Foreign direct investment: A strategic move toward sustainable free enterprise and economic development in Saudi Arabia

Foreign direct investment (FDI) has been viewed in many circles as one of the key drivers for economic development. Irrespective of their ideological differences, most countries around the world have been competing to attract FDI. China, for example, is a country formally characterized by communist ideology. It has been highly proactive in formulating policies amenable to FDI so much so that in 2003, China overtook the United States as the biggest recipient of FDI, having attracted U.S. $53 billion from Organisation for Economic Co‐operation and Development (OECD) countries and elsewhere. In this article, an attempt is made to critically examine aspects of FDI, especially with reference to economic development in Saudi Arabia. The research study in this article reports new research findings based on a survey of Saudi managers/enterprises that highlight the current status of FDI in the Kingdom of Saudi Arabia. In particular, the study finds that while Saudi managers generally welcome FDI into the country, at the same time, they do retain ambivalent attitudes toward its perceived benefits.     

Trade and Exchange Rate Policies in Formerly Centrally Planned Economies

This paper examines the international economic policies of the eastern European and Soviet Successes States in the early 1990s which provide one of those wide‐open windows of opportunity when powerful vested interests are not lobbying for retention of an existing tariff structure. Moreover, the simultaneous abandonment of central planning by over two dozen countries provided a natural experiment in which a range of differing policies might have been pursued. Policymakers in transition economies have generally ended up pursuing liberal non‐discriminatory trade and foreign exchange policies. There are exceptions and the majority may be wrong, but the presumption is that, perhaps after a learning or trial‐and‐error process, decision makers have found the rules of thumb suggested by economists to be their best guide to international economic policy. This paper notes that integration of transition economies into the global trading system has been surprisingly successful. Almost all the countries in transition from central planning have accepted the WTO rule‐based system in principle, even if there are variations in trade policies and performance, and have generally pursued multilateral non‐discriminatory trade policies. In particular, the potential danger of regionalism proving more attractive than multilateralism has not eventuated. The revealed behaviour of policymakers suggests that trade liberalisation is a good rule of thumb and regional groupings among transition economies have been insignificant. Despite a proliferation of new currencies, varying exchange rate regimes, and differing degrees of currency convertibility, the general pattern has been to accept convertibility for current account transdactions, and in many cases to extend this to a de jure commitment and to allow substantial capital account convertibility. A general policy conclusion in favour of more open and non‐discriminatory trade and exchange policies have passed the test of acceptability by policymakers in over two‐dozen countries in this category.     

Developing Countries in the WTO System: Applying Robert Hudec's Analysis to the Doha Round

In his 1987 Developing Countries in the GATT System, Robert Hudec concluded that the identity of developing countries in the GATT system was primarily a matter of their demanding non‐reciprocal and preferential treatment, developed countries responding grudgingly to those demands and that this situation had been unfruitful either to support developing country reforms or to discipline developed country restrictions aimed at developing countries. Hudec was pessimistic about the relationship becoming more productive, but his expression of despair offered a glimmer of hope: ‘There are those who believe that the GATT has become so committed to the current policy that the only way to change it would be to start a new organization’. A new organisation was started, the World Trade Organization, but has the WTO achieved what Hudec hoped a new organisation might? At the 1987–95 Uruguay Round, developing country leaders acted as Hudec had hoped. They used international rules and bindings as leverage to support their own internally‐driven reforms; to overcome generations of accumulated protection, to lock in reforms against the backsliding that had undone previous reforms. Dealing with the Uruguay Round's ‘unbalanced outcome’ and the overlapping ‘implementation problem’ have shaped the Doha Round, but the negotiations have misconceived and mismanaged both issues. Rather than seeking to identify their real economics, the negotiations have gone back to the traditional idea of special and differential treatment. Perhaps the largest cost of this mismanagement is that in many developing countries the unilateral momentum for liberalisation has waned. To the extent that the Doha negotiations have drawn attention away from the domestic issues that were the basis of developing country liberalisation – and enhanced the status of negotiators relative to the leaders who fought at home for reform – they have contributed to that waning.     

Export Credit Guarantees and Export Performance: An Empirical Analysis for Germany

Recent literature finds that exporters are particularly vulnerable to financial market frictions. As a consequence, exports may be lower than their efficient levels. For this reason, many countries support exporters by underwriting export credit guarantees. The empirical evidence on the effects of those policies is, however, very limited. In this paper, we use sectoral data on export credit guarantees issued by the German government. We investigate whether those guarantees indeed do increase exports and whether they remedy the export‐restricting effect of credit market imperfections both on the sectoral and on the export‐market levels. Exploiting the sectoral structure of a rich three‐way panel data set of German exports, we control for unobserved heterogeneity on the country‐year, sector‐year and country‐sector dimensions. We document a robust export‐increasing effect of guarantees. There is some evidence that the effect is larger for export markets with poor financial institutions and in sectors that rely more on external finance.     

