Theoretical background: Due to the growing maturity of Chinese market the country needs to adjust its policy regarding foreign direct investment (FDI), i.e. to increase openness for FDI, to keep control over them in key industries and to influence their inflow in desired industries and regions. Adopting the negative-list approach and changes in both the negative list and encouraged industry catalogue provides tools for this challenge.Purpose of the article: The purpose of this article is to present how changes in China’s Foreign Investment Encouraged Catalogue and Negative Lists both in free-trade zones (FTZs) and at the national level are used as a tool for managing country’s FDI inflow.Research methods: Analysis of legal documents and reports as well as literature review.Main findings: Starting from the adoption of negative-list approach in FTZs in 2013, the negative lists had been drastically reduced both in reference to FTZs and national level. Those reductions lead to a decrease in China FDI restrictiveness index. FTZs were used as a testing area for both the negative list composition and negative-list approach itself. Negative lists allowed the state to keep control over FDI in key industries allowing, at the same time, greater freedom for foreign investors. Encouraged catalogue is used not only as a tool for attracting FDI from desired industries but also for addressing regional inequalities.
The Lisbon Strategy, and building of the KBE (Knowledge Based Economy) – make faster the changes of technological systems, social and economy – on level of countries, or regions and companies. The especially accents there are into innovations, the knowledge values and co–operations, into R&D connected with economy. The main goal is to modernize technology, management and organization, environment and other areas of activity of enterprises. After year 2004 – during the integration process with EU there are the advantageous terms of approach to knowledge, technology and wide understanding innovations – by participation in EU Programs and higher level of FDI. The research of Polish steel branch show that foreign companies are more interested in innovations and going to stable lifting the knowledge and skills than polish companies. This phenomenon causes the creation of technological gap between enterprises in the same branch, and also between the different countries – for example nations belonged to „old EU” and new one countries.
Foreign direct investment inflows into Ghana have been a major source of economic growth transformation. Many investing countries aspire to provide Ghana’s economy with new models and direction for development alternatives to foreign aid which will in effect benefit both nations. Given the government’s intention of transforming most agriculture products into finished commodities other than exporting these commodi-ties in their raw states, a new set of incentives and policies to attract investors into the agriculture sector have been initiated. This consists of farming for food provision and employment generation in a bid to moderating the high rate of unemployment aside depending on the normal farming methods. This study sets to investigate the impact of foreign direct investment in the agriculture sector on employment generation. The paper argues that employment created in the agriculture sector was attained through the number of registered projects allocated to various sectors within the Ghanaian economy categorized by the Ghana Investment Promotion Centre. Methodologically, this study utilizes a statistical descriptive approach that backs a summary of the com-plementary analysis of foreign direct investment inflow quantitatively using data on FDI inflows from 2013 to 2018. The result shows that the percentage share of the total number of registered projects allocated and employment created in the agriculture sector through FDI is very low compared to sectors like the manufacturing and service. It was also discovered that the agriculture sector contribution to the Gross Domestic Product (GDP) in the late 90s weighed much higher than the other sectors and contin-uous decline in the 2000s. It is recommended that investors should enter into the agri-culture sector since there are many benefits. FDI, Agricultural Sector, Employment Generation, Economic Growth Napływ bezpośrednich inwestycji zagranicznych do Ghany był głównym źródłem transformacji wzrostu gospodarczego. Wiele krajów inwestujących dąży do zapewnienia gospodarce Ghany nowych modeli