Direct investment and Belgium’s attractiveness

Belgium, which has long had direct investment links with other countries, is participating fully in the increasingly global economy. At the end of 2005, almost half of the equity capital invested in Belgian companies as a whole was owned directly or indirectly by foreign shareholders. The purpose of the article is to analyse Belgium’s foreign direct investment (FDI) and the incoming investment from abroad, and to view it in perspective, both over time and in relation to other developed countries, especially neighbouring countries. In addition, it aims to identify the main factors determining recent developments and Belgium’s relative position in 2005, the latest year for which data on FDI stocks are available. Although influenced by the same factors as those which determine the development of FDI on a global scale, direct investment links in Belgium differ from those in other developed economies in their magnitude. In fact, the ratio between FDI flows or stocks and GDP is significantly higher in Belgium than in the majority of other developed countries, for both incoming and outgoing FDI. The scale of Belgium’s direct investment links with foreign countries reflects both its function as a financial centre, particularly via the activities of the coordination centres, and its status as a small, open economy in a European Union where integration began earlier – and has progressed farther – than in other free trade areas. In the past ten years, Belgium’s FDI has expanded constantly and at a faster pace than domestic economic activity. While outgoing FDI has, like that of other developed countries, focused more on developing countries, driven by the search for new markets and lower costs, particularly for labourintensive activities, it is nevertheless still concentrated mainly on the developed countries, including the new EU members. The main protagonists in these capital transfers, effected partly via mergers and acquisitions, are Belgian firms active in the service sector. Over the same period, incoming FDI seems to have grown a little more slowly. In terms of stock, it actually stagnated in the early years of this century. However, the recent dynamism of FDI in Belgium has been at least as favourable as in the other European countries taken as a whole, and especially the neighbouring countries. Looking at greenfield investments, which actually lead to the creation or expansion of activities, the number of projects launched in Belgium has been rising, and at a similar rate to those developed in the EU as a whole. Belgium’s main strengths in terms of activity are chemicals – including life sciences – and transport and communications, particularly logistics and distribution. In general, the main motive for FDI projects in Belgium appears to be to serve the European market, or at least its most highly developed core, which includes Belgium. When a location is being selected for a project, Belgium is therefore competing with other EU countries and, more particularly, with neighbouring countries whose economic characteristics are comparable, notably in regard to their standard of living. Compared to other EU countries, especially the new members whose economies are less advanced, Belgium has a handicap in terms of hourly labour costs but, at the same time, it offers high productivity and various advantages as regards environmental and operational criteria, especially the quality of its infrastructures.foreign direct investment, attractiveness

Behaviour of Belgian firms in the context of globalisation : lessons from the conference on “International Trade : Threats and Opportunities in a Globalised World”

The article summarises the main lessons of the Bank’s 2010 conference which focused on international trade and foreign direct investment. The research is based on a microeconomic approach to the behaviour of Belgian firms, with reference to developments in the scientific literature on the subject. Firms active internationally have specific characteristics : they are larger and more productive than firms concentrating on the home market. The costs of entering international markets determine their globalisation strategies, be it in terms of timing, the number of markets canvassed, or the choice between exporting and foreign direct investment. Information technologies have a key role in the development of trade in services, especially for analytical work. It is also shown that, in the face of increased competition from Asian products, firms are tending to concentrate their exports on their leading products and to upgrade quality. The international activities of some firms also have positive repercussions on the productivity and globalisation decisions of firms active solely on the home market. Finally, the impact of globalisation on employment is analysed from various angles. In general, trade with low-wage countries tends to increase demand for skilled labour in Belgium and to reduce demand for unskilled labour. The effects of offshoring are comparable. Finally, while multinationals manage their workforce more flexibly than domestic firms, they have nevertheless been the source of substantial job creation, particularly where the subsidiaries of foreign multinationals are concerned.international trade, foreign direct investment, microeconomic analysis, firm heterogeneity, internationalisation, spillovers, multi-product firms, multinational firms, offshoring, employment, skills

Belgium’s position in world trade

The objective of the article is to give a general overview of the position that Belgium occupies in the world trade stakes and its ability to adjust in response to changes in the international environment. Over the last two decades, world trade has expanded considerably, buoyed up by the rapid growth of new economic centres, the advanced economies generally having seen a drop in their market share. However, the growth in Belgium’s exports has lagged behind the average for twelve European countries going through the same major changes ; and the loss of market share has been higher than the average. A classical econometric analysis of price competitiveness shows up the limited role of relative export prices as a determinant in gains/losses of market share. This finding mainly reflects the fact that prices are largely fixed on international markets, producers cannot adjust their export prices according to the costs that they have to bear. In this context, a reasonable development of production costs, and with stronger reason wage costs, is essential in order to ensure the continuity of export activities. Beyond relative price effects, it is necessary to take into account structural elements in order to explain changes in market share. From this standpoint, it appears that the type of production has a crucial role to play. Faced with competition from emerging economies, Belgium’s external trade performance in the case of standardised products has been well below world demand. On the other hand, high-value-added products or those of a highly innovative nature or with a high research content are the ones that enable it to maintain or improve on its position in global trade. Export activities and innovation share some common features, not least because they are concentrated in the hands of a small number of large enterprises. In view of the high foreign market entry costs, the best performing firms are the ones that tend to be the exporters. However, factors such as the innovative nature of products on offer can of course influence the likelihood of success on foreign markets. Here, innovation efforts by Belgian firms are not creating enough opportunities for marketing new products. Yet, it is most certainly goods with a high value added or highly innovative products that Belgium will be able to count on to ensure sustainable economic development and to support the prosperity of its people.competitiveness, market share, export price, innovation, R&D

Interaction of topological solitons with defects: using a nontrivial metric

By including potential into the flat metric, we study interaction of sine-Gordon soliton with potentials. We will show numerically that while the soliton-barrier system shows fully classical behaviour, the soliton-well system demonstrates non-classical behaviour. In particular, solitons with low velocities are trapped in the well and emit energy radiation.Comment: 10 pages, 11 figure

Spontaneous breathing with continuous positive airway pressure in adult respiratory distress syndrome.

The authors describe three systems of spontaneous respiration with positive end expiratory pressure (P.E.E.P.) : the system of continuous positive airway pressure (C.P.A.P.), the bubble and the intermittent mandatory ventilation with C.P.A.P. (I.M.V.-C.P.A.P.) by Servo-Ventilator 900 B. The results are conclusive with the C.P.A.P. unit used for post-traumatic adult patients in acute respiratory distress and for patients who have been anesthetized for more than three hours. The PaO2 significantly increase in subjects whose PaO2 in the ambient air without P.E.E.P. is lower than 70 mm Hg. The bubble is less used due to its drawbacks. The Servo 900 B offers many possibilities, one of which is reported in this paper