scholarly journals Foreign Direct Investment in Transition Economies: Is It Related to Export Expansion or Import Substitution?

2014 ◽  
Author(s):  
Cevat Gerni ◽  
Selahattin Sarı ◽  
Ömer Selçuk Emsen ◽  
Burhan Kabadayı
Keyword(s):  
Panel Data Analysis ◽  
Import Substitution ◽  
Developed Countries ◽  
Economic Consequences ◽  
Market Potential ◽  
Foreign Direct Investments ◽  
Data Set ◽  
Foreign Investors ◽  
Explanatory Variables ◽  
Developed Economies

It is propounded that there are two motivations behind foreign direct investments (FDI). One of them is to invest in foreign countries because of trade barrier to export. In this case foreign investors operate in import substitution industries (ISI). The second fact to invest in another country away from homeland is to get benefit from cost advantages such as cheap labor and inputs, positioning closed to developed countries. With this aspect foreign investors operate in export oriented sectors (EOS). The economic consequences were discussed lighting on study’s aim examining the FDI to Transitions Countries whether are ISI or EOS. The foreign direct investments to Transitions Countries were investigated by panel data analysis. First and second generation unit root tests and cross section dependency tests were applied. Long and short term regressions were realized. The data set were obtained from Word Bank Data Base and annually data were collected between 1993 and 2012. Theoretically and statistically expected coefficients and coefficient’s sign for explanatory variables have been obtained. It is as a result observed that the countries have higher internal market potential to take foreign direct investments to import substitution industries. The countries close to developed economies have been drawing foreign direct investments to export oriented sectors.

Chinese multinationals’ FDI motivations: suggestion for a new theory

2019 ◽  
Vol 14 (1) ◽  
pp. 70-90 ◽  
Author(s):  
Byung Il Park ◽  
Taewoo Roh
Keyword(s):  
Mergers And Acquisitions ◽  
Multinational Corporations ◽  
Emerging Market ◽  
Developed Countries ◽  
Future Research ◽  
Foreign Direct Investments ◽  
Data Set ◽  
Content Type ◽  
Developed Economies ◽  
Chinese Mncs

Purpose The purpose of this paper is to complement the conventional international business (IB) theory, the OLI perspective, which is good at explaining the foreign direct investments (FDIs) undertaken by developed market multinational corporations (DMNCs). This study also suggests a new theoretical framework, namely, the OILL paradigm, that is able to encompass FDIs from emerging market multinational corporations (EMNCs) toward developed economies. Design/methodology/approach The data comprising 206 Chinese MNCs, which completed international mergers and acquisitions (IMAs), were obtained from Zephyr. By using these data, logical regressions are conducted to statistically confirm that we should not omit the learning motivation if we want to adequately understand the FDI phenomenon by encompassing investment flow from developing (or emerging) to developed countries. Findings The results based on this data set indicate that EMNCs often try to enter developed economies with the motivation to seek sophisticated foreign host knowledge that is not available internally. In particular, they tend to use IMA strategies when they want to learn from heterogeneity (i.e. inter-industry mergers and acquisitions) and absorb advanced technologies from DMNCs. Research limitations/implications By shedding light on the recent new trend in FDI (i.e. FDI from emerging countries to developed economies), the study provides useful theoretical implications, as well as suggesting scholarly contributions. However, we should acknowledge that there are some limitations to this study. First, the study explores only Chinese MNCs. Second, learning motivations need to be minutely and precisely measured by other studies. Third, this study argues that FDI from EMNCs to DMNCs is triggered by the former’s motivation concerning knowledge acquisition. However, the type of knowledge should be considered, and this is perhaps another avenue for future research. Practical implications Conventional IB theories, such as the OLI paradigm and internalization theory, have long sought to answer the question of why DMNCs go for foreign markets, in spite of the presence of the liabilities of foreignness, and focused on their main investment motivations (i.e. market-seeking, efficiency-seeking and resource-seeking motivations). For this reason, these theories do not adequately capture the primary FDI motivations of EMNCs, and consequently, they are unable to see the big picture when it comes to the FDI phenomenon. Based on this idea, the authors complement the well-known triad motivations (i.e. market-seeking, efficiency-seeking and resource-seeking motivations) by adding the knowledge-seeking motive and contribute to the evolution of IB theories by suggesting a new theory, which is the OILL paradigm. Originality/value The study contributes to the extant literature in the field of IB in two key ways. First, it examines EMNCs’ central motivations in conducting FDI where empirical research is sparse. By doing this, this paper attempts to solve the query indicated above (i.e. why MNCs choose FDI in spite of the presence of the liabilities of foreignness), and it offers a new theory (i.e. the OILL paradigm).