i kierunków rozwoju, alternatywnych dla pomocy zagranicznej, które w efekcie przyniosą korzyści wszystkim. Biorąc pod uwagę zamiar rządu w kierunku przekształcenia większości produktów rolnych w gotowe towary (inne niż eksport tych towarów w stanie surowym), zainicjowano nowy plan zachęt i polityk mających na celu przyciągnięcie inwestorów do sektora rolnego. Rolnictwo ma zapewniać żywność i tworzenie miejsc pracy dla złagodzenia wysokiego poziomu bezrobocia przy zachowaniu normalnych metod uprawy. Niniejsze badanie ma na celu zbadanie wpływu bezpośrednich inwestycji zagranicznych w sektorze rolnym na tworzenie miejsc pracy. W artykule argumentuje się, że zatrudnienie sektorze rolnym zostało osiągnięte dzięki szeregowi zarejestrowanych projektów przydzielonych różnym sektorom w gospodarce Ghany, sklasyfikowanych przez Ghana Investment Promotion Centre. Metodologicznie w niniejszym badaniu zastosowano statystyczną metodę opisową, która opiera się na streszczeniu uzupełniającej analizy napływu bezpośrednich inwestycji zagranicznych w ujęciu ilościowym, z wykorzystaniem danych dotyczących napływu BIZ w latach 2013–2018. Wyniki pokazują, że procentowy udział w całkowitej liczbie przydzielonych zarejestrowanych projektów i miejsc pracy utworzonych w sektorze rolnym za pośrednictwem bezpośrednich inwestycji zagranicznych jest bardzo niski w porównaniu do sektorów takich jak produkcja i usługi. Ujawniono również, że wkład sektora rolnego w produkt krajowy brutto (PKB) pod koniec lat 90. był znacznie wyższy niż innych sektorów, ale zanotował ciągły spadek w latach 2000-nych. Zaleca się, aby inwestorzy wchodzili do sektora rolnego, ponieważ przynosi to wiele korzyści. BIZ, sektor rolny, wzrost zatrudnienia, wzrost gospodarczy
The effects of FDI inflows to the region are the subject of many theoretical considerations, both quantitative and qualitative. In the context of shaping the competitiveness of the region receiving capital effects can be both positive and negative. Whether the positive effects predomi-nate in the region over the negative results depends on the possibilities inherent in the region. SubcarpathianVoivodship, despite the weak notes in the rankings of investment attractiveness has its economic profile. It is the aerospace industry, but also electrical engineering, biotechnology, IT and chemical industries. The region has a large concentration of companies especially the aviation industry, research centers and developed educational and training facilities
This paper investigates the relationships between exchange rates, economic growth and foreign direct investment through a time-variant parameter VAR model using monthly data from China for the period 2001-2016. The focus is on the reaction of economic growth to a shock change in exchange rates or foreign direct investment. The dynamic impulse response function showed that the relationships do not instigate great change. A positive shock in the real exchange rate slows down FDI inflows, with no evidence to support the contractionary devaluation theory in China, which suggests that an increase in the real RMB exchange rate generally causes a negative influence on China’s economic growth. The empirical results of this research contradict what intuition suggests and indicates that FDI has generated an ambiguous effect on economic growth in the past few years. Before 2008, shock changes in FDI would cause economic growth to lag for one period. Since then, the lag phenomenon has disappeared due to better regulation and a maturing financial market.
This study investigates the determinants of the Visegrad Group (V-4) export performance with special attention to quantitative analysis of bilateral trade flows. Based on preliminary statistical analysis, a broad categorization of export directions for V-4 is introduced. Innovative application of the gravity model for international trade is applied to the various trade direction categories, revealing important results particularly in regards to the significance of inward FDI, the restrictive forces associated with the distance between markets, and the relative importance of estimates for aggregate supply and demand potentials. A new variable is introduced in this study to account for the fact that there is a new political border between Czech Republic and Slovakia. Evidence from this study suggests that the fact that these two now independent nations were unified until about 15 years ago remains a strong positive factor for the size of trade flows between them.
This paper uses a panel cointegration model to analyse the long-term relationship between high-technology exports and economic growth in selected OECD countries in the period from 1989 to 2015. We used high-technology exports (current US$) as the dependent variable and the GDP growth rate, FDI (foreign direct investment), application of patents by residents, and gross capital formation % of GDP as explanatory variables. The export structure of countries is moving increasingly towards technology-intensive products such as ICT (information and communications technology), aerospace, computing and office equipment, electronics, chemical products, pharmaceuticals, and electrical machinery. The export structure has played an important role in the economic growth theories of many countries since the 1960s, as export growth has been associated with faster productivity and GDP growth. We aimed to find out the relationship between high-technology exports and the explanatory variables which we listed for 14 selected OECD countries (Canada, Denmark, Finland, France, Germany, Israel, Korea, the Netherlands, Norway, Switzerland, Sweden, Turkey, the UK, and the USA). According to our empirical results, there is a long-term relationship between high-technology exports and economic growth in selected OECD countries. The empirical results show that an improvement in patent applications and foreign direct investment play a decisive role in upgrading selected OECD countries’ high-tech exports, while growth rate and investment play a negative role in enhancing these countries’ high-tech exports.
The paper evaluates the qualitative aspects of the Czech Republic position in the global economic flows in terms of their knowledge intensity. The stress is being put on structural characteristics of value-added, FDI and R&D and the innovation activities indicating the change of competitive advantage towards the increasing role of internal innovation capacity and unique product and processes. This change, however, may not be fast enough to compensate for weakening cost-based competitiveness. Despite the increasing share of FDI companies in domestic R&D activities, their average knowledge intensity remains low. The prevailing competitive strategy relies on adoption of foreign technology knowledge to local needs, possibly with minor adjustments.
The study examines technical efficiency of Foreign Direct Investment (FDI) firms in the Vietnamese manufacturing sector by applying stochastic production frontier model and making use of cross-sectional data in the period 2009-2013. The average level of technical efficiency of FDI firms is about 60% and it is higher than that of domestic firms (including private firms and state-owned firms). In addition, the study also analyses correlation between technical efficiency of FDI firms and other factors. It finds that there are positive correlations between FDI technical efficiency and net revenue per labour, firm’s age or export activities in 2013. However, the study is unable to find evidence of a relationship between FDI technical efficiency and infrastructure or firm’s investment activities.
The Czech Republic (and its manufacturing industry) has been a successful recipient of foreign direct investment over recent years. Therefore, it is important to understand the decisions made by foreign investors where to place their investments and how to decide on their location between alternative industries. The aim of this paper is to find and estimate an econometric model describing the determinants of foreign direct investment (FDI) in the manufacturing industry of the Czech Republic between 2000-2007 and to make a review of recent literature on the topic. The econometric model includes several economic variables (for example labor, physical capital, R&D, profits per labor, Balassa index). Together with simple techniques of estimation (OLS, fixed effects) we used a generalized method of moments (GMM). In an effort to improve the result we used also a least trimmed squares estimator (LTS) from the class of robust estimators as a diagnostic tool for the heterogeneous pattern of data.
In this paper I analyze the role of business service offshoring in international cooperation over the recession. In business services - as described in Schumpeterian literature - external restructuring including resource and production relocation is more intensive during recession periods while intensive internal restructuring accompanies expansion periods. As external restructuring encompass business processes fragmentation and offshoring of services, I also argue - taking into account historical evidence - that current economic crisis would result in growing service offshoring in business service sector. I expect that many financial institutions would relocate part of their business processes abroad, where operating costs are lower, as they find that external restructuring via offshoring is the way to survive. This, in turn, will be the most possible result in growth of service offshoring projects located in CEE and Asia, as these two locations were the most attractive ones in recent years for service offshoring. The process is reflected by growth of FDI outflows from developed economies to CEE and Asia as well as growth of business and IT services trade between the mentioned economies. However, I also expect that in short run (one year perspective) we will experience tremendous decrease of FDI flows including investment in service offshoring, nevertheless the share of FDI flows related to service offshoring in total FDI flows will increase.
