OECD\u27s FDI Regulatory Restrictiveness Index: Revision And Extension To More Economies

This paper provides a revised measure of regulatory restrictions on inward foreign direct investment (FDI) for OECD countries and extends the approach to 13 non-member countries. The methodology is largely similar to that adopted in the previous version of the OECD indicator and covers three broad categories of restrictions: limitations on foreign ownership, screening or notification procedures, and management and operational restrictions. The FDI restrictiveness indicator captures statutory deviations from national treatment , i.e. discrimination against foreign investment. When combined with other factors having an influence on foreign investment decisions, it has proven to be a good predictor of countries\u27 inward FDI performance

Policies with Respect to Foreign Investors in the New Member States of the European Union and in the Developing Countries of Asia: A Comparative Aspects

The purpose of this article is to provide a comparative analysis of policies aimed at foreign investors in the new member states of the European Union as well as in the developing countries of Asia. The policies demonstrate certain similarities in spite of the fact that the analyzed world economic regions are subject to different conditions. A common feature is the opening up of economies to foreign investors, coupled with the application of certain incentives intended to increase the attractiveness of the country to foreign investors. Countries strive to modernize their economies with the help of foreign capital. The developing countries of Asia, in contrast to the new member states of the European Union, are not restricted in their policies with respect to foreign investors by the requirements of regional economic integration

Tax Competition regarding Foreign Direct Investment between Transition European Countries

This paper explores the fiscal measures adopted in the transition European countries in order to encourage the foreign direct investment. There were analysed six countries: Albania, Macedonia, Moldova, Russian Federation, Union of Serbia and Muntenegro, Ukraine, based on the four criteria: corporate and capital gains tax rates, withholding taxes, tax incentives, foreign tax relief and transfer pricing rules. Finally, the conclusion is that all the analysed countries offer favourable fiscal conditions for the foreign direct investment. Serbia, Muntenegro, Macedonia and Moldova have attractive fiscal regimes, showing that the authorities from these countries count on the foreign direct investment as a solution of solving the social and economic problems.foreign direct investment, business environment, tax competion, transition European countries

Tax differentials and inflow of foreign direct investments : evidence from foreign operations of U.S. multinational companies

This paper concerns the measurement of the impact of tax differentials across countries on inflow of Foreign Direct Investment (FDI) by using comprehensive data on the foreign operations of U.S. multinational corporations that has been collected by the Bureau of Economic Analysis (BEA), the U.S. Department of Commerce. In particular, this research focuses on examining: (1) how responsive FDI locations are to tax differentials across countries, (2) how different the tax effect on FDI inflow is between developed and developing countries, and (3) whether investment location decisions have become more or less sensitive to tax differences between countries over time ranging from the late 1990s to the early 2000s. Estimation results suggest that high rates of corporate income taxation are associated with reduced foreign assets of U.S. multinational firms in all industries by decreasing the return to foreign asset investment. Further, foreign assets of U.S. multinationals in all industries have become more responsive to non-income tax differentials across countries than to income tax differences from 1999 to 2004. Empirical estimates also indicate that foreign investment by American firms is associated with higher tax sensitivity more in developed countries than in those that are developing.Developing countries, United States, Foreign investments, International business enterprises, Taxation, Tax differentials, FDI inflow, Developed/Developing countries, Income/Non-income taxation, Developed countries

Promoting investment in small Caribbean states

This study performs an econometric analysis to determine the main policy levers for investment promotion in the Caribbean. The results provide the following policy advice to Caribbean policy makers seeking to increase investment in, and hence the growth prospectives of, their countries. 1. Investment, both foreign and domestic, is higher in countries that are open to international trade. Our results also suggest that Caribbean countries might see a greater effect of trade integration than other countries. Caribbean governments should therefore pursue regional trade arrangements, and actively support the WTO process of global trade liberalization. 2. Investment, both foreign and domestic, is higher in countries whose domestic markets are larger and more advanced. Regional integration to expand what is considered the domestic market, is thus beneficial. 3. Investment, both foreign and domestic, is higher in countries with greater political stability. To inspire confidence among investors, Caribbean countries should avoid major political disruptions, by pursuing inclusive and participatory policies. Our results suggest that investment is particularly responsive to stability issues in countries like Haiti, Guyana, Dominica, and Grenada. 4. Foreign investors are discouraged by bad macro-economic policies, poor infrastructure, and excessive regulation. Caribbean countries should avoid periods of high inflation and large debt burdens, and develop functional infrastructure and regulatory frameworks.FDI (Foreign Direct Investment Domestic investment Small states Caribbean