scholarly journals Media and Economic Growth: Country Groups Difference via Panel Data

2020 ◽  
Vol 5 (5) ◽  
Author(s):  
Viktoriia Ahapova
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Press Freedom ◽  
Foreign Direct Investments ◽  
Fixed Effects Model ◽  
Data Set ◽  
The Press ◽  
Per Capita

The present article investigates the link between economic growth, namely GDP per capita, and the media activity represented with the indicator of the press freedom alongside other factors such as infrastructure, institutional conditions, and foreign direct investments. A panel of 179 countries was used for the period from 2000 to 2015. In particular, we run two panel data analysis models, fixed effects and random effects models, and examined their output with Hausman’s specification test, which pointed the fixed effects model as more efficient for the presented data set. However due to the presence of serial correlation, heteroskedastic, and cross-panel dependence, a Prais-Winsten regression with panel corrected standard errors (PCSE) was implemented. The comparative analysis of models of four country groups, divided by GNI per capita, was conducted. Both statistically significant correlation coefficients and models’ output provided evidence of an association between economic growth and the press activity.

scholarly journals Linking FDI and Sustainable Environment in EU Countries

2021 ◽  
Vol 14 (1) ◽  
pp. 196
Author(s):  
Adina Dornean ◽  
Irina Chiriac ◽  
Valentina Diana Rusu
Keyword(s):  
Developed Countries ◽  
Ordinary Least Squares ◽  
Business Environment ◽  
Foreign Direct Investments ◽  
Host Countries ◽  
Eu Countries ◽  
Developed Economies ◽  
Sustainable Environment ◽  
Innovation And Technology ◽  
Ease Of Doing Business

The aim of this study is to emphasize the link between the foreign direct investments (FDIs) and the sustainable environment in EU countries. We also focus on investigating the influence of other factors related to business environment on FDIs, considering the investors’ sustainable choice for the host countries, grouped according to FTSE Russell criteria. Using panel methodology and applying Ordinary Least Squares (OLS) method of data analysis, the authors reached the conclusion that a better-rated business environment, with concern for sustainability, has more of a chance to attract larger sums of FDIs, mostly in the case of developed economies. This fact proves that the main advantage considered by a foreign investor in developed EU countries is represented by CO2 emissions (sustainable environment) and a good ease of doing business environment. The study highlights the factors that influence the decision of investing in developed countries, rather than in emerging and frontier ones. This paper contributes to the existing literature by identifying the group of countries which need a more sustainable approach to attract a large amount of FDIs, given that the inflow of FDIs is a crucial factor of economic growth, a possible source of innovation and technology, and a way to reduce poverty.

scholarly journals Fluxos de investimento de portfolio Europeu: o impacto da União Monetária Européia

2010 ◽  
Vol 8 (4) ◽  
Author(s):  
Fernando Seabra ◽  
Tatiana Santos
Keyword(s):  
Developed Countries ◽  
Arch Model ◽  
Host Countries ◽  
Bias Effect ◽  
Data Set ◽  
Explanatory Variables ◽  
Portfolio Holdings ◽  
Extended Gravity ◽  
Information Hypothesis ◽  
Main Determinants

The objective of this paper is to analyse the main determinants of bilateral foreign portfolio investment (FPI) from European countries to host countries, including European Union countries, other developed countries and emerging markets. An FPI model based on an extended gravity equation is estimated from a panel data set over the period 2001-2006. Among the explanatory variables are interest rate differentials, the expected exchange rate uncertainty – estimated by an autoregressive conditional heteroskedasticity (ARCH) model – a dummy variable for the European Monetary Union (EMU) and gravity variables. The results give support for the asymmetric information hypothesis since the EMU variable and geographical and institutional distances are estimated to be significant, indicating a regional “home bias” effect for European portfolio holdings.

scholarly journals The monitoring role of the external ownership and discretionary accruals

