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1 – 10 of over 8000Jianhong Qi and Hong Li
The purpose of this paper is to examine if the knowledge spillover effect from foreign direct investment (FDI) inflow exists as well as its possible channels in China, and makes…
Abstract
Purpose
The purpose of this paper is to examine if the knowledge spillover effect from foreign direct investment (FDI) inflow exists as well as its possible channels in China, and makes some policy suggestions.
Design/methodology/approach
Based on the literature review, the paper sets a panel data model to empirically examine if the knowledge spillover effect of FDI inflow exists in China, using data from 28 manufacturing industries during 2001‐2005.
Findings
The empirical results show that FDI played a positive role in China's knowledge creation and management in the sample period. At the same time, the demonstration effect and labor mobility effect served as the channels to yield beneficial results while the competition effect produced undesirable impact. However, the effect of these three channels on China's knowledge creation was very weak. Instead, the knowledge creation in China was still dependent on the input of R&D by domestic firms.
Research limitations/implications
Owing to the data limitation, this paper only adopted data from large and medium enterprises to examine the spillover effect of FDI on the knowledge creation, and thus the conclusions may not be applicable to small enterprises.
Originality/value
Most of the present studies only examined the existence of knowledge spillover effect, without investigating econometrically its channels. Using the latest industry‐level panel data, this paper examines both the existence of knowledge spillover and its main spillover channels empirically.
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To investigate the trends of world foreign direct investment (FDI) flows during the last decades and to explore the reasons behind these trends and to examine the role of…
Abstract
Purpose
To investigate the trends of world foreign direct investment (FDI) flows during the last decades and to explore the reasons behind these trends and to examine the role of multinationals and their investment activities.
Design/methodology/approach
This paper is based on the statistical data of FDI flows throughout the world and on an action field research which was also based on multinationals' investment behaviour. The FDI trends and the role of multinationals are evaluated.
Findings
FDI can play a key role in improving the capacity of the host country to respond to the opportunities offered by global economic integration, a goal increasingly recognized as one of the key aims of any development strategy and an increased growth rate. World FDI inflows grew rapidly and faster than world GDP and world exports during the last two decades. There was a dramatic increase in FDI over the last decade (until 2000) which was based on globalisation and economic integration, technological improvements in communications, information processing and transportation, the changing framework of international competition and the deregulation of several key sectors. There was a dramatic decrease in FDI flows after the year 2000 due to the slowdown in the world economy. M&A deals are the most important driving factors behind overall FDI flows when at least one third (up to two third) of the total FDI flows are due to the M&A cross‐border deals.
Research limitations/implications
The research should be also be expanded in continents (for example, Asia, America) in order to examine the multinationals' investment activities and behaviour in order to conclude about the FDI trends more thoroughly.
Practical implications
More investment interest must be given to the developing or transition countries in which (where) the flows in absolute terms are too low. Moreover, the absence of large cross‐border merger and acquisitions in these countries, can obviously be explained by the lack of the existence of significant and well‐known large companies which could have the potential to become significant world players in the sector that they belong to.
Originality/value
It is a valuable paper for scholars, entrepreneurs and multinationals who prefer to understand the reasons behind the FDI trends and/or for the governments/politicians who prefer to create a framework in order to attract FDI flows to their countries by examining the experience of other countries.
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The paper refers to “a theoretical model” created by the author, named Universal Model, in which have been included most of the theories determining foreign direct investment (FDI…
Abstract
The paper refers to “a theoretical model” created by the author, named Universal Model, in which have been included most of the theories determining foreign direct investment (FDI). What derives from the literature review is that no theory dominates the decision‐making process of FDI. The opportunities a country has to offer change through time, and the different ways in which multinational enterprises (MNEs) evaluate the opportunities led the author to conclude that the concept of globalization is not valid for the theory of FDI. Special attention to the case of Bulgaria has been given. The main reason why the case of Bulgaria is of great interest is the fact that the conditions in the country at the beginning of its transition were some of the worst among the Central and Eastern European countries (CEEs). The conclusion is of extreme interest since economists, MNEs and entrepreneurs have a strong interest in countries that open their economies and target their efforts towards stabilizing and liberalizing their macro‐economic environment.
