Download or read book Estimating Direct and Indirect Effects of Foreign Direct Investment on Firm Productivity in the Presence of Interactions Between Firms written by Sourafel Girma and published by . This book was released on 2014 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Do Domestic Firms Benefit from Foreign Direct Investment written by Brian J. Aitken and published by World Bank Publications. This book was released on 1994 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: It seems that technology gains from foreign investment are captured entirely by joint ventures.

Download or read book Foreign Direct Investment Agglomeration and Externalities written by Jacob A. Jordaan and published by Routledge. This book was released on 2016-04-22 with total page 227 pages. Available in PDF, EPUB and Kindle. Book excerpt: By critically appraising current theories of both Foreign Direct Investment (FDI) and agglomeration, this book explores the variety of links that exist between these two externality-creating phenomena. Using in-depth empirical research on Mexico, Jacob Jordaan constructs and analyzes several datasets on Mexican manufacturing industries at various geographical scales, creating innovative models on FDI externalities that incorporate explicitly regional considerations. The empirical findings identify both direct FDI spillover effects as well as the effects of agglomeration on these externalities. In extension of this, the analysis also contains analysis of FDI productivity effects that arise through inter-firm linkages between FDI and local Mexican suppliers.

Download or read book Foreign Direct Investment and Local Firm Productivity written by Sasima Wongseree and published by . This book was released on 2012 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt: The enormous costs incurred to government for foreign direct investment (FDI) inflows raised question whether its benefits are worthwhile. In this dissertation, I use productivity estimates as outcomes to explore the direct and indirect impacts of FDI inflows on local firms in manufacturing sector of Thailand during 2001 to 2006. Chapter 1, I introduce the overview of the entire dissertation. Chapter 2, I briefly reviewed investment climates and FDI conditions in Thailand. Then I constructed a comprehensive firm-level dataset from several data sources for FDI examination. The main dataset offers quantity and capacity outputs along with revenues at product-level. Chapter 3, I modify two existing productivity estimation approaches to compute firm productivity in terms of value added, quantity and full capacity outputs. The new productivity estimation approach corrects for endogeneity, multicollinearity and allows for multi product firm assumption. The production function coefficients from the new model exhibit unskilled labor intensive technology in all sectors. Chapter 4, with productivity estimates from chapter 3, I examine the FDI direct impacts on productivity of local affiliates. I adopt two selection bias correction methods: average treatment effects on the treated based on propensity score matching (ATT), and a control function based on second moment conditions proposed by Farre, Klein and Vella (2009). The results from ATT exhibit the existence of FDI direct effects in ten sectors. The results from the second method are significant in eleven sectors. This finding suggests that FDI direct effects depend on specific factors across sectors. Chapter 5, I investigate whether FDI spillovers exist through horizontal and vertical relationships. The agglomeration-spatial weights are introduced in spillover variables to capture the contributions of clusters and geographical distances. When controlling for agglomeration and geographical distance, the results indicate positive spillover effects through backward linkages, and negative effects through forward linkages and horizontal relationships. This finding reflects the positive benefits from FDI to Thai suppliers, negative impacts on Thai buyers and competitors who located close to clusters. This means FDI spillover exists only when FDI firms are located close to clusters.

Download or read book How Does Foreign Direct Investment Affect Economic Growth written by Mr.Eduardo Borensztein and published by International Monetary Fund. This book was released on 1994-09-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: We test the effect of foreign direct investment (FDI) on economic growth in a cross-country regression framework, utilizing data on FDI flows from industrial countries to 69 developing countries over the last two decades. Our results suggest that FDI is an important vehicle for the transfer of technology, contributing relatively more to growth than domestic investment. However, the higher productivity of FDI holds only when the host country has a minimum threshold stock of human capital. In addition, FDI has the effect of increasing total investment in the economy more than one for one, which suggests the predominance of complementarity effects with domestic firms.

Download or read book DOES IT MATTER WHERE YOU COME FROM Vertical Spillovers from Foreign Direct Investment and the Nationality of Investors written by Kamal Saggi, Beata K. Smarzynska Javorcik and published by World Bank Publications. This book was released on 2004 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Javorcik, Saggi, and Spatareanu use a firm-level panel data set from Romania to examine whether the nationality of foreign investors affects the degree of vertical spillovers from foreign direct investment. Investors' country of origin may matter for spillovers to domestic producers in upstream sectors (supplying intermediate inputs) in two ways. First, the share of intermediate inputs sourced by multinationals from a host country is likely to increase with the distance between the host and the source economy. Second, the sourcing pattern is likely to be affected by preferential trade agreements that cover some but not other source economies. In this case, the Association Agreement signed between Romania and the European Union (EU) implies that inputs sourced from the EU are subject to a lower tariff than inputs sourced from America or Asia. Moreover, while for European investors intermediate inputs sourced from home country suppliers comply with the rules of origin and thus can be exported to the EU on preferential terms, this would not be the case for home country suppliers of American or Asian multinationals. Therefore, one would expect that American and Asian investors source more from Romania than EU investors and thus present greater potential for vertical spillovers. The empirical analysis produces evidence in support of the authors' hypothesis. They find a positive association between the presence of.

