Inward FDI in Austria and its policy context, 2010

Since World War II, inward foreign direct investment (IFDI) has played an important role in Austria, contributing substantially to overall investment. Austria's IFDI stock increased every year except in two. The most recent decline occurred in 2008 as a result of the economic and financial crisis. In fact, valuation adjustments led to a fall of the country's IFDI stock by 4%. Yet, in real terms, as measured by employment, IFDI rose even during 2008, and projections for 2009 suggest renewed growth of the country's IFDI stock. This short Profile highlights a number of stylized facts on IFDI and describes the country's FDI policy environment

Do host countries really benefit from inward foreign direct investment?

It was with great interest that we read Perspective No. 84 addressing the impact of inward foreign direct investment (IFDI) on technological innovation and entrepreneurship. In that issue, Pathak, Laplume, and Xavier-Oliveira laid out arguments for and against IFDI. They suggested that we have, for far too long, extolled the benefits of IFDI for developing economies, without properly accounting for its costs. They noted that there are genuine concerns that we ought not to overlook, and that we should pay special attention to the impact of IFDI on local innovation and entrepreneurship. Understanding the relationship between IFDI and innovation is an important policy issue, as it can help inform whether, and how, IFDI can stimulate economic growth

The combined effect of foreign direct investment on firm productivity

This paper attempts to answer the economