help Achieve International Development Goals?

For FDI to help alleviate absolute poverty and stimulate economic growth in developing countries, two conditions have to be met. First, developing countries need to be attractive to foreign investors. Second, the host‐country environment in which foreign investors operate must be conducive to favourable FDI effects with regard to overall investment, economic spillovers and income growth. This paper argues that it is more difficult to benefit from FDI than to attract FDI. The widely perceived concentration of FDI in few developing countries tends to obscure that, in relative terms, various small and poor countries are fairly attractive to FDI. Yet, the mobilisation of domestic resources remains by far, more important than attracting FDI for financing investment and stimulating economic growth. Furthermore, high inward FDI is no guarantee for poverty alleviation and positive growth effects. In particular, the empirical evidence suggests that host‐country conditions typically prevailing in poor countries, including weak institutions and an insufficient endowment of complementary factors of production, constrain the growth‐enhancing and poverty‐alleviating effects of FDI. The crux is that creating an environment in which FDI may deliver social returns will take considerable time exactly where development needs are most pressing.     

On the Irrelevance of Mercosur: Evidence From Foreign Direct Investment

ABSTRACT

This article utilizes data from more than 100 countries over 30 years to identify the key factors that make a country more attractive to foreign direct investment (FDI). We find evidence that a country's potential marginal returns to capital, available infrastructure, degree of trade openness, labor force qualification, and macroeconomic stability have a positive impact on FDI inflows. Our estimates capture a change in the role played by trade protection and an increase in the importance of human capital as globalization progressed. An application of our models illustrates why Mercosur countries have underperformed their peers in attracting FDI.     

Do bilateral investment treaties attract foreign direct investment? The role of international dispute settlement provisions

This paper studies the effects of the strength of bilateral investment treaties (BITs) on foreign direct investment (FDI) activity. We develop an index for the strength of international dispute settlement provisions included in BITs in order to examine the role the content of BITs plays in attracting FDI. To this end, we make use of data from UNCTAD's International Investment Agreement Mapping Project and measure the provision strength of 2,571 BITs. Using panel data of bilateral and total FDI inflows and inward FDI stocks, we study the effect of BITs on FDI. Our main finding indicates that stronger international dispute settlement provisions in BITs are indeed associated with positive effects on FDI activity.     

Foreign Direct Investment in Latin America in the 1990s

Summary

FDI in Latin America has witnessed a resurgence in the 1990s after the debt crisis and capital drought of the 1980s. This inflow results both from more market-friendly policies in the recipient countries and lower returns and growth in developed nations. The latter factor has also attracted many short-term, portfolio instruments to the continent which can be highly damaging to local economies when not properly regulated. Privatization has been among the more important country-specific variables attracting direct investors to the region. Despite the positive effects of FDI, Latin American countries are still beset with problems such as unequal distribution of income and poverty that direct investment is unlikely to ameliorate.     

How do country regulations and business environment impact foreign direct investment (FDI) inflows?

How do multinationals choose which countries to invest in? This study addresses the essential question of the impact of regulatory variables in attracting or deterring foreign direct investment (FDI). We separate regulatory variables based on different stages of a firm’s life-cycle. Using World Bank data for 189 economies, we examine which host country regulatory factors influence inward FDI. We find that countries with stronger contract enforcement and more efficient international trade regulations attract more FDI. The interaction terms suggest that multinational companies are willing to trade-off a country's poorer institutional variable in return for another where the institutional variable is stronger. For example, multinationals are willing to invest in countries with less efficient entry and exit regulations in exchange for stronger contract enforcement. These results also have important implications for government policy reform.     

The Role of Local Agglomeration Economies and Regional Characteristics in Attracting FDI: Italian Evidence

The objective of this paper is to test for the importance of local agglomeration externalities in determining inward foreign direct investment (FDI) intensity, viewed as a measure of regional attractiveness to FDI. The links between the degree of FDI inflow penetration into Italy and its determinants at the regional level are examined using alternative fixed effects panel data model specifications, also extended to include spatial effects. It is found that sectoral and regional specificities are relevant in attracting inward FDI into Italy and the different effects of intra‐sector and inter‐sector spillovers can be distinguished. There is also evidence that the importance of agglomeration spillovers connected to the geographical distance varies across regions, indicating both substitution and complementarity effects from FDI inflows into neighboring regions.     

Innovation,productivity and foreign direct investment-induced R&D spillovers

This article examines the effect of foreign direct investment on innovation and productivity in the host and home countries. I investigate how the flows of knowledge transmitted through FDI affect the production of knowledge in both source and recipient countries, as well as how these flows affect productivity. Using patent citations within FDI as the measure of the degree of ‘access’ that one nation gains to the R&D knowledge of another, and new patents as the measure of innovation, results reveal that there are large differences in the way FDI affects innovation and productivity between countries that are technological leaders, and technological followers. Both inward and outward FDI are found to have a strong positive effect on domestic innovation and productivity in countries that are technological followers. For technological leaders, outward FDI is highly conducive to increased domestic innovation, while inward FDI seems to increase competition between domestic and foreign firms, making it more difficult to come up with new viable ideas. As for domestic productivity, inward FDI is highly beneficial for technological leaders, while outward FDI does not have a significant effect. I conclude that technological followers have much to gain from FDI-induced R&D spillovers, and therefore governments in these countries will find it worthwhile to attract foreign multinationals, while those in the more technologically advanced economies need to weigh the costs and benefits of FDI carefully.     

