Tagged: Foreign investment

The International Investment Regime and Foreign Investor Rights

The international investment regime (IIR) continues to be a subject of an intense debate. After a first wave of criticism, investment arbitration and awards have shown some changes in areas such as transparency and deference. However, the calls for reform have not ceased; to the contrary, they have exacerbated. Most critical research continues denouncing investment arbitration as a way of settling foreign investment disputes. Those who defend the IIR in turn claim that the use of proportionality can resolve most of the existing concerns in this field.

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The Effects of Trade and Investment Liberalization on Korea’s FDI

While most of RTA talks have incorporated rules on industrial tariff and non-tariff barriers, services, and trade remedies in the past, countries now seek to co-operate on other areas of policymaking, such as rules on investment. This article provides detailed analysis on the effects of trade and investment liberalization on Korea’s inward and outward foreign direct investment (FDI) by collecting all relevant information on substantive investment provisions contained in all Korea FTAs in force as May 2013 and constructing indices of the extensiveness of investment provisions.

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Implications of China’s on-going dependence on foreign technology

This paper examines the on-going high level of dependency of China’s economy on foreign sources of technology during the period since accession to the World Trade Organisation (WTO). Because this dependency is a major cause of concern for China’s leaders and policymakers, they have sought to shift the direction of the economy particularly since 2006 towards a greater focus on indigenous innovation. Achieving such a major transformation, however, in an era when much of China’s economic activity has become integrated within the global value chains of major corporations, is very challenging, and the evidence to date suggests only a modest level of success on the part of Chinese companies to substitute for the on-going dominant position of foreign companies particularly in China’s high technology sectors. Some progress has been made, however, in the private sector’s share of economic activity in contrast to the declining share of State Owned Enterprises (SOEs).

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The Role of International Development Finance Institutions in Financing Infrastructure in Africa and Its Implications for Korea

This study surveys the types and amount of financial resources that multilateral and bilateral DFIs provide for Africa, and makes an in-depth analysis of major projects in Africa financed by them. Moreover, this study explores how Korean ECAs and investors collaborate with international financial institutions to provide increased funding for Africa’s infrastructure development projects.

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Implications of China’s on-going dependence on foreign technology

This paper examines the on-going high level of dependency of China’s economy on foreign sources of technology during the period since accession to the World Trade Organisation (WTO). Because this dependency is a major cause of concern for China’s leaders and policymakers, they have sought to shift the direction of the economy particularly since 2006 towards a greater focus on indigenous innovation. Achieving such a major transformation, however, in an era when much of China’s economic activity has become integrated within the global value chains of major corporations, is very challenging, and the evidence to date suggests only a modest level of success on the part of Chinese companies to substitute for the on-going dominant position of foreign companies particularly in China’s high technology sectors.

Full-text available in .pdf

Institutional Impact of Foreign Direct Investment in China

China’s success in attracting high levels of foreign direct investment (FDI) has drawn a lot of attention from around the world, and so has the fast growth of Chinese regions that have enjoyed the lion’s share of the FDI inflow. The specific mechanisms through which FDI has benefited the country’s economic development, however, are less clear than the spectacular growth in both the capital flow and the economy.

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Governance and Globalisation / Koen Berden, Jeffrey Bergstrand, Eva van Etten

Abstsract:
Unlike the large literature on ‘democracy and trade’, there is a much smaller literature on the effect of the level of democracy in a nation on the level of its foreign direct investment (FDI) inflow. These few studies reveal mixed empirical results, and surprisingly only one study has examined bilateral FDI flows. Moreover, few of these studies use multiple governance indicators separating the ‘pluralism’ effect of democratic institutions from the ‘good governance’ effect, there are no studies on democratic institutions’ various effects on the level of FDI relative to trade, and there are no studies of democratic institutions’ various effects on the selection of countries into FDI. We focus on three contributions. First, we examine the simultaneous effects of the World Bank’s (six) Worldwide Governance Indicators (WGIs) – which allow separating the effects of pluralism from those of five other good governance measures – on bilateral trade, FDI and FDI relative to trade using state-of-the-art gravity specifications. Second, we find strong evidence that – after accounting for host governments’ effectiveness in various roles of good governance – a higher level of pluralism as measured by the WGIs’ Voice and Accountability Index reduces trade levels, likely by increasing the ‘voice’ of more protectionist less-skilled workers, but not FDI levels. Moreover, we find qualitatively different effects of other WGIs – such as political stability – on trade versus FDI flows. Third, we account for firm heterogeneity alongside a large number of zeros in bilateral FDI flows using recent advances in gravity modelling. We distinguish between the (country) intensive and extensive margins and show that pluralism affects FDI inflows negatively at the intensive margin, but positively at the extensive margin.

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