Download or read book A Meta Analysis of the Indirect Impact of Foreign Direct Investment in Old and New EU Member States written by Randolph Luca Bruno and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we summarise, combine and explain recent findings from firm-level empirical literature focusing on the indirect impact of foreign direct investment (FDI) on economic performance, measured as productivity, in the Enlarged Europe. We have reviewed 52 quantitative studies, released between 2000 and 2015 and codified 1,133 estimates. We run a regression of regressions which measures the strength of the FDI-productivity relationship. Taking advantage of large number of high-quality studies on FDI and its role in explaining the growth in firms' productivity in Europe, we adopt recent meta-regression analysis methods--funnel asymmetry and precision estimate tests and precision-effect estimate with standard errors--to explain the heterogeneous impact of FDI. This paper assesses the country-specific impact of FDI on firms' performance, after taking publication selection bias, econometric modelling and the individual studies' characteristics fully into account. Our results show that on average FDI has a positive indirect impact on productivity. The impact is especially significant in selected European countries, and we interpret this as a sign of better absorptive capacities in those countries.

Download or read book Foreign Direct Investment s Effect on Host Industry Competition and Productivity in the U S written by Wilbur Chung and published by . This book was released on 1997 with total page 478 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book DOES FOREIGN DIRECT INVESTMENT INCREASE THE PRODUCTIVITY OF DOMESTIC FIRMS written by BEATA K. SAMARZYNSKA and published by . This book was released on 2003 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Foreign Direct Investment A Review of the Determinants and Economic Effects written by Antonia Haberger and published by GRIN Verlag. This book was released on 2020-08-04 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bachelor Thesis from the year 2019 in the subject Business economics - Investment and Finance, grade: 1,3, LMU Munich (Institut für marktorientierte Unternehmensführung), language: English, abstract: Both the drivers and effects of foreign direct investment (FDI) are complex and multifaceted. This thesis provides a conceptual overview of a selection of the most frequently considered drivers and economic effects of FDI in literature. The overview aims to support host countries in providing targeted incentives to attract FDI by raising the awareness of controllable drivers. Drivers for selecting a specific host country are presented hierarchically according to their controllability by the host country. The governance infrastructure as a driver, for instance, is easier to control by the target country than market characteristics, cultural distance, or resource endowments. This thesis discusses the drivers according to their decreasing controllability, starting with political factors, followed by economic, social, and cultural, as well as geographical factors. The reasons why these factors may attract FDI are outlined in the respective subsections. Moreover, this overview presents the economic effects of FDI on the host country. These effects include increased competition or spillover effects from foreign to local companies. The composition of direct and indirect effects leads to the conclusion that all these effects impact economic growth, which represents both a driver and an effect of FDI simultaneously. Thus, this thesis refers to the dependencies between drivers and effects with their interrelated factor economic growth. Further, it is argued that the effects of FDI are significantly interdependent among each other. Therefore, the realization of specific effects, such as economic growth, strongly depends on conditions and specific characteristics, such as the particular threshold level of human capital in the host country.

Download or read book The Impact of Foreign Direct Investment and Export on Gross Domestic Products in Developing Countries written by Antoine Niyungeko and published by GRIN Verlag. This book was released on 2020-12-07 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: Scientific Study from the year 2020 in the subject Business economics - Investment and Finance, , language: English, abstract: This paper aims to investigate the relationship between foreign direct investment (FDI), export (EXP) and gross domestic product (GDP). The impact of interaction between EXP and FDI on GDP was also examined. For this purpose, quantitative approach was adopted. Secondary data for 49 countries whose gross national income per capita was less than 6 000 $ were collected. Spearman correlation, robust regression and causal mediation analysis were performed. Spearman correlation showed very strong correlation among GDP-FDI-EXP. Robust regression indicated that all regression coefficients are statistically significant indicating a positive moderation effect of the interaction between EXP and FDI on GDP. Causal mediation effect indicated that average causal mediated effect is statistically significant while average direct effect is not statistically significant, indicating full mediation. The effect of FDI on GDP is transmitted to GDP through increasing EXP. The effect of the interaction of FDI and GDI was found statistically significant. The results are consistent with empirical studies and existing theories.

