Social and Behavioral Sciences Commons^™

Eu-China Economic Relations: Interactions And Barriers, Zheng Lu

Zheng Lu (Chinese: 路征)

EU-China economic interactions became more and more frequent in the past decades, nowadays EU and China are main trade partner for each other. This paper analyzed EU-China economic interactions from three dimensions: bilateral governmental interactions, trade and investment flows as well as barriers to trade and investment. Findings show that EU-China close relationship is particularly based on goods trade especially on intra-industrial trade of manufacturing industrial products, and trade imbalance is arising from trade in Machinery and Transport Equipment and Other Manufactured Goods (e.g., Clothing and clothing accessories); This paper also found that there exist a myriad of trade and …

Do Foreign Direct Investment And Foreign Aid Promote Good Governance In Africa?, Adugna Lemi, Blen Solomon, Sisay Asefa

Adugna Lemi

The literature on the roles that governance/political and economic stability play to attract capital flows into African economies has been burgeoning. Good governance, liberalization, infrastructure, incentive packages have been regarded as cures to break the deadlock to reverse the economic plight, to attract inflow of capital and, in some cases, to reverse outflows of African economies. The flow of capital, however, has undesirable side effects on host economies’ working conditions, environmental standard, inequality, and culture, among others. These economic and social external or negative spillover effects are due to the phenomenon of “race-to-the-bottom” where companies invest in economies with lax …

Fdi Spillovers In Tanzania`S Manufacturing Sector, Johansein Rutaihwa

Johansein Rutaihwa

Using cross sectional data, this study analyses the spillover effects of foreign direct investment in Tanzania’s manufacturing sector. The findings reject a proposition that FDI intensity has improved domestic manufacturing firms productivity; no vertical technological spillovers occurred and a negative correlation between vertical spillover and FDI presence was found. Instead there is a positive correlation between FDI and horizontal technology spillover. The study, therefore, recommends that the government should make concerted efforts to ensure that FDI promotion addresses technology spillovers both within the industry and across the sector; as well as strengthening and widening the education system to enable it …

Examining The Institutional Framework For Investment In Tanzania: A Perspective From The Executive Opinion Survey, 2012-13, Johansein L. Rutaihwa

Johansein Rutaihwa

This policy brief looks at the country-level findings from the 2012/13 Global Competiveness Report prepared for the World Economic Forum; highlights the current institutional set up in relation to investment; and identifies institutional and policy reforms that could stimulate growth and make Tanzania more competitive on the global market.

Business Cycle Determinants Of Us Foreign Direct Investments, Lilia Cavallari, Stefano D'Addona

Lilia Cavallari

This article investigates the role of output fluctuations and exchange rate volatility in driving US FDIs. Using a sample of 46 economies over the period 1982 to 2009, we provide the evidence of a positive relation between US FDI and host country’s cyclical conditions. Allowing for asymmetry over the business cycle, we find that the output elasticity of foreign investments is higher in booms than in recessions. An increase in exchange rate volatility, on the other hand, has a strong deterrent effect on US foreign investments. This effect is fairly stable over the business cycle.

Output And Interest Rate Volatility As Determinants Of Fdi, Lilia Cavallari, Stefano D'Addona

Lilia Cavallari

This paper examines the role of country-specific sources of output and interest rate volatility in driving FDI activities. Building on a dataset that comprises bilateral FDI flows among 24 OECD economies over the period 1985-2007, we find that output and interest rate volatility mainly act as push factors, i.e. they are more effective in deterring rather than encouraging foreign investments. A rise in host country volatilities does reduce the amount of FDI outflows in the recipient country, even after controlling for the state of the cycle. Source country volatilities, on the contrary, do not have a systematic effect on foreign …

El Vínculo Inversión Extranjera Directa Y Desigualdad Salarial En Los Estados Mexicanos, Vicente German-Soto, Nohemí Marcela Ríos González

Vicente German-Soto

The Gravity Of R&D Fdis, Antonello Zanfei, Davide Castellani, Alfredo Jimenez Palmero

