Multinational Capital Budgeting: Foreign Investment under Subsidy

1982 ◽  
Vol 25 (1) ◽  
pp. 22-32
Author(s):  
Sara L. Gordon ◽  
Francis A. Lees
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Capital Budgeting ◽  
Cash Flows ◽  
The U.S

Multinational capital budgeting bases foreign direct investment upon ownership, internalization, and locational advantages. These may be linked to a capital-budgeting analysis of an investment's cash flows and profitability. Volkswagen's recent investment in the U.S. is considered.

scholarly journals International Trade and Foreign Direct Investment as Innovation Factors of the U.S. Economy

2014 ◽  
Vol 41 (1) ◽  
pp. 60-75
Author(s):  
Tomasz M. Napiórkowski
Keyword(s):  
Foreign Direct Investment ◽  
International Trade ◽  
Direct Investment ◽  
Positive Impact ◽  
The United States ◽  
Annual Data ◽  
Main Portion ◽  
The Impact ◽  
Total Impact ◽  
The U.S

Abstract The aim of this research is to asses the hypothesis that foreign direct investment (FDI) and international trade have had a positive impact on innovation in one of the most significant economies in the world, the United States (U.S.). To do so, the author used annual data from 1995 to 2010 to build a set of econometric models. In each model, 11 in total) the number of patent applications by U.S. residents is regressed on inward FDI stock, exports and imports of the economy as a collective, and in each of the 10 SITC groups separately. Although the topic of FDI is widely covered in the literature, there are still disagreements when it comes to the impact of foreign direct investment on the host economy [McGrattan, 2011]. To partially address this gap, this research approaches the host economy not only as an aggregate, but also as a sum of its components (i.e., SITC groups), which to the knowledge of this author has not yet been done on the innovation-FDI-trade plane, especially for the U.S. Unfortunately, the study suffers from the lack of available data. For example, the number of patents and other used variables is reported in the aggregate and not for each SITC groups (e.g., trade). As a result, our conclusions regarding exports and imports in a specific SITC category (and the total) impact innovation in the U.S. is reported in the aggregate. General notions found in the literature are first shown and discussed. Second, the dynamics of innovation, trade and inward FDI stock in the U.S. are presented. Third, the main portion of the work, i.e. the econometric study, takes place, leading to several policy applications and conclusions.

Does foreign direct investment influence R&D activity in the host country? Evidence from Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Van Ha ◽  
Mark J. Holmes ◽  
Gazi Hassan
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Probit Model ◽  
Innovation Activity ◽  
Heckman Selection Model ◽  
Content Type ◽  
Domestic Firms ◽  
The Impact ◽  
Local Firms

PurposeThis study focuses on the linkages between foreign direct investment and the research and development (R&D) and innovation activity of domestic enterprises in Vietnam.Design/methodology/approachThe Heckman selection model approach is applied to a panel dataset of nearly 7,000 Vietnamese firms for the 2011–2015 study period to investigate the impact of foreign presence on the R&D of local firms through horizontal and vertical linkages. Probit model estimation is employed to examine how foreign investment influences the innovation activity of local companies.FindingsWhile there are a small number of firms carrying out R&D activities in Vietnam, foreign or joint domestic–foreign venture firms are less inclined than domestic firms to undertake R&D. Domestic factors that include capital, labor quality, location and export status of firm have a significant effect on the decision of domestic firms to participate in R&D activity. Only forward linkages and the gross firm output are found to have an impact on the R&D intensity of domestic enterprises, while other factors appear to have no significant influence on how much firms spend on R&D activities.Practical implicationsIn order to promote the R&D activity of domestic firms, policy should focus on (1) the backward linkages between local firms in downstream sectors with their foreign suppliers in upstream sectors, and (2) the internal factors such as labor, capital or location that affect the decisions made by domestic firms.Originality/valueGiven that foreign investment may affect R&D and innovation activity of local firms in host countries, the impact is relatively unexplored for many emerging economies and not so in the case of Vietnam. The availability of a unique survey on Vietnamese firm technology and competitiveness provides the opportunity to address this gap in the literature.

scholarly journals A History of FDI in Hydropower Development in Nepal

2016 ◽  
Vol 18 ◽  
pp. 22-24 ◽  
Author(s):  
Kamal Raj Dhungel
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Aid ◽  
Foreign Investment ◽  
Direct Investment ◽  
Hydropower Project ◽  
Hydropower Development ◽  
History Of

In Nepal, hydropower is an obvious target for foreign aid and foreign investment. To date, a number of notable hydropower projects were constructed through foreign aid and that history dates back to 1911, when the Britain supported the Pharping hydropower project near Kathmandu. Today, India, China, USA and Norway are investigating the prospects for Nepali hydropower development. This paper traces this history of Foreign Direct Investment (FDI) in Nepal. HYDRO Nepal Journal of Water Energy and EnvironmentVolume- 18, 2016, JanuaryPage -22 to 24

scholarly journals Allocation of foreign direct investment across brazilian states

2013 ◽  
Vol 43 (2) ◽  
pp. 241-269 ◽  
Author(s):  
Maurício Mesquita Bortoluzzo ◽  
Sergio Naruhiko Sakurai ◽  
Adriana Bruscato Bortoluzzo
Keyword(s):  
Foreign Direct Investment ◽  
Panel Data ◽  
Foreign Investment ◽  
Direct Investment ◽  
Transport Infrastructure ◽  
Market Size ◽  
Consumer Market ◽  
Determining Factors ◽  
Econometric Study

