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FDI

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Full-Text Articles in International Economics

Deal Breaker: How Tariff Barriers Affect Cross-Border Mergers And Acquisitions, Heberto Limas-Dominguez Jan 2018

Deal Breaker: How Tariff Barriers Affect Cross-Border Mergers And Acquisitions, Heberto Limas-Dominguez

Undergraduate Honors Theses

This study examines the effects of tariff barriers on cross-border Mergers and Acquisition (M&A) investment and shows how tariffs impact M&A deal value. Since the 1990s, we saw a decline in tariff rates for most nations coinciding with a sharp rise in cross-border M&A. The rise in cross-border M&A has significant implications on various issues from antitrust to foreign direct investment. To analyze the effect of tariff barriers, I use a panel dataset primarily obtained from Bloomberg and UNCTAD. I employ a gravity model to allow for distance and macroeconomic effects along with a poisson distribution ...


Diverse Development Effects Of Foreign Direct Investment In Africa, Nikolai Sie Jan 2018

Diverse Development Effects Of Foreign Direct Investment In Africa, Nikolai Sie

Undergraduate Honors Theses

This study estimates the effect of Foreign Direct Investment (FDI) on development between 2003 and 2016 in Africa. To capture diverse development effects, it uses several outcome variables and focuses on GDP per capita, school enrollment, life expectancy, the share of the population using the internet, the number of bank branches, and the number of bank depositors. The effect on GDP per capita is positive and economically significant, representing about 10% of growth over the period. The effect on enrollment is negative and economically significant, and this finding is reinforced by an analysis on child labor data. The effect on ...


The Impact Of Mnc Involvement On The Lives Of Workers In Developing Economies Of Latin America, Gabriel Moss Jun 2017

The Impact Of Mnc Involvement On The Lives Of Workers In Developing Economies Of Latin America, Gabriel Moss

WWU Honors Program Senior Projects

It is clear that multinational corporations (MNCs) have significant impact in the growth trajectory of developing countries. The nature of this relationship, however, is heavily debated. What is the downstream impact from MNCs on the lives of workers in developing countries? Are countries perversely incentivized to repress and exploit their unskilled labor forces to attract investment? Do multinationals promote better working conditions and raise standards of living for workers? In this essay, I argue that multinationals have the potential to bring massive benefits to the working class in developing countries. If the government of the host country develops strong linkage ...


Three Essays On Financial Constraints And Foreign Direct Investment, Todd Sarnstrom Ii Dec 2016

Three Essays On Financial Constraints And Foreign Direct Investment, Todd Sarnstrom Ii

Dissertations

This three–essay dissertation makes contributions to the literature on foreign direct investment (FDI) and its relationship with collateral and the exchange rate. FDI refers to an investment made by a firm to establish or acquire a long–lasting interest in another firm operating outside its home country. Often, FDI involves substantial fixed costs that require the investing firm to seek external financing. Collateral has been identified as an important factor in the external financing of FDI. Firms lacking collateral are constrained in their ability obtain external financing. Exchange rates have also been identified as a factor in FDI. Exchange ...


Institutions, Distance, And Foreign Direct Investment, Charles Coffman Jan 2015

Institutions, Distance, And Foreign Direct Investment, Charles Coffman

Honors Theses

In this paper, I examine institutional differences between countries and the effect that those differences have on FDI flows using data from 193 countries and ten institutional indicators from the Index of Economic Freedom. I find a statistically significant result for five institutional distance variables. My results also support existing literature that claims that strong institutions increase FDI flows. I found that strong institutions are negatively associated with FDI inflows to low income countries, with the exception of trade and natural resources, suggesting that firms are investing in low income countries for natural resources and cheap production that can be ...


Eu-China Economic Relations: Interactions And Barriers, Zheng Lu Nov 2014

Eu-China Economic Relations: Interactions And Barriers, Zheng Lu

Zheng Lu (Chinese: 路征)

EU-China economic interactions became more and more frequent in the past decades, nowadays EU and China are main trade partner for each other. This paper analyzed EU-China economic interactions from three dimensions: bilateral governmental interactions, trade and investment flows as well as barriers to trade and investment. Findings show that EU-China close relationship is particularly based on goods trade especially on intra-industrial trade of manufacturing industrial products, and trade imbalance is arising from trade in Machinery and Transport Equipment and Other Manufactured Goods (e.g., Clothing and clothing accessories); This paper also found that there exist a myriad of trade ...


How Is Sectoral Fdi Affecting Firms’ Performance In Mozambique?, Nilza A. Abdurramane May 2014

How Is Sectoral Fdi Affecting Firms’ Performance In Mozambique?, Nilza A. Abdurramane

Master's Theses

I study the effect of sectoral FDI on firms’ performance in Mozambique from 2007 to 2010 through productivity and efficiency functions, using comprehensive firm level data. Although foreign ownership has a positive effect on firms’ productivity, my results show that in general, sectoral FDI has a negative and statistically significant effect on Mozambican firms’ productivity. The findings of this study are similar to previous studies that argued that positive foreign spillovers were not automatic. Using a stochastic frontier model, to measure efficiency, I find that in general foreign firms tend to be more efficient than domestic firms. However, using this ...


Delayed Complementarity: How Schengen Area Membership Influenced German And Austrian Investment In Central And Eastern Europe, Romy L. Franks Jan 2014

Delayed Complementarity: How Schengen Area Membership Influenced German And Austrian Investment In Central And Eastern Europe, Romy L. Franks

Claremont-UC Undergraduate Research Conference on the European Union

This paper considers the mutually beneficial relationship of German and Austrian foreign direct investment (FDI) in Central and Eastern Europe (CEE) between 2004 and 2007, and the impact that the CEE states' belated membership in the Schengen Area had on further economic integration. It analyzes how excluding CEE member states from immediate membership in the Schengen Area upon their accession to the EU in 2004 and 2007 affected the economies of Germany, Austria, and the CEE member states. The paper argues that, in reviewing actual FDI and migration numbers following EU enlargements, fears over the potentially negative effects of labor ...


Fdi Spillovers In Tanzania`S Manufacturing Sector, Johansein Rutaihwa Jun 2013

Fdi Spillovers In Tanzania`S Manufacturing Sector, Johansein Rutaihwa

Johansein Rutaihwa

Using cross sectional data, this study analyses the spillover effects of foreign direct investment in Tanzania’s manufacturing sector. The findings reject a proposition that FDI intensity has improved domestic manufacturing firms productivity; no vertical technological spillovers occurred and a negative correlation between vertical spillover and FDI presence was found. Instead there is a positive correlation between FDI and horizontal technology spillover. The study, therefore, recommends that the government should make concerted efforts to ensure that FDI promotion addresses technology spillovers both within the industry and across the sector; as well as strengthening and widening the education system to enable ...


Examining The Institutional Framework For Investment In Tanzania: A Perspective From The Executive Opinion Survey, 2012-13, Johansein L. Rutaihwa Apr 2013

Examining The Institutional Framework For Investment In Tanzania: A Perspective From The Executive Opinion Survey, 2012-13, Johansein L. Rutaihwa

Johansein Rutaihwa

This policy brief looks at the country-level findings from the 2012/13 Global Competiveness Report prepared for the World Economic Forum; highlights the current institutional set up in relation to investment; and identifies institutional and policy reforms that could stimulate growth and make Tanzania more competitive on the global market.


Output And Interest Rate Volatility As Determinants Of Fdi, Lilia Cavallari, Stefano D'Addona Jan 2012

Output And Interest Rate Volatility As Determinants Of Fdi, Lilia Cavallari, Stefano D'Addona

Lilia Cavallari

This paper examines the role of country-specific sources of output and interest rate volatility in driving FDI activities. Building on a dataset that comprises bilateral FDI flows among 24 OECD economies over the period 1985-2007, we find that output and interest rate volatility mainly act as push factors, i.e. they are more effective in deterring rather than encouraging foreign investments. A rise in host country volatilities does reduce the amount of FDI outflows in the recipient country, even after controlling for the state of the cycle. Source country volatilities, on the contrary, do not have a systematic effect on ...


Three Essays On Fdi In China, Mingming Pan Apr 2011

Three Essays On Fdi In China, Mingming Pan

Dissertations, Theses, and Student Research from the College of Business

Foreign Direct Investment (FDI) has contributed a great deal to China’s extraordinary growth by injecting capital into the economy, creating jobs, transferring technology and knowledge, enhancing trade, bringing in competition for local enterprises, improving the quality of local labor and intermediate goods suppliers, and connecting China’s gradually opening economy to the global market. For over a decade, China has been the second largest recipient of inward FDI in the world behind the United States. In 2009, China received $95 billion, which is 8.5% of the world’s total. However, the large amount of inward FDI has been ...


The Effects Of Economic Factors In Determining The Transition Process In Europe And Central Asia, David A. Lopez Jan 2010

The Effects Of Economic Factors In Determining The Transition Process In Europe And Central Asia, David A. Lopez

Award Winning Economics Papers

This paper examines how economic determinants affect foreign direct investment into a sample of Western European and transition countries from 1990 to 2003. The observed differences in the flow of foreign investment into the transition countries, relative to those in Western Europe, provokes the question of whether this phenomenon was determined by the economic factors present in those countries. Using a conceptual model constructed from economic factors that affect FDI inflows, this study considers the sample set for two sub-periods in the transition process, namely the early period from 1990 to 1998 and the later period from 1998 to 2003 ...


Trade, Foreign Direct Investment, Privatization, And Economic Growth, Hang Thu Nguyen Jan 2010

Trade, Foreign Direct Investment, Privatization, And Economic Growth, Hang Thu Nguyen

Economics Graduate Theses & Dissertations

This thesis tries to enhance our understanding of the role of trade liberalization as it relates to economic growth and the factors affecting trade liberalization in various countries. In addition, this thesis deals with the problem of endogeneity with various econometric methods.

Chapter 2 presents a study of the impact of trade liberalization policy on economic growth with the simultaneous application of privatization policy in 25 transitional countries. The analysis applies two stage least squares (2SLS) to panel data from 1994 to 2006 for these 25 countries. The estimated results provide evidence of a significantly positive effect of both trade ...


The Investigation Of Foreign Direct Investment Patterns In Russia, Tamilla Curtis, Tom Griffin, Lucyna Kornecki Dec 2009

The Investigation Of Foreign Direct Investment Patterns In Russia, Tamilla Curtis, Tom Griffin, Lucyna Kornecki

Dr. Tamilla Curtis

No abstract provided.


Exports And Productivity Selection Effects For Dutch Firms, Henk Lm Kox, Hugo Rojas Romogosa Dec 2009

Exports And Productivity Selection Effects For Dutch Firms, Henk Lm Kox, Hugo Rojas Romogosa

Henk LM Kox

The paper tests whether recent theories of international trade with heterogeneous firms can explain the export patterns in Dutch firm- and plant- level data in manufacturing and services. Recent trade models with heterogeneous firms predict that the export decision of firms is affected by sunk entry costs in foreign markets, with only the most productive firms self-selecting into exports. We test a latent variable model of the export decision by probit regressions and standard OLS panel regressions. Our results support the self-selection prediction. The process further appears to be conditioned by scale effects, market structure and multinational affiliation. Regarding alternative ...


Globalization And The Wage-Working Conditions Relationship: A Case Study Of Cambodian Garment Factories, Cael Warren May 2009

Globalization And The Wage-Working Conditions Relationship: A Case Study Of Cambodian Garment Factories, Cael Warren

Economics Honors Projects

The wage premiums for firm-level foreign exposure (exporting and foreign ownership) have been well documented in the literature, and their potential sources have been studied in depth. Compensating differentials and efficiency wages are two distinct explanations (with radically different implications for worker welfare) for wage gaps that persist between firms despite controls for firm and worker characteristics. We use a comprehensive dataset of working conditions and wage compliance in Cambodia’s exporting garment factories to explore (1) the impact of foreign ownership on wages and working conditions, (2) whether the relationship between wages and working conditions within these exporting factories ...


Is The Impact Really That High? The Effect Of Fdi In Transition, Jan Hagemejer, Joanna Tyrowicz Jan 2009

Is The Impact Really That High? The Effect Of Fdi In Transition, Jan Hagemejer, Joanna Tyrowicz

Joanna Tyrowicz

Literature is not clear on the effect of FDI on the economic performance in hosting countries. The analysed eects include productivity, propensity to export, access to financial markets, etc. Although foreign subsidiaries usually perform better than the average of the hosting economies, sometimes the selection eect is found to be considerable. The analysed eects In this paper we use a unique dataset based on accounting annual reports to the statistical authorities by all medium and large Polish enterprises over a period 1997-2006. We apply a propensity score matching technique to disentangle the effect of self-selection and FDI entry (treatment). We ...


Who Really Made Your Car?: Restructuring And Geographic Change In The Auto Industry, Thomas H. Klier, James M. Rubenstein Jan 2008

Who Really Made Your Car?: Restructuring And Geographic Change In The Auto Industry, Thomas H. Klier, James M. Rubenstein

Upjohn Press

The authors present the key characteristics of the vast network of auto parts suppliers and describe the changing geography of U.S. motor vehicle production at the local, regional, national, and international levels.


Foreign Direct Investment In The United States: Issues, Magnitudes, And Location Choice Of New Manufacturing Plants, Jan Ondrich, Michael J. Wasylenko Jan 1993

Foreign Direct Investment In The United States: Issues, Magnitudes, And Location Choice Of New Manufacturing Plants, Jan Ondrich, Michael J. Wasylenko

Upjohn Press

What effect does foreign direct investment (FDI) have on job creation, wages, and productivity in the U.S.? How does FDI impact the budget deficit? How do changes in states' fiscal policy affect plant location choices? Ondrych and Wasylenko address these and other politically-charged questions concerning FDI. Provided is empirical evidence drawn from a pooled cross-section and time-series data set that identifies the criteria foreigners use to make location decisions. The authors also develop a model, against which they compare their findings, and review policy options available at the state and federal levels. Information provided will help states shape, focus ...