2017 ◽  
Vol 14 (2) ◽  
pp. 181-192
Author(s):  
Anas Najeeb Mosa Ghazalat ◽  
Md.Aminul Islam ◽  
Idris Bin Mohd Noor
Keyword(s):  
Earnings Management ◽  
Institutional Investors ◽  
Management Practices ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Discretionary Accruals ◽  
Developed Countries ◽  
Model Parameters ◽  
Foreign Investors

Prior studies have focused on the role that the institutional investors play to control managerial behaviours as one of the factors of the external ownership in the developed countries specifically. Nevertheless, scant attention has given to the external ownership role whether the institutional or the foreign investors to maintain the minority shareholder interest especially with the presence of the central agency problem in the emerging markets such as Jordan. Thus, this study argued the monitoring role of the external ownership factors can minimize the managerial opportunistic behaviours through examining the relationship between external ownership factors and earnings management. Earnings management proxies using the performance-adjusted discretionary accruals model (Kothari et al. 2005 model) by applying the cross-sectional method to determine model parameters for each industry in each year. In order to achieve objectives of this research a sample of 798 firm-observation of the Jordanian non-financial firms listed in ASE during the period 2009-2015 were collected. The random-effect GLS regression model is used after following the correct procedures of the panel data analysis to determine the appropriate model as stated by the results of Hausman and LM tests. Hence, the correcting robust standard errors estimates method was used since the data was suffered from the heteroscedasticity problem. The results show that the institutional ownership in Jordan plays a vital role in mitigating the opportunistic behaviours of managers. Likewise, the existence of foreign ownership in firms minimizes the level of earnings management practices. These support the hypotheses that the institutional and foreign investors are able to control the managers of the firm. Also, provide evidence about the similarities between the role of the foreign investors and the role of institutional investors since there is a shortage of the evidence about foreign investors role especially with earnings management.

scholarly journals Development potentials of foreign direct investments: Comparative international experiences

2009 ◽  
Vol 61 (1-2) ◽  
pp. 48-73 ◽  
Author(s):  
Miroslav Antevski
Keyword(s):  
Developing Countries ◽  
Financial Markets ◽  
Good Governance ◽  
Developed Countries ◽  
Local Market ◽  
Foreign Direct Investments ◽  
Foreign Investors ◽  
Infrastructure Networks ◽  
Main Development ◽  
Legislative Reforms

In this paper the author analyses the main development potentials of foreign direct investments in different world regions. They are real and evident, but not always exploited. It is found out that the developed financial markets, good governance, developed institutions and the size of country have a great impact on the location choices of foreign investors. In developing countries economic, administrative and legislative reforms, as well as developed infrastructure networks, should improve a country's attractiveness for FDIs. In most countries, FDIs are concentrated in developed regions and sell the greatest share of their production on the local market. One of their parts is export-oriented, but at the same time, they are great importers from developed countries. The extent of spillovers is modest in most cases.

The Influence of Growth, Asset Tangibility, Cost of Debt, Profitability and Business Risk On Debt Capital

2019 ◽  
Vol 4 (4) ◽  
pp. 120-127
Author(s):  
Erika Jimena Arilyn ◽  
Beny Beny
Keyword(s):  
Firm Growth ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Developed Countries ◽  
Jel Classification ◽  
Cost Of Debt ◽  
Market Condition ◽  
Business Risk ◽  
Debt Capital

Objective –The aims to identify the significant factors that influence a company’s decision to use debt capital. Methodology/Technique – This study uses 5 independent variables namely; firm growth (growth rate in total gross assets), asset tangibility (ratio of net fixed assets to total assets), cost of debt (interest before tax / long term debt), profitability (Earnings Before Interest and Taxes (EBIT) / Total Asset), and business risk (standard deviation of EBIT to total assets). The dependent variable in this study, debt capital, is measured by the ratio of long-term debt to total assets. A purposive sampling method is used to select 11 out of 18 textile and garment companies listed on the Indonesian Stock Exchange between 2014 and 2018 that report their annual financial positions. A quantitative method, panel data analysis technique and SPSS tools were also used in this study. Findings – The results show that debt capital is influenced by profitability, while the remaining factors do not influence debt capital. Novelty – This study adds to the existing literature on internal factors, market condition as an external factors, and debt capital in developed countries. The benefit of this study is to explore the potential capabilities of the industry in using its profit to minimize the use of debt as a source of capital to decrease business risk. Type of Paper: Empirical Keywords: Profitability; Growth; Cost of Debt; Business Risk; Tangibility; Capital Structure. Reference to this paper should be made as follows: Ariyln, E., J; Beny; 2019. The Influence of Growth, Asset Tangibility, Cost Of Debt, Profitability and Business Risk On Debt Capital, Acc. Fin. Review 4 (4): 120 – 127 https://doi.org/10.35609/afr.2019.4.4(4) JEL Classification: G23, G32.

Growth and Social Capital: Empirical Analysis of the Relationship

2019 ◽  
pp. 128-134
Author(s):  
Ksenia V. Bagmet
Keyword(s):  
Economic Growth ◽  
Social Capital ◽  
Economic Development ◽  
Social Development ◽  
Empirical Analysis ◽  
Panel Data Analysis ◽  
Well Being ◽  
Developed Countries ◽  
International Institute ◽  
Level Of Economic Development

The article provides an empirical test of the hypothesis of the influence of the level of economic development of the country on the level of development of its social capital based on panel data analysis. In this study, the Indices of Social Development elaborated by the International Institute of Social Studies under World Bank support are used as an indicators of social capital development as they best meet the requirements for complexity (include six integrated indicators of Civic Activism, Clubs and Associations, Intergroup Cohesion, Interpersonal Safety and Trust, Gender Equality, Inclusion of Minorities), comprehensiveness of measurement, sustainability. In order to provide an empirical analysis, we built a panel that includes data for 20 countries divided into four groups according to the level of economic development. The first G7 countries (France, Germany, Italy, United Kingdom); the second group is the economically developed countries, EU members and Turkey, the third group is the new EU member states (Estonia, Latvia, Lithuania, Romania); to the fourth group – post-Soviet republics (Armenia, Georgia, Russian Federation, Ukraine). The analysis shows that the parameters of economic development of countries cannot be completely excluded from the determinants of social capital. Indicators show that the slowdown in economic growth leads to greater cohesion among people in communities, social control over the efficiency of distribution and use of funds, and enforcement of property rights. The level of tolerance to racial diversity and the likelihood of negative externalities will depend on the change in the rate of economic growth. Also, increasing the well-being of people will have a positive impact on the level of citizens’ personal safety, reducing the level of crime, increasing trust. Key words: social capital, economic growth, determinant, indice of social development.

scholarly journals Dynamic pricing with demand disaggregation for hotel revenue management

2021 ◽  
Author(s):  
Andrei M. Bandalouski ◽  
Natalja G. Egorova ◽  
Mikhail Y. Kovalyov ◽  
Erwin Pesch ◽  
S. Armagan Tarim
Keyword(s):  
Dynamic Pricing ◽  
Programming Model ◽  
Computer Experiments ◽  
Price Policy ◽  
Linear Constraints ◽  
Economic Consequences ◽  
Elastic Model ◽  
Computationally Efficient ◽  
Data Set ◽  
Dynamic Price

AbstractIn this paper we present a novel approach to the dynamic pricing problem for hotel businesses. It includes disaggregation of the demand into several categories, forecasting, elastic demand simulation, and a mathematical programming model with concave quadratic objective function and linear constraints for dynamic price optimization. The approach is computationally efficient and easy to implement. In computer experiments with a hotel data set, the hotel revenue is increased by about 6% on average in comparison with the actual revenue gained in a past period, where the fixed price policy was employed, subject to an assumption that the demand can deviate from the suggested elastic model. The approach and the developed software can be a useful tool for small hotels recovering from the economic consequences of the COVID-19 pandemic.

Intergenerational Earnings Mobility in Italy

2007 ◽  
Vol 7 (2) ◽  
Author(s):  
Sauro Mocetti
Keyword(s):  
Labor Market ◽  
Least Squares ◽  
Household Income ◽  
Intergenerational Mobility ◽  
Least Squares Method ◽  
Developed Countries ◽  
Data Set ◽  
Labor Market Success ◽  
Term Labor

Abstract This paper contributes to the growing number of studies on intergenerational mobility by providing a measure of earnings elasticity for Italy. The absence of an appropriate data set is overcome by adopting the two-sample two-stage least squares method. The analysis, based on the Survey of Household Income and Wealth, shows that intergenerational mobility is lower in Italy than it is in other developed countries. We also examine the reasons why the long-term labor market success of children is related to that of their fathers.

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