The turn of the 20th and 21st centuries brought an intensive increase of international economic connections that were a part of the process of globalization of the world economy. The result of these processes was opening of the countries’ economies which influenced the increase of the role of foreign investments as a factor of economic development of a country. Foreign direct investments (FDI) are nowadays one of the most sought-after forms of foreign capital flow. Foreign investments do not cause external debt. They influence the flow of technology, generate economic growth, contribute to the decrease in unemployment, introduce new management methods, create access to the new markets and generate production infrastructure. The following study presents a short characteristic of foreign investments in France. It analyses regional differentiation of foreign investments in France on the basis of their quantity and in reference to the number of workplaces generated by FDI. Finally, the article presents the factors that have influence on the localization of foreign investments.
The role of foreign direct investment (FDI) in economic development and its contribution to the performance of domestic firms has motivated researchers to initiate studies for analyzing the impact of FDI on economic performance. The literature on the role of FDI mainly focuses on the production, employment, economic growth, balance of payments, knowledge spillovers and general welfare of the recipient country. However, economic growth is triggered by firms that are able to transform these positive impacts of FDI into improved firm performance. Nevertheless, the impact of FDI on firm performance has not been investigated at firm level widely. The aim of this paper is to examine whether FDI and investment incentives can be justified on the basis of academic research regarding their firm performance effect. A panel data of non-financial firms listed at Istanbul Stock Exchange (ISE) for the period 1998-2007 is used to model firm performance in terms of return on assets and sales as a dynamic process. This paper contributes to the existing literature by providing firm level empirical evidence on the impact of investment incentives and foreign ownership together with size on firm performance. Our results suggest that large and foreign ISE listed firms perform better than domestic firms. Moreover, investment incentives, as both determinants of FDI decisions and as their stand alone positive impact on firm performance, can create the economic environment in which FDI inflows can be transformed into positive returns both for recipients and investors.
In 2003 Goldman Sachs published a report written by Wilson and Purushothaman entitled Global Economics Paper No. 99: Dreaming With BRICs: The Path to 2050, which central idea is that over the next 50 years, Brazil, Russia, India and China could become a much larger force in the world economy, even larger than the current G7 economies in US dollar terms. In 2017 BRICS joint contribution to the world economy was 23.6 per cent and according to the International Monetary Fund (IMF) predictions this is set to rise to 26.8 per cent by 2022. Based on the used estimation, the biggest contributor to the FDI inflows is an index of economic openness, where decreasing barriers for trade and investment increase country’s exposure to the global economy, which in return has a significant effect in attracting FDI to the economy. Secondly, in majority of cases change in both import and export values tend to negatively affect FDI inflows, such phenomenon does not necessarily mean that country must not engage and liberalize its trade policy, but that the impact of those factors is inconsistent and has to be researched further. Thirdly, GDP contribution confirms the gravity model hypothesis as larger economies tend to attract larger volumes of FDI inflows, however in case of China this effect seems to be slightly reversed. Lastly, the effect of trade balance on FDI inflows remains complex to capture, however a dummy variable method applied in this paper can be applied to countries that have both positive and negative trade balance dynamic.
PL
W 2003 roku Goldman Sachs opublikował raport napisany przez Wilsona i Purushothamana zatytułowany "Global Economics Paper No. 99: Dreaming With BRICs: The Path to 2050, którego główną ideą jest to, że w ciągu następnych 50 lat Brazylia, Rosja, Indie i Chiny mogą stać się znacznie większa siła w światowej gospodarce, nawet większa niż obecne gospodarki G7 w ujęciu dolarowym. W 2017 r. Wspólny wkład BRICS w gospodarkę światową wyniósł 23,6%, a według prognoz Międzynarodowego Funduszu Walutowego (MFW) do 2022 r. Ma wzrosnąć do 26,8%. Na podstawie wykorzystanych szacunków największy udział w napływie BIZ stanowi wskaźnik otwartości gospodarczej, gdzie malejące bariery w handlu i inwestycjach zwiększają ekspozycję kraju na globalną gospodarkę, co z kolei ma znaczący wpływ na przyciąganie bezpośrednich inwestycji zagranicznych do gospodarki. Po drugie, w większości przypadków zmiana zarówno wartości importu, jak i eksportu wpływa negatywnie na napływ BIZ, zjawisko to niekoniecznie oznacza, że kraj nie może angażować się i liberalizować swojej polityki handlowej, ale że wpływ tych czynników jest niespójny i musi być zbadałem dalej. Po trzecie, wkład PKB potwierdza hipotezę modelu grawitacji, ponieważ większe gospodarki mają tendencję do przyciągania większych wolumenów napływów BIZ, jednak w przypadku Chin efekt ten wydaje się być nieco odwrotny. Wreszcie, wpływ salda handlowego na napływ BIZ jest nadal trudny do uchwycenia, jednak zastosowana w niniejszym dokumencie metoda zmiennej fikcyjnej może być stosowana do krajów, które mają zarówno dodatnią, jak i ujemną dynamikę bilansu handlowego.
