Sustainability of renewable energy investment motivations during a feed-in-tariff scheme transition: evidence from a laboratory experiment

This study analyzes the effects of a feed-in-tariff (FIT) scheme’s transition on renewable energy investments. We model an individual’s investment decisions as a public goods game where the FIT scheme’s purchasing price acts as a subsidy that lowers the individual’s investment cost. Using a laboratory experiment, we study the effects of a decreasing purchasing price by comparing it to a counterfactual situation where the FIT scheme is not introduced. Although a high purchasing price induces higher investments, this external incentive seems to crowd out an individual’s intrinsic motivation: when the purchasing price decreases to zero, an individual’s investments are lower than they are in the counterfactual situation. Considering the possibility that motivation crowding out has occurred during the FIT phase-out process, it is important to introduce a new policy instrument without a break to stimulate renewable energy investments.

Motherland or home state? Allegiance of the Indian diaspora and its effect on reverse FDI

Purpose – The purpose of this paper is to explore the potential regional preferences of the diaspora and explain how such preferences affect their decision when engaging in reverse Foreign Direct Investment (FDI). Since diasporas often act as conduits for trade and investment, the author is interested in whether these regional preferences affect their choice of destination for FDI. Design/methodology/approach – The author developed and pre-tested a questionnaire that was administered in pen and paper as well as online. Totally, 158 professional, managers and entrepreneurs with Indian diasporic background in the USA and Canada participated in the study. Follow-up interviews were conducted with 25 participants. Findings – Participants indicated that they did not favor their region of origin over the entire country. However, most of the participants only invested in their region of origin. Research limitations/implications – Interviews were based on the original survey questionnaire and did not further probe other issues. The current study should be treated as exploratory in nature and the results should be used as a springboard for future research. Practical implications – It would seem that the region of origin was important in the decision to migrate and for reverse FDI, even though cognitively the participants did not recognize it to the same extent. This might point to a mediation effect, which should be investigated in future studies. This paper helps businesses and governments understand the extent to which sub-national regional ties explain the investment motivations of people investing back in their home countries. Social implications – Furthermore, the importance of regional ties in the decisions to both invest and migrate point to the importance of studying sub-national cultural and institutional issues rather than treating large multicultural countries such as India as a monolithic bloc. Originality/value – The author used network ties theories to investigate and explain the investment behavior of Indian diaspora. While other disciplines (e.g. geography, sociology and economics) might have studied similar phenomena, the author looked and expanded the knowledge from a management perspective.

Refining of FDI motivations by integrating global value chains’ considerations

Purpose – The purpose of this paper is to show how the nature of the activities conducted by multinational enterprises globally and the governance modes are changing. Essentially, multinational enterprises (MNEs) structure and organize their activities in a more complex, fragmented and geographically dispersed manner. In this paper, the authors suggest that the evolution of MNEs and the rising importance of global value chains (GVCs) require a refinement of FDI motivations rather than a drastic change in the existing categories. The authors begin with a historical overview of evolving firms’ international strategies and FDI motivations, before developing arguments to support the view that the fine slicing of economic activities on a global scale, and the combination of governance modalities ought to be integrated into the presentation of investment motivations. The discussion ends with implications for governments and policymaking. Design/methodology/approach – This paper is a conceptual paper. Findings – Key suggestions to refine the presentation of investment motivations are presented, together with policy recommendations. Originality/value – This paper provides a novel approach to ways of refining investment motivations by integrating GVC considerations, and drawing policy implications from this process.