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1 – 10 of over 1000Konstantinos Drakos, Ekaterini Kyriazidou and Ioannis Polycarpou
This paper seeks to explain the serial persistence as well as the substantial number of zeros characterizing global bilateral investment holdings. We explore the different sources…
Abstract
Purpose
This paper seeks to explain the serial persistence as well as the substantial number of zeros characterizing global bilateral investment holdings. We explore the different sources of serial persistence in the data (unobserved country pair effects, genuine state dependence, and transitory shocks) and examine the crucial factors affecting the decision to invest in a host country.
Methodology
Based on a gravity setup, we consider investment behavior at the extensive (participation) margin and employ dynamic first-order Markov probit models, controlling for unobserved cross-sectional heterogeneity and serial correlation in the transitory error component, in order to explore the sources of persistence. Within this modeling framework we explore the importance of institutional quality of the host country in attracting foreign investment.
Findings
The data support that the strong persistence is driven by true state dependence, implying that past investment experiences strongly impact on the trajectory of future investment holdings. Institutional quality appears to play a significant role to attract foreign investment.
Research implications
The empirical findings suggest that due to the existence of genuine state dependence, inward-investment stimulating policy measures could have a more pronounced effect since they are likely to induce a permanent change to the future trajectory of inward investment.
Originality
Both the substantial number of zeros and the salient persistence characterizing bilateral investment holdings decision have been previously overlooked in the literature. A study modeling jointly the levels and the selection mechanism could prove a fruitful direction for future research.
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This paper aims to indicate that the foreign investment system in Jordan includes many provisions that create an appropriate environment for encouraging foreign investments and…
Abstract
Purpose
This paper aims to indicate that the foreign investment system in Jordan includes many provisions that create an appropriate environment for encouraging foreign investments and grant a distinctive treatment for the foreign investor that allows them the status equal to the national investor.
Design/methodology/approach
This study deals with the protection provided by the Jordan Government for foreign investments to attract foreign investment by studying the guarantees given by Jordan including many legal principles that encourage investment. The legal guarantees for the foreign investor enhance the confidence of the foreign investor in the host country.
Findings
The system provides a lot of guarantees with respect to non-commercial risks to which the foreign investor may be exposed.
Originality/value
The paper also clarifies that the role played by bilateral agreements in the field of investments, as these agreements give foreign investments a measure of protection through the guarantees and they are considered as incentives for the investor.
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Shi Li and Shizhong Huang
Mergers and acquisitions (M&As) dominated by Chinese enterprises have become increasingly conspicuous and prevalent in recent years. However, many of them were obstructed by…
Abstract
Purpose
Mergers and acquisitions (M&As) dominated by Chinese enterprises have become increasingly conspicuous and prevalent in recent years. However, many of them were obstructed by foreign governments on the ground of “Threating National Security”. Overseas acquisition is a crucial step of Chinese Government’s “Going-Out” strategy, so analyzing the attribution of its success and failure is very important.
Design/methodology/approach
This paper adopts empirical study method to analyze the factors from political and cultural perspectives based on a sample of 327 cross-border M&A transactions made by all listed companies in China from 1997 to 2010.
Findings
The result shows higher failure rate for those acquisition targets which could be classified as political sensitive assets; meanwhile, positive diplomatic relations and higher bilateral trust between China and the host country will facilitate the M&A transaction.
Originality/value
This paper offers a new research angle on cross-border M&As, which is the impact of culture factors, as well as diplomatic relationship, bilateral trust and war history between China and the host country on M&A transactions. This paper also constructs several ways of measuring the diplomatic relationship between countries.
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Gour Gobinda Goswami and Nisit Panthamit
Political risk factors play a pivotal role in determining the bilateral trade flow of Asian countries in general and the Association for Southeast Asian Nations (ASEAN) countries…
Abstract
Purpose
Political risk factors play a pivotal role in determining the bilateral trade flow of Asian countries in general and the Association for Southeast Asian Nations (ASEAN) countries in particular. The main purpose of this research paper is to examine the impact of disaggregated political risk in lowering the bilateral trade flow of Thailand, a prominent member of ASEAN, vis-à-vis her 132 trading partners.
Design/methodology/approach
Using panel data of Thailand with her partner countries for the period 1984–2015, this paper uses four different panel specifications named pooled ordinary least squares and random effects estimations (estimated generalized least squares estimation) of three types by controlling for cross-sectional heteroscedasticity, time-wise heteroscedasticity and contemporaneous correlation.
Findings
Holding other gravity-based determinants constant, for one unit increase in the ranking of indicator of military in politics at home and abroad, trade flow decreases by 5–9% of the total trade flow of Thailand per year. For other types of political risks like government instability at home and abroad, difficulties in investment profile at home and abroad and internal and external conflict at home and abroad, the decrease is also substantial and most statistically significant. The magnitude of loss due to the military channel at home and abroad can amount to US$9.38–US$16.88 bn per year for Thailand, after controlling for other gravity variables.
Research limitations/implications
The reasons for risk originating from different political channels could be explored at the regional or global level to understand their global and local dimensions.
Practical implications
Policymakers should attempt to resolve the political risks at home and abroad in an amicable manner, through dialogue, so that bilateral trade flow is not inhibited.
Social implications
By taking economic reforms only, the trading problem cannot be resolved until and unless Thailand involves her society, politics and administrative mechanisms in a conducive manner to facilitate her trade. A dialogue among bureaucracy, political authority and military is beneficial in mitigating political risks.
Originality/value
The paper is unique in the sense that it makes a solid attempt to identify the potential channels of disaggregated political risk in affecting trade flow negatively, in a gravity framework, by controlling for different kinds of error structure.
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Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some…
Abstract
Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.
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The purpose of this study is to modify the gravity model to identify the main determinants of the European Union (EU) bank lending to the Central and Eastern Europe (CEE…
Abstract
Purpose
The purpose of this study is to modify the gravity model to identify the main determinants of the European Union (EU) bank lending to the Central and Eastern Europe (CEE) countries during 1994-2012.
Design/methodology/approach
This study uses both two-stage least squares and dynamic generalized method of moments to estimate the modified gravity model.
Findings
This study finds that the CEE countries with more developed stock markets have received the higher EU bank lending inflows. The EU banks have greater access to additional financing in the stock markets. Second, the higher stock market difference between the CEE and EU countries has boosted the EU bank lending. Compared to the developed EU stock markets, the less developed CEE stock markets have become more favorable to the EU banks seeking to earn higher profits.
Research limitations/implications
The CEE countries can further boost the EU bank lending inflows through deepening capital liberalization. They should facilitate easy foreign bank entry by reducing excessive bank legislations and regulations. Moreover, they can promote the EU bank lending through substantial EU bank integration. This can accelerate the major bank reform which would facilitate better bank supervision and regulations.
Originality/value
Most previous studies have primarily used the macroeconomic and institutional factors to explain the EU bank lending. In contrast, this study explores the growing importance of the CEE financial development and bilateral trade in explaining the EU bank lending.
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Yunmiao Gui, Huihui Zhai, Feng Dong and Zhi Liu
This paper aims to investigate how user expectations affect value-added service (VAS) investment and pricing decisions of two-sided platforms. It draws on the information…
Abstract
Purpose
This paper aims to investigate how user expectations affect value-added service (VAS) investment and pricing decisions of two-sided platforms. It draws on the information asymmetry theory and offers suggestions on how platform operators can manage user expectations.
Design/methodology/approach
According to the game theory, this study considers three user expectations (responsive, passive and wary). By framing the Hotelling duopoly model and comparing the VAS investment, price and platform profits, the optimal platform decision is analyzed and discussed.
Findings
The conclusions demonstrate that the monopolistic two-sided platform obtains more profits from the informed users with responsive expectations than uninformed users with passive or wary expectations. The marginal investment cost and cross-network externalities are two key factors that determine the platform's VAS investment and pricing strategies of passive or wary users. Furthermore, considering the expectation preferences, i.e. the uniformed users hold wary expectations with more information and hold passive expectations with less or no information, the results suggest that the proportion of wary users to all uninformed users increases the platform's VAS investment, profits and the price of informed users, and increase (decrease) the price of uninformed users when the cross-network externalities of informed users are relatively small (larger).
Practical implications
These results can provide insightful enlightenment into how platform operators utilize bilateral users' expectations and information level to guide their VAS investment and pricing decisions.
Originality/value
This paper is one of the first to explore the impact of three user expectations and the heterogeneity of preferences in informing users' passive or wary expectations, based on different levels of information on the decision-making of two-sided platforms regarding VAS.
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Hung-Gay Fung, Derrick Tzau and Jot Yau
This chapter provides a review of the Chinese government policies that promote the internationalization of the Chinese currency, the renminbi or RMB, which include the RMB swap…
Abstract
This chapter provides a review of the Chinese government policies that promote the internationalization of the Chinese currency, the renminbi or RMB, which include the RMB swap arrangements between the central banks, trading of the RMB across different markets, and establishment of the dim sum bond market. In particular, we update the development of the dim sum bond market in terms of the size, amount of the issues, coupon and tenor characteristics, issuers, and investment bankers of dim sum bond issues. The dim sum bond market appears to be a promising global asset class for investors.
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