Foreign direct investment (FDI) has become increasingly important for the Brazilian economy: the ratio of FDI inflow to the country's gross domestic product (GDP) increased from a 0.6% average in the 1980's to 2.5% from 2001 to 2010, according to data from UNCTAD. However, there is great inequality in the distribution of this investment among Brazilian federation units. This study aims at investigating the determining factors for the location of foreign direct investment across Brazilian states, based on an econometric study with panel data for the years 1995, 2000 and 2005. The results showed that foreign investment responded positively to consumer market size, quality of labor and transport infrastructure, but negatively to cost of labor and tax burden.

scholarly journals The Attitudes of the European Union and China Towards Foreign Direct Investment: Implications for Bilateral Relations

2019 ◽  
Vol 22 (3) ◽  
pp. 83-98
Author(s):  
Janina Witkowska
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Member States ◽  
Independent State ◽  
Eu Countries ◽  
Eu Member States ◽  
Bilateral Relations ◽  
New Eu Member States ◽  
The Eu

The aim of this paper is to discuss new trends that have occurred in the policies of the EU and China towards foreign direct investment (FDI), to examine some implications of the EU‑China Comprehensive Agreement on Investment (CAI) – which is currently being negotiated – for their bilateral relations, and to assess the role which China’s “One Belt One Road’ (OBOR) initiative might play in its relations with the new EU Member States. The EU established freedom of capital movement with third countries; however, the introduction of the common investment policy has encountered some obstacles. These are related to investor protection and ISDS issues. In turn, China is carrying out an independent state policy towards foreign investment with limited liberalization of FDI flows. The negotiated EU‑China CAI is expected to create conditions conducive to bilateral foreign investment flows, and it might bring positive effects for their economies in the future. However, the progress made thus far in the negotiations is still limited. The relations between China and the new EU Member states (CEE countries) are characterized by common interests in the field of FDI flows. The new EU countries are interested in attracting Chinese FDI and seem not to show the fears that have arisen in the old EU countries.

scholarly journals FEATURES OF GLOBAL INVESTMENT POLICY: MODERN TRENDS AND PROSPECTS

2019 ◽  
pp. 142-148
Author(s):  
Larisa Germanovna Chuvakhina
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
World Economy ◽  
International Investment ◽  
Investment Policy ◽  
Investment Promotion ◽  
The Us ◽  
The World

The article highlights the current problems of investments in the development of the world economy, when international investment needs are significantly high. The priority is given to the issues of investment resources for achieving the goals of sustainable development of the world economy. It has been stated that for creating the effective economic policy, the countries need to attract foreign investment. The current trends in the development of global market for foreign direct investment flows are examined. The flows of global foreign direct investment in 2017-2018 are analyzed. Special attention is given to the study of the US investment policy. The reduction in US investments into the Russian economy in terms of the sanctions policy against Russia is marked. The changes in the investment policy of the administration of D. Trump in terms of strengthening American protectionism are underlined. The issues of US-EU investment cooperation are considered. The role of the US Federal Reserve in regulating the activities of foreign companies in the US market is defined. The main decisions taken at the X World Investment Forum of the United Nations Conference on Trade and Development in October, 2018 are considered. The role of investment promotion agencies is defined as one of the tools to attract foreign investments into the country's economy. The decrease in the level of international investment and increased competition between countries for attracting foreign investment is stated. The study confirms that the investment attractiveness of the country, stability of the national financial system, and legal security of business play a decisive role in attracting foreign direct investment.

scholarly journals Relationship Economic Growth with Foreign Direct Investment

2020 ◽  
Vol 3 (3) ◽  
pp. 49-68
Author(s):  
Prince Charles Heston Runtunuwu
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Positive Impact ◽  
Secondary Data ◽  
Causality Test ◽  
Long Run ◽  
Causality Relationship ◽  
The One

This study aims to determine the one-way causality relationship between foreign investment and economic growth, a one-way causality relationship between economic growth and foreign investment, and a two-way causality relationship between foreign investment and economic growth in Indonesia. This was conducted in Indonesia, the data are secondary data taken using the method time series from 1971 to 2018 from the official websites, the Investment Coordinating Board, and literature sources, Foreign Investment and Gross Domestic Product. (1) in the long run the Economic Growth variable has a significant effect on Foreign Direct Investment, and vice versa; and (2) the Foreign Direct Investment variable has a significant effect on Economic Growth; (3) in the short term, the Economic Growth variable has an influence on Foreign Direct Investment, and vice versa; and the Foreign Direct Investment variable has an influence on Economic Growth. It is possible to have a better long-term relationship, bringing positive impact on economic growth in Indonesia when investment in Indonesia increases. Conversely, when economic growth decreases, it means that foreign investment is also low. Granger Causality test, shows a two-way causality relationship between Economic Growth and Foreign Direct Investment and vice versa. It is necessary to maintain growth to attract foreign direct investment, as well as foreign investment. Investment climate needs to be improved enabling to invest in Indonesia.

scholarly journals Attracting Foreign Direct Investment into the country using marketing technologies

2020 ◽  
pp. 52-64
Author(s):  
Torekhan ZHUMAGUL ◽  
Laura ASHIRBEKOVA
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Scientific Literature ◽  
Digital Marketing ◽  
Scientific Interest ◽  
Effective Form ◽  
The Right ◽  
Marketing Methods

The purpose of the study is to prove ways to determine an effective marketing technologies for the country in attracting foreign direct investment and to determine an effective form of organization for promotion agency. The authors developed and used marketing methods and effective methods of digital marketing to attract foreign direct investment to the country. The article emphasizes the attraction of investment in order to form scientific interest in this topic, as well as contributes to the development of scientific literature. As attracting foreign investment is a matter of policy and the situation in the country, the developed proposals are useful for promotion agencies. As a result of the study, it was proved that the use of digital marketing is effective for attracting foreign direct investment and forming an image, it was also proved to choose the right form of organization for promotion agency.

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