Antonello Zanfei

The gravity model predicts that international trade and FDI should fade with geographic distance. The negative effect of distance is justified by the existence of transport costs which hamper the international exchange of final and intermediate goods, and by higher uncertainty about local markets. We submit that distance plays a remarkably different role in the case of R&D FDIs since they mainly involve the international transfer, absorption and use of knowledge. Using data on bilateral investment projects in R&D, manufacturing and other business activities between 58 countries, we find that geographic distance does not hinder R&D FDIs as much as …

The Investigation Of Foreign Direct Investment Patterns In Russia, Tamilla Curtis, Tom Griffin, Lucyna Kornecki

Dr. Tamilla Curtis

No abstract provided.

Exports And Productivity Selection Effects For Dutch Firms, Henk Lm Kox, Hugo Rojas Romogosa

Henk LM Kox

Is The Impact Really That High? The Effect Of Fdi In Transition, Jan Hagemejer, Joanna Tyrowicz

Joanna Tyrowicz

Literature is not clear on the effect of FDI on the economic performance in hosting countries. The analysed eects include productivity, propensity to export, access to financial markets, etc. Although foreign subsidiaries usually perform better than the average of the hosting economies, sometimes the selection eect is found to be considerable. The analysed eects In this paper we use a unique dataset based on accounting annual reports to the statistical authorities by all medium and large Polish enterprises over a period 1997-2006. We apply a propensity score matching technique to disentangle the effect of self-selection and FDI entry (treatment). We …

Exports And Foreign Direct Investments In An Endogenous-Entry Model, Lilia Cavallari

Lilia Cavallari

Drawing on a tractable DSGE model with nominal rigidity, this paper studies the implications of firms’ entry in domestic and foreign markets for the international business cycle. The paper shows that the decision to enter a new market as well as the choice whether to invest at home or abroad depend on global monetary and productivity conditions. I find that a domestic monetary expansion might favor or deter start-up investments, depending on whether the potential entrant is a national or a multinational firm. Moreover, a structural policy change, as an increase in the degree of monetary stabilization, has a positive …

Are Asean Countries Havens For Japanese Pollution Intensive Industry?, Robert J.R Elliott, Kenichi Shimamoto

Robert J R Elliott

In an era of closer worldwide economic integration, the role that environmental regulations play in shaping a country’s comparative advantage is greater than ever. This has lead to fears that ‘dirty’ firms will relocate from developed to developing countries where environmental regulations may be less stringent – the so called pollution haven hypothesis. To date however there is little support for the existence of pollution havens despite anecdotal evidence and the theoretical predictions. In this paper we employ a unique industry level data set for Japan and examine whether Japanese industries have relocated production to their ASEAN neighbours in response …

The Linkages Between Fdi And Domestic Investment: Unravelling The Developmental Impact Of Foreign Investment In Sub-Saharan Africa, Léonce Ndikumana, Sher Verick

Léonce Ndikumana

While the recent increase in foreign direct investment (FDI) to African countries is a welcome development, the question remains as to the impact of these resource inflows on economic development. This study posits that a key channel of the impact of FDI on development is through its effects on domestic factor markets, especially domestic investment and employment. In this context, this study analyses the two-way linkages between FDI and domestic investment in Sub-Saharan Africa. The results suggest that firstly, FDI crowds in domestic investment, and secondly, countries will gain much from measures aimed at improving the domestic investment climate. Moreover, …

Investigating The Relevance Of Supply-Side Factors For Export-Oriented Investment, Alberto Behar

Alberto Behar

It is important to test the relevance of supply conditions — relative to demand or neutral conditions — for export-oriented investment (EOI). If supply-side factors are not more pertinent, costly measures in place to attract EOI to South Africa might have unintended consequences. Test results suggest supply-side variables are more important for foreign export-oriented investment and not more important for domestic export-oriented investment, but severe data constraints force the construction of crude EOI proxies for the tests. These constraints expose the need for better EOI information and research.