Labour Migration and Economic Growth in East and South‐East Asia

East and South‐East Asia will face major demographic changes over the next few decades with many countries’ labour forces starting to decline, while others experience higher labour force growth as populations and/or participation rates increase. A well‐managed labour migration strategy presents itself as a mechanism for ameliorating the impending labour shortages in some East Asia–Pacific countries, while providing an opportunity for other countries with excess labour to provide migrant workers who will contribute to the development of the home country through greater remittance flows. This paper examines such migration policy options using a global dynamic economic simulation approach and finds that allowing migrants to respond to the major demographic changes occurring in Asia over the next 50 years would be beneficial to most economies in the region in terms of real incomes and real GDP over the 2007–50 period. Such a policy could deeply affect the net migration position of a country. Countries that were net recipients under current migration policies might become net senders under the more liberal policy regime.     

自由贸易及跨界污染背景下的国际环境政策协调

文章构建了一个考虑跨界污染损害的福利函数,推导出自由贸易背景下某国的最优污染税,并与世界福利最大化时的最优污染税进行比较,以说明国家间环境政策协调的必要性。文章考虑了四种情况,分析结果表明,只有在该国为小国且污染不跨界时不需要国际协调;当该国为大国或者污染跨界时,单个国家的独立行为通常不会产生合意的世界福利水平,此时需要国际协调以实现世界福利最大化。大国的污染政策具有贸易条件效应,因而出口国有设定过高污染税的激励,而进口国则会设定过低的污染税,双方都寻求转变贸易条件以有利于本方。而污染跨界时单个国家通常会有"搭便车"的激励,此时会实施较为宽松的环境政策。     

以税收优惠政策助推高新技术企业发展

以税收优惠政策助推高新技术企业发展是世界各国的共同经验。我国应借鉴其它国家和地区的经验，加大对高新技术企业的税收扶持力度，促进我国高新技术企业的发展。     

Foreign Direct Investment in Africa: The Role of Natural Resources,Market Size,Government Policy,Institutions and Political Instability

Data from several investor surveys suggest that macroeconomic instability, investment restrictions, corruption and political instability have a negative impact on foreign direct investment (FDI) to Africa. However, the relationship between FDI and these country characteristics has not been studied. This paper uses panel data for 22 countries over the period 1984–2000 to examine the impact of natural resources, market size, government policies, political instability and the quality of the host country's institutions on FDI. It also analyses the importance of natural resources and market size vis‐à‐vis government policy and the host country's institutions in directing FDI flows. The main result is that natural resources and large markets promote FDI. However, lower inflation, good infrastructure, an educated population, openness to FDI, less corruption, political stability and a reliable legal system have a similar effect. A benchmark specification shows that a decline in the corruption from the level of Nigeria to that of South Africa has the same positive effect on FDI as increasing the share of fuels and minerals in total exports by about 35 per cent. These results suggest that countries that are small or lack natural resources can attract FDI by improving their institutions and policy environment.     

Exchange Rates and Competition for FDI in Asia

This paper argues that relative exchange rates between the host countries of foreign direct investment affect their competition for FDI. Specifically, if the host country currency appreciates against the source country's currency more than that of its rival, FDI inflows of the host country will decrease, while FDI inflows increase in the rival country. Using the data of Japanese FDI in nine Asian manufacturing sectors from 1981 to 2002, the paper examines the hypothesis in the context of the competition between China and ASEAN‐4 (Indonesia, Malaysia, the Philippines and Thailand). Empirical results show that the relative exchange rate is a statistically significant factor that determines the relative inflows of Japanese FDI for manufacturing as a whole, and for such sub‐sectors as textiles, food, electronics, transportation equipment, and others. Exchange rate policies of China and ASEAN‐4 played a critical role in dynamically reshaping the geographic distribution of Japanese FDI in Asia.     

Sustainability marketing at the farmers’ market: An ethnographic analysis of ambiguous communication

Farmers’ markets have grown rapidly in recent decades. One explanation for this growth relates to consumers’ view that farmers’ market products are more sustainable. While many have analyzed customer preferences at farmers’ markets, few have examined farmers’ message strategies in this space. Little has been done to analyze the ways farmers use sustainability as a marketing approach. This ethnographic research is based on 100 hr of observation and in‐depth interviews with 36 participants and analyzes the ways farmers position their products as sustainable to customers. The findings indicate that sustainability is not a primary topic of conversation during customerfarmer interaction. However, related concepts such as environment, local, organic, and chemical serve as the proxies for sustainability, even though these messages are presented ambiguously.     