The foreign investments phenomena in southeastern European countries

The south-eastern Europe countries have all the common history of the communism policy and economy, which from the foreign investments perspective meant a radical approach, which promoted a nationalism view against foreign capital interference. Similar to China, perhaps India and other countries, the governments of the south-eastern Europe’s countries expressed a rejection to foreign investments, emphasizing the negative effects of such operations, arguing that any foreign capital inflow is followed by a foreign capital outflow which at the end will destabilize the balance of external payments and will overall result in no favorable effect upon the economy of their countries.

Foreign Capital Investment into Developing Countries: Some Economic Policy Issues

This paper analyses the role of foreign capital in the economic development of developing countries, particularly South Asian and East Asian countries. Mainstream economists suggest that foreign investment would benefit developing countries by increasing the availability of capital, and through their positive impact over productivity and the general economic wellbeing of the host country. After the Second World War, the rapid economic growth first of Japan and later on of South Korea, Hong Kong, Singapore, and Taiwan has been widely cited in support of foreign capital. It is true when we look at the records in terms of the removal of poverty, job creation, educational achievements and improving the overall living conditions. I find however, that such discussions have ignored the experiences of developed countries in their early phase of industrialisation. In addition there is a lack of attention to the analysis of the issue of capital inflows in the context of neoliberal economic reforms and financial deregulation. After the global financial crisis in 2008, capital inflows to developing countries have witnessed a sharp decline. Foreign investments are highly sensitive to foreign exchange rate fluctuations. Thus, under such a situation, it is difficult to build a long term industrialisation strategy

When developing countries meet transnational universities: searching for complementarity and dealing with dual embeddedness

During the last two decades, a growing number of universities, mainly from developed countries, have established branch campuses in developing countries. From the developing country perspective, attracting foreign universities can help mitigate financial constraints and capacity shortages that impair the state’s ability to provide greater access to higher education, while also improving teaching and research in general. However, foreign universities may also be detrimental if they crowd-out their domestic counterparts. We explore different scenarios and policy options for developing countries aiming to attract foreign universities, building upon a review of four case studies from Chile, China, Kazakhstan and Malaysia. Our analysis illustrates how host countries can provide incentives to align incoming foreign universities to complement and strengthen the areas of weakness in their higher education systems. We also reflect on how policy-makers can deal with the challenges associated with the dual embeddedness of international branch campuses

Foreign technology imports and economic growth in developing countries

The authors investigate the relationship between foreign technology imports and economic growth in developing countries. They develop an intertemporal endogenous growth model that explicitly accepts foreign technology imports as a factor of production. The model establishes a link between the growth rate of productivity in a developing country and the country's intensity of learning to use foreign technologies. They hypothesize that a developing country's economic growth rate increases as foreign technology imports increase. They run regressions with data for about 50 developing countries, using different econometric methods and time spans. These empirical tests confirm the hypothesis that foreign technology transfers boost income growth rates. Moreover, economic developing in developing countries differs from that in industrial countries. In developing countries, increases in productivity depend not on innovation but on importing foreign plants and equipment and on borrowing foreign technology.Economic Theory&Research,Environmental Economics&Policies,Achieving Shared Growth,Economic Growth,Inequality

The Impact of Affinity on World Economic Integration: The Case of Japanese Foreign Direct Investment

This paper finds that a country’s affinity with a foreign country has a positive effect on foreign direct investment flows from it to that country, by analyzing Japanese foreign direct investment outflows during the period of 1995 to 2009. A rise in affinity between countries is thought to enhance their mutual trust and as a result lower the transaction costs of economic activities between them, thereby helping to promote bilateral foreign direct investment flows. These findings imply that a rise in affinity among countries is likely to facilitate international economic integration.JEL Classification Codes: F2Embargo Period 24 monthshttp://www.grips.ac.jp/list/jp/facultyinfo/chey_hyoung-kyu