Download or read book Productivity Consequences of Foreign Direct Investment Connectivity written by Soni Jha and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The primary aim of this dissertation was to examine the implications of conceptualizing Foreign Direct Investment (FDI) as a multilateral and multilevel phenomenon. The first research study in the dissertation examines the implication of a multilateral perspective on FDI in our assessment of the relationship between inward FDI and the economic growth and development of the host countries. This study showed that inward FDI positively impacts the economic growth of the host countries in both the short and long term. The second research study focused on conceptualizing FDI as a multilevel phenomenon. The fundamental premise of this chapter was to explicitly acknowledge that even though the implications of FDI can be observed at the aggregate level, such as host countries, as was the case in the first research study, these consequences emerge from the decisions of the individual firms. Furthermore, the findings of this research study demonstrate that different levels of FDI are interconnected but have different implications for the firm's performance. Drawing upon the existing literature, two considered levels were location-based FDI networks and interfirm collocation networks. Empirical analyses showed that location-based networks are characterized by agglomeration and lead to positive production externalities, while competitive interactions characterize interfirm collocation networks and lead to negative production externalities. Consequently, increasing agglomeration is associated with increasing production output, and increasing competitive interaction is associated with decreasing production output of the firms. In the last research study, we considered how different network externalities, as explicated in the previous chapter, impact the firms' strategic decision-making. This study shows that firm membership in the country-of-origin network helps them make better decisions, while membership in interform collocation networks worsens their decision-making abilities.

Download or read book Three Essays on the Relationship Between Policy Uncertainty and Foreign Direct Investment written by Chikezie Kenneth Okoli and published by . This book was released on 2021 with total page 163 pages. Available in PDF, EPUB and Kindle. Book excerpt: Foreign direct investment (FDI) occurs when an entity in one country establishes a significant degree of ownership in an enterprise in another country. FDI is a critical component in ensuring the development of any economy. It often aids with the development of an industry or sector within an economy by bringing in capital, new technologies, manufacturing methodologies, and managing expertise to the receiving country. This dissertation examines the relationship between policy uncertainty and foreign direct investment (FDI) in developed economies. The first essay focuses on U.S. policy uncertainty and its effects on U.S. FDI inflows, while the second essay focuses on the cross-border effect of U.S. policy uncertainty on its neighbours FDI inflows. The third essay focuses on how policy uncertainty affects the investment entry mode choices of multinational enterprises. In the first essay, I add to the discussion surrounding Foreign Direct Investment (FDI) and its relationship with policy uncertainty by employing novel measures of policy uncertainty in the United States. Drawing some conclusions from the Real Options investment theory, I examine the relationship between policy uncertainty and FDI inflows using different measures of policy uncertainty. Overall, I find that an increase in the Partisan Conflict (PC) index increases the flow of FDI into the United States. This finding appears at odds with what has previously been found in the literature regarding political uncertainty and FDI. Using other measures of policy uncertainty such as the Economic Policy Uncertainty index (EPU) and the categorical EPU (CPU) index the estimated results show policy uncertainty as measured by the EPU index, decreases FDI into manufacturing sectors and decreases FDI into non-manufacturing sectors. This effect varies depending on the sample period being examined. However, when policy uncertainty is measured by the CPU index, policy uncertainty has no impact on FDI inflows to the United States regardless of the type of industry or capital intensity. The second essay examines how U.S. policy uncertainty spillovers affect its neighbours within the context of FDI inflows. Adopting a common framework employed in the literature, I utilize a Vector Autoregressive (VAR) model to examine the contemporaneous relationships between the endogenous and exogenous variables. The two spillover transmission methods examined in this paper are Direct Transmission and Indirect Transmission. The empirical analysis conducted showed that the significance of U.S. policy uncertainty spillovers varied by country and the method of transmission. Canadian FDI inflows from the United States and from the rest of the world were shown to be more susceptible to the negative effects of U.S. policy uncertainty spillovers via the direct channel. But the results remained mixed when considering the indirect channel. For Mexico, the results showed that only U.S. FDI inflows to Mexico were susceptible to the negative effects of U.S. policy uncertainty via the indirect channel. Furthermore, when policy uncertainty spillovers were defined between Partisan Conflict (PC) index and the Economic Policy Uncertainty (EPU) index, the results showed that only EPU spillovers were significant in affecting FDI across Canada and Mexico. The third essay examines the mode of entry that Japanese multinational enterprises (MNEs) adopt in the presence of host market policy uncertainty. Employing a two-stage framework, I examine how Japanese MNEs establish foreign affiliates in 25 countries. In the first stage, the firms decide whether to adopt a direct or an indirect mode of entry in the presence of host market policy uncertainty. A direct entry mode is when the MNE has an ownership share in the affiliate that is greater than 10% while an indirect entry mode is when the MNE has no ownership shares in the affiliate but sets the operational and business goals of the affiliate. The results show that Japanese MNEs preferred an indirect mode of entry when faced with medium levels of policy uncertainty. In the second stage the estimated results show that relatively high levels of policy uncertainty caused Japanese MNEs to prefer minority Joint Ventures over establishing Wholly Owned Subsidiaries. Since 58% of observed investments occur in two countries (China, the United States) it is possible that the results of the analysis are being driven by the concentration of investments in both countries. Therefore, I re-examine the model to focus exclusively on investment activities in China and the United States. These results show that the previously described results were due to the investment activity in these two countries.