Who in Brazil Will Gain from Global Trade Reforms?

The potential impacts of multilateral trade liberalisation on developing countries are the subject of numerous controversies. One particular concern is that Brazil, a major agricultural exporter and a country with one of the world's most unequal income distributions, will reap a substantial share of the potential benefits to developing countries from agricultural trade reform, and that most of those benefits will go to large‐scale commercial farmers rather than to the country's smallholders. This claim is explored via a global general equilibrium model and a national model of Brazil containing multiple agricultural and non‐agricultural households. Brazil is found to account for nearly one‐half of all the benefits to developing countries deriving from global agricultural trade reform. These gains are associated with improvements in the welfare of each group and a lower incidence of poverty. Large‐scale producers gain more than smallholders as they tend to be relatively specialised in export products, but there are important gains to agricultural employees, who are relatively poor, and to urban households, who benefit from the expansion of the agro‐food sector. Overall, there is no discernible impact on income inequality, and no evidence that the gains to commercial farmers occur at the expense of poorer households.     

Effects of aid for trade on extensive and intensive margins of greenfield FDI

Using a panel dataset of 105 developing countries for the period 2003–15, this paper assesses the effects of Aid for Trade (AfT) on greenfield FDI flows to the aid‐recipient countries. Particularly, this paper classifies the total dollar value of greenfield FDI flows to each recipient country in terms of four different layers: the extensive and intensive margins of projects as well as the extensive and intensive margins of source countries. Applying the system GMM estimator, this paper finds that AfT not only increases the dollar value of FDI flows to the recipient countries but also helps diversify the greenfield projects and source countries. In addition, this paper finds that AfT has a greater effect for greenfield FDI from donor (developed) countries than from non‐donor (developing) countries. Among the three components of AfT, aid for trade‐related infrastructure and aid for trade policy regulations are found to have positive links with greenfield FDI, irrespective of source‐country groups, yet their effects are larger for developed source countries. In contrast, aid for building productive capacity hinders greenfield FDI flows from non‐donor countries, while it promotes greenfield FDI from donor countries. We offer some explanations for this finding.     

A review of national policies and programs to prevent unintentional injuries in the Americas

Injuries are a global public health problem, with injury mortality increasing in many regions. We describe a survey of injury policies and programs in 23 countries in the Americas. Most countries surveyed (87%) perceived unintentional injuries to be a significant public health problem. When asked about actual policy agendas, however, just one-fourth (26%) of the countries ranked unintentional injuries among policy makers’ top five concerns. Approximately half of the countries reported having a national injury prevention strategy, injury prevention coordinator, or consultative group. Virtually all countries with national strategies and consultative groups had established them in the 1990s, suggesting that concern about injuries is both recent and growing. Three-fourths (74%) reported that their country had a surveillance system to monitor injury-related mortality and, to a lesser extent, morbidity. The study’s results suggest that most policies and programs for the prevention and control of unintentional injuries have been developed in the past 10 years, and primarily address motor vehicle injuries. It is essential that current efforts be both broadened and strengthened so that the societal burden of unintentional injuries in the Americas can be reduced.     

Short‐run Strategies for Attracting Foreign Direct Investment

This paper empirically investigates the effectiveness and feasibility of two FDI policies, fiscal incentives and deregulation, aimed at improving the attractiveness of a country in the short run. Using disaggregated data on sales by US MNEs’ foreign affiliates in 43 developed and developing countries over the 1982–94 period, results show that the provision of fiscal incentives or the deregulation of the labour market would exert a positive impact on total FDI. Given the drawbacks frequently associated with the use of incentive packages, economy‐wide policies which ease firing procedures and reduce severance payments would certainly be the best policy option. This paper also highlights the different aggregation and omitted variable biases that have affected results of previous studies and provides some support to recent theoretical models of FDI by showing that third‐country effects and spatial interdependence influence respectively the location of export‐platform FDI and vertical FDI.     

Redistribution in a Neo‐Kaleckian Two‐country Model

We investigate the interaction between demand‐driven growth and income distribution in open economies, by combining expenditure‐switching and demand spillover effects in a neo‐Kaleckian two country model. First, we specify elasticities of wage share and real exchange rate to the money wage relative to labor productivity, in order to precisely describe the distributive pass‐through from money wages to the labor share and the real exchange rate. Second, we analyze the demand effects of an increase in the money wage for given labor productivity (a redistribution towards labor) in both Home and Foreign country, as well as globally. We derive closed form results for two identical countries. These results indicate that redistribution towards labor at Home: (i) always increases growth globally if Home is wage‐led, but can lead to lower growth at Home relative to Foreign; and (ii) will always imply lower growth at Home relative to Foreign if Home is profit‐led, but can still be growth‐enhancing at Home. Thus, to the extent that countries are concerned with their relative economic performance, a fallacy of composition can emerge. Numerical simulations suggest that these fallacies could indeed occur. As a consequence, ‘returns to coordination’ over international labor policies might be substantial.     