Bulgaria's Inward FDI and EU Accession

Bulgaria's extraordinary openness performance in terms of international trade and inward foreign direct investment (FDI) volumes has not been affected by both the country's failure to reach the levels of structural transformation and technological upgrading achieved by Central and Eastern Europe member states and by the failure to comply with European Union (EU) law within certain time frames. Although a substantial literature has evolved on the country's inward FDI due to this performance, empirical microeconomic studies explore the time frame up to EU accession. This study focuses on the effect of EU accession in order to revisit Bulgaria's primary inward FDI determinants via a meso-economic panel analysis of disaggregated data by industry. The findings indicate the neglected importance of extra-EU exports as a driver of Bulgaria's inward FDI and the appropriateness of micro-/meso-approaches to the subject.     

In search of spatial interdependence of US outbound FDI in the MENA region

The paper investigates the spatial interdependence of US MNE investments in the MENA region. Given the variations in resource endowments, governance structures and degree of infrastructure availability in MENA countries, one would expect these variables to affect an MNE 's choice of FDI location. We do find that domestic non‐spatial factors such as own country inflation and governance measured by bureaucratic quality as well as infrastructure affect a host country's inward FDI . We also found that only one measure of natural resource endowment; that is, oil and gas exports were instrumental in attracting FDI . This non‐spatial result is generally robust and invariant to the two methodologies employed in this study, that is the spatially autoregressive (SAR ) model and the spatial Durbin model (SDM ). We found that neighbouring countries’ infrastructure availability measured either by “electricity used” or “energy used” affected FDI inflows in a host country. However, this spatial impact was found only in the SDM model. The spatial effects of neighbouring countries’ economic and political conditions and resource endowments were, however, not observed on a host country's inward FDI . The insignificance of both the surrounding market potential and the spatially weighted FDI suggests a purely horizontal motive of MNE investments in the MENA region.     

外商来华直接投资(FDI)的效应分析

中国对外资进入一直实行名目繁多的优惠政策 ,但外资进入带来的效应是复杂的 ,外资进入带来的效应有正有负并且是动态的 ,在分析正负效应及其发生的特点的基础上 ,提出了促进正效应 ,克服负效应的措施 ,并指出今后的政策取向是基于内生式经济发展的与时俱进的外资引入政策。     

国际直接投资的就业结构效应研究——基于东道国视角

国际直接投资引起了世界各国经济和社会的变革,其中一个重要的方面就是对各国国内就业的影响和冲击。本文以东道国为视角,通过理论模型和计量分析两种方法,重点研究FDI对东道国国内就业结构的影响。研究表明,FDI对东道国就业结构具有深刻影响,这种影响取决于各部门所占的劳动比例、各部门中劳动生产率对劳动的弹性以及FDI在各部门中所占的比例;FDI对中国就业结构优化有着积极的促进作用。     

Friend or Foe? On the role of institutional reforms in the investment development path of Central and East European economies

Many existing studies on emerging markets and firms have concentrated on the separate effects of institutional reforms and quality of the institutional infrastructure for attracting inward foreign direct investment (FDI) and fostering outward FDI. We argue that both these perspectives should be considered in an interplay, as there are links between inward and outward FDI in a country's economic development, which is captured by the investment development path (IDP) concept. Moreover, while predominant attention has been paid to emerging markets, little has so far been done to evaluate the sustainability of the institutional development, including later post-transition stages. We extend the IDP with insights from the institutional theory and conduct a comparative analysis of the effects of institutional reforms on IDP paths of ten Central and Eastern European (CEE) post-communist European Union (EU)-members. We find that while most of the studied post-transition economies follow a quadratic relationship between the net outward investment (NOI) position and each country's economic development, the role of institutional reforms is not in all cases accelerating the movement through the stages of the IDP. We attempt to explain the ambiguous role of institutions in an ensuing detailed discussion of the investigated countries.     

加入WTO后我国招商引资的战略与组织文化研究

我国招商引资工作中必须考虑内部资源、能力、外部环境等,从“招商引资战略”和“招商文化”的概念,可以了解到无形资源(如招商品牌、招商文化、招商引资人员素质、组织的管理能力等)是形成招商引资的核心竞争力与竞争优势的主要因素,招商文化是各地区招商引资组织通过长期的学习、积累,在特定历史条件下形成的无形资源,不容易为竞争者所理解、模仿或替代,可以形成独特的、可持续的招商引资竞争优势。我国目前招商引资应采用差异化战略为主,成本导向战略为辅的做法,才能有效地避免各地区之间的恶性竞争。