Due to economic growth Poland has been perceived as a country with good development prospects. It is an important factor to attract and to maintain substantial inflow of foreign direct investment (FDI) into Polish economy. Turkey belongs to major foreign investors in Poland. However, there is still a lot of potential in Turkish investment.
An economic regime might take the form in which extractive institutions do not allow for the proper development of foreign direct investment. In consequence these countries cannot fully benefit from economic aspects of globalization and increasing standards of living. This is the case of Ukraine, a country with very good location advantages and a well-educated workforce that attracts only the murky type of FDI. It is a country that is troubled by corruption and political instability but at the same time a country that began the path to finding its national identity by fighting against extractive institutions.
Foreign direct investments are very important for the implementation of strategic reforms, transfer of advanced technologies and managerial methods, thereby stimulating economic growth in developing countries and in particular, transition economies such as Albania is. During the last years, Albania experienced an increase in foreign investors’ interest in a wide range of sectors, with energy generation, telecommunication, cement production, mining, oil and industrial parks heading the list. However, the major obstacle factors for FDI inflows seem to remain the same: pervasive corruption, weak law enforcement, poor rule of law, lack of developed infrastructure, lack of a reliable energy supply and insufficiently defined property rights. Determining the factors that attract FDI, and furthermore identify the main characteristics of the host country’s economy, are essential to understand the reason of FDI inflows to a country or region. In the empirical perspective, various studies give different results. More specifically, this paper has focused on determining the factors for and against FDI in Albania.
On January 1, 2020 the new Foreign Investment Law of the People’s Republic of China (中华人民共和国外商投资法) entered into force to promote investments in China. The aim of the law is to foster cross border investments. This law was passed on March 15, 2019 by the National People’s Congress. The Chinese FDI legal framework is composed of a set of laws and regulations that are dynamically shaping the economic reality. What are the possible tensions between the new law and the complex system of values in China? Is the new law an agent of implementing de facto social development? In summary, the results show that there is a complex relationship between FDI and social development in China. The new Chinese law might be an inspirational source of non-European legal tradition for Central Europeans.
This paper aims to explore the pattern of foreign direct investment (FDI) between Poland and Germany. It focuses on the bilateral aspects of the Investment Development Path (IDP) which so far seems to have been a rather neglected research area. Evolution along the IDP has been, with some exceptions, studied mainly globally without differentiating between partner countries. The conducted analysis sheds light on mutual Polish-German investment relations by putting them in the context of the IDP concept. The obtained findings can be supportive in formulating policy guidelines.
The following article presents the results of three research projects on foreign direct investment (FDI) in the Kujawsko-Pomorskie Province. They have been conducted by the Nicolaus Copernicus University team in 2003–2004, 2011–2012 and 2014–2016 respectively. The research was carried out using the same research method and covered both local authorities and enterprises with foreign capital operating in the province. The results of these studies allowed the authors to compare the assessments of FDI location factors among both groups of respondents as well as to identify potential changes in their perception over time and to confront these conclusions with the results of other research studies carried out in several other Polish provinces.
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.