Global talent management: Shaping the careers of internationally educated talents in developing markets

In the context of globalization, country‐level actions to manage global talent (e.g., development of immigrant‐friendly policies, policies to attract back skilled diaspora, or investment in the international education of youth) have been underresearched. The aim of this article is to analyze the impact of a country‐level global talent management practice on the careers and career success of its talents in the Republic of Kazakhstan, a developing country in Central Asia. Using qualitative methods, this study introduces new dimensions of career success evaluation for internationally educated talents in developing markets: use of knowledge acquired abroad and international aspect of the job. Based on these dimensions, it develops a model of career types. The career types predict the varying degrees of talents' career success and their involvement in sharing and capitalizing on knowledge, ideas, and international experience, which may have an impact on society. The study contributes to the field of global talent management and career success by providing empirical evidence on an underresearched topic in the underresearched context of developing markets.     

The Trade Effects of the EU–Turkey Customs Union

In the present study we argue that the salient features of both the EU‐15 countries and Turkey are conducive to making the effects of the 1995 EU–Turkey customs union asymmetric among the incumbent EU countries. In order to support our argument we rely on a model in which trade involves the exchange of vertically differentiated products. This model generates the prediction that the more contiguous an incumbent country is to the joining country in terms of technological sophistication, the larger will be the crowding out of this country's exports to the other incumbent countries as a result of the CU expansion. Using a gravity model we estimate the effects of the customs union between Turkey and the EU‐15 by differentiating between exports from (a) lower‐technology EU‐15 countries (we term this group of countries ‘South’) to higher‐technology EU‐15 countries (the ‘North’), (b) North to South, (c) South to Turkey, (d) North to Turkey, and (e) Turkey to EU‐15. Our econometric results indicate that, in contrast to North's exports to the other EU‐15 countries (which have remained intact), the Southern countries’ exports to the other EU‐15 countries have declined as a result of the CU. Moreover, the extra penetration of the Turkish market by the EU‐15 countries has not been more favourable to the Southern group.     

Liberalisation and Protection under Overlapping Free Trade Agreements: Dynamic Interplay between Free Trade Agreements and Investment

Two decades into the most recent wave of regionalism many of its implications remain to be fully understood. A vast literature has explored the impacts of free trade agreements (FTAs) on investment flows, but less attention has been given to how existing patterns of investment alter FTA liberalisation. It is contended here that the dynamic interplay between overlapping FTA areas and the investment sunk in them shapes governments' and firms' positions regarding further FTA liberalisation. During trade negotiations, a country may decide to exclude a sector from FTA liberalisation to prevent (concession prevention) future FTA partners from making similar demands. Concession prevention could also occur when a foreign firm, holding a dominant market position in a host country, relinquishes liberalisation demands in an FTA between host and home countries to prevent its current position being eroded if the host country grants similar (or better) concessions to competing firms from other countries in future FTAs. Conversely, investment sunk into a country's sensitive sector in the territory of partners from previous FTAs could pre‐empt (concession pre‐emption) the protectionist position of that country when it subsequently negotiates FTAs with the investment‐source countries. These arguments were tested in the negotiations around the liberalisation of the automotive industry that Thailand and Malaysia had with Japan in their respective bilateral FTAs. The distinct interaction between investment and the FTAs in which these countries participate resulted either in entrenchment of protectionism in the sector or its liberalisation across subsequent FTAs.     

Creating markets for eco‐labelling: are consumers insignificant?

The proliferation of voluntary certification and labelling schemes for environmentally and socially responsible production is often seen as driven by companies and consumer demand. Through a careful examination of the initiation and spread of such initiatives in the fishery and forestry sectors, this paper challenges a rational–economic perspective that sees the spread of nonstate governance schemes primarily as a market‐driven phenomenon. Drawing on a political consumerism perspective, the paper argues that transnational environmental group networks and their targeting of firms were key to the emergence of nonstate eco‐labelling schemes, and that most firms decided to support or participate in such schemes only after intensive environmental group pressure. The paper opposes the view that nonstate governance challenges traditional state authority, by showing that states, through public procurement policies and support, contributed to create markets for forestry and fishery labelling in many countries. Although some states have been more sceptical of fishery labelling, largely because of the way fishery resources are managed, they have come to accept it as a helpful supplement to public rules and regulations.