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The purpose of this paper is to investigate the relationship between factors that influence conducting business and the inflow of foreign direct investment (FDI) to Sub‐Saharan…
Abstract
Purpose
The purpose of this paper is to investigate the relationship between factors that influence conducting business and the inflow of foreign direct investment (FDI) to Sub‐Saharan African (SSA) and Asian countries.
Design/methodology/approach
The factors of business climate defined by the World Bank in 2006 as ease of doing business were correlated with FDI flows to SSA and Asian countries.
Findings
Two factors, “registering property” and “trading across borders”, were found to be related to FDI over all six years of the study (2000‐2005) for the combined sample. Also, several factors were found to be related to FDI received by SSA and Asian countries during various years.
Research limitations/implications
A limitation of the study is that the sample included only SSA and Asian countries.
Practical implications
The findings may help SSA and other countries to improve the business climate in terms of the factors of ease of doing business, in order to attract more FDI.
Originality/value
The paper provides empirical support to the hypothesis that FDI is related to some of the factors of the business climate. It advances understanding of the determinants of the inflow of FDI to African and Asian countries and may be particularly useful to international organizations seeking to do business in SSA and Asian countries.
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Ishmael P. Akaah and Attila Yaprak
This paper illustrates how conjoint methodology can be used by recipient countries to segment the donor market for foreign direct investment (FDI), thereby enhancing the…
Abstract
This paper illustrates how conjoint methodology can be used by recipient countries to segment the donor market for foreign direct investment (FDI), thereby enhancing the effectiveness of their FDI attraction efforts. The study results indicate that FDI donors can be clustered into segments based on the FDI benefits they seek. The article concludes with normative and practical implications of the methodology for investment policy makers in recipient countries.
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Bangladesh achieved its independence in 1971. Since that time, the country has gone through several major policy changes regarding the ownership and control of industries with a…
Abstract
Bangladesh achieved its independence in 1971. Since that time, the country has gone through several major policy changes regarding the ownership and control of industries with a view to promoting economic growth. One of the strategies the Government of Bangladesh (GOB) followed to accelerate economic growth was to attract foreign direct investment (FDI) into the country. Immediately after the independence, the Government obtained control of a large number of industries abandoned by non‐Bangladeshi owners. Through the Nationalization Order of 1972, all key industries including jute, cotton textiles and sugar were vested upon the public sector. The wholesale nationalization of industries resulted in a low growth of the economy. The Gross National Product (GNP) per capita of the country grew at an average annual rate of 0.4 per cent until 1985 compared to 3.8 per cent for the group of “low income countries” (The World Development Report, 1989). The low growth performance of the economy put pressures on GOB to privatise major industries and to undertake economic reforms. As Karim (1996) mentions, external pressure from donors had a significant impact on the Government's investment policy. As a result, the GOB has taken a number of measures to attract FDI including the establishment of the Board of Investment (BOI) and wide publicity in foreign countries. Many believe that GOB has maintained an over‐valued exchange rate in order to attract FDI. These policy changes, along with other traditional factors (such as financial, political, regulatory and tax risks) have significant impact on foreign direct investment (FDI) in Bangladesh.
The paper aims to provide an updated broad assessment of the environment for foreign direct investment (FDI) in light of the referendum vote in the UK to exit the European Union…
Abstract
Purpose
The paper aims to provide an updated broad assessment of the environment for foreign direct investment (FDI) in light of the referendum vote in the UK to exit the European Union (Brexit), the election of Donald Trump as President of the USA and growing nationalist movements in Europe.
Design/methodology/approach
The paper uses an essay format to set out the main issues linking recent political developments to FDI. It reviews some relevant empirical literature to assess the identified linkages.
Findings
It seems reasonable to argue that there will be a reduction in FDI intensity on a global basis over the foreseeable future. It is also likely that the nature of FDI will move more toward being a substitute rather than a complement to trade.
Originality/value
The essay is original and valuable in the sense of offering a contemporary assessment of how important the recent political events may affect the FDI process.
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Tien Dung Luu, Thuy Tien Huynh and Tuan Thanh Phung
This paper aims to assess the relationships between foreign direct investment (FDI) and domestic entrepreneurship (DE) with the moderating role of formal institutions (FI)…
Abstract
Purpose
This paper aims to assess the relationships between foreign direct investment (FDI) and domestic entrepreneurship (DE) with the moderating role of formal institutions (FI), logistics and information communication technology (ICT) capacities.
Design/methodology/approach
The study is based on unbalanced panel data of 53 countries from 2006 to 2020 at different stages of development, using a fuzzy-set qualitative comparative analysis.
Findings
The research results indicate that FDI directly affects the establishment of domestic entrepreneurship. Additionally, FDI firms via the buffer mechanism of FI, logistics and ICT development for DE. Through its adjustment to the quality of institutions, logistics and ICT infrastructure, GDP per capita determines the direction of FDI's impact on DE.
Originality/value
The study's findings grant empirical evidence and theoretical contributions to the relationship between FDI and domestic entrepreneurial development through the buffering mechanism of FI, logistics and the role of ICT.
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Mazignada Sika Limazie and Soumaïla Woni
The present study investigates the effect of foreign direct investment (FDI) and governance quality on carbon emissions in the Economics Community of West African States (ECOWAS).
Abstract
Purpose
The present study investigates the effect of foreign direct investment (FDI) and governance quality on carbon emissions in the Economics Community of West African States (ECOWAS).
Design/methodology/approach
To achieve the objective of this research, panel data for dependent and explanatory variables over the period 2005–2016, collected in the World Development Indicators (WDI) database and World Governance Indicators (WGI), are analyzed using the generalized method of moments (GMM). Also, the panel-corrected standard errors (PCSE) method is applied to the four segments of the overall sample to analyze the stability of the results.
Findings
The findings of this study are: (1) FDI inflows have a negative effect on carbon emissions in ECOWAS and (2) The interaction between FDI inflows and governance quality have a negative effect on carbon emissions. These results show the decreasing of environmental damage by increasing institutional quality. However, the estimation results on the country subsamples show similar and non-similar aspects.
Practical implications
This study suggests that policymakers in the ECOWAS countries should strengthen their environmental policies while encouraging FDI flows to be environmentally friendly.
Originality/value
The subject has rarely been explored in West Africa, with gaps such as the lack of use of institutional variables. This study contributes to the literature by drawing on previous work to examine the role of good governance on FDI and the CO2 emission relationship in the ECOWAS, which have received little attention. However, this research differs from previous work by subdividing the overall sample into four groups to test the stability of the results.
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Na Liu, MoonGyu Bae and Keon Hee Lee
The scholarly debate regarding the impact of inward foreign direct investment (FDI) on entrepreneurship remains inconclusive. This study aims to tackle this discrepancy by…
Abstract
Purpose
The scholarly debate regarding the impact of inward foreign direct investment (FDI) on entrepreneurship remains inconclusive. This study aims to tackle this discrepancy by positing that the relationship between inward FDI and entrepreneurship in the host nation is not deterministic but is moderated by intellectual property rights (IPR) infringement hazards. These hazards are postulated to dictate the level of knowledge spillovers from inward FDI, thereby affecting entrepreneurial activities.
Design/methodology/approach
This study uses panel data regression analysis using data spanning 30 Chinese provinces from 2010 to 2018. The Hausman test results rejected the null hypothesis, recommending the use of the fixed-effects estimator over the random-effects one for statistical consistency. Therefore, the fixed-effects estimator is used to test the hypotheses.
Findings
The study’s analysis reveals that the main effect of inward FDI on entrepreneurship is statistically insignificant. However, once IPR infringement hazards are introduced to the model as a moderator, the main effect turns statistically positive and significant. Notably, the positive main effect diminishes as IPR infringement hazards increase.
Originality/value
Highlighting the role of IPR infringement hazards as a moderator, this research unveils the nuanced relationship between inward FDI and entrepreneurship, thereby addressing the ongoing theoretical debate. This study demonstrates that knowledge spillovers from inward FDI are not automatic but depend on concerns about IPR infringements in the host nation. The resultant spillovers are then translated into entrepreneurial activities.
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