Download or read book Comparative Advantage Outward Foreign Direct Investment and Average Industry Productivity written by Yong Joon Jang and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we explicitly address the role of comparative advantage in effects of outward FDI on domestic productivity, both theoretically and empirically. In the theoretical framework, we place Irarrazabal, Moxnes and Opromolla's (2009) outward FDI model into Bernard, Redding and Schott's (2007) framework of international trade with heterogeneous monopolistically competitive firms and comparative advantage; and show that ex ante high average industry productivity triggered by firm self-selection enhances ex post average industry productivity during the process of increase in FDI. Using Korean industry-level data from 1992 to 2008, we also empirically test our theoretical predictions using the fixed effect model as a benchmark model, followed by system GMM estimation methods for sensitivity analysis. Our empirical findings suggest that Korean outward FDI is positively correlated with domestic productivity and this link is likely to take place in those sectors above median competitiveness measured as export-based RCA (Revealed Comparative Advantage). Thus, we find that the empirical results were consistent with previous theoretical predictions as well as our analysis.

Download or read book Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms written by Jonathan Haskel and published by . This book was released on 2002 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Are there productivity spillovers from FDI to domestic firms, and, if so, how much should host countries be willing to pay to attract FDI? To examine these questions we use a plant-level panel covering U.K. manufacturing from 1973 through 1992. Across a wide range of specifications, we estimate a significantly positive correlation between a domestic plant's TFP and the foreign-affiliate share of activity in that plant's industry. This is consistent with positive FDI spillovers. We do not generally find significant effects on plant TFP of the foreign-affiliate share of activity in that plant's region. Typical estimates suggest that a 10 percentage-point increase in foreign presence in a U.K. industry raises the TFP of that industry's domestic plants by about 0.5 percent. We also use these estimates to calculate the per-job value of these spillovers. These calculated values appear to be less than per-job incentives governments have granted in recent high-profile cases, in some cases several times less.

Download or read book The Indirect Effects of Foreign Direct Investment on Trade written by Rodolfo Metulini and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The relationship between international trade and foreign direct investment (FDI) is one of the main features of globalisation. In this paper, we investigate the effects of FDI on trade from a network perspective, since FDI takes not only direct but also indirect channels from origin to destination countries because of firms' incentive to reduce tax burden, to minimise coordination costs and to break barriers to market entry. We use a unique data set of international corporate control as a measure of stock FDI to construct a corporate control network (CCN), where the nodes are the countries and the edges are the corporate control relationships. Network measures, as the shortest path length and the communicability, are then computed on the CCN to capture the indirect channel of FDI. Empirically, we find that corporate control has a positive effect on trade both directly and indirectly. The result is robust with different specifications and estimation strategies. Hence, our paper provides strong empirical evidence of the indirect effects of FDI on trade. Moreover, we identify a number of interplaying factors such as regional trade agreements and the region of Asia. We also find that the indirect effects are more pronounced for the manufacturing sector than for primary sectors such as oil extraction and agriculture.

Download or read book The Effects of Foreign Direct Investment on Domestic Firms written by Jozef Konings and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper uses firm level panel data to investigate empirically the effects of foreign direct investment (FDI) on the productivity performance of domestic firms in three emerging economies of Central and Eastern Europe, Bulgaria, Romania and Poland. To this end a unique firm level panel data set is used with detailed information on foreign ownership at the firm level. Two main questions are addressed in the present paper: (1) do foreign firms perform better than their domestic counterparts? (2) do foreign firms generate spillovers to domestic firms? The estimation technique in this paper takes potential endogeneity of ownership, spillovers and other factors into account by estimating a fixed effects model using instrumental variables in the general methods of moment technique for panel data. Only in Poland, I find that foreign firms perform better than firms without foreign participation. Moreover, for all three countries studied here, I find no evidence of positive spillovers to domestic firms on average. In contrast, on average there are negative spillovers to domestic firms in Bulgaria and Romania, while there are no spillovers to domestic firms in Poland. This suggests a negative competition effect that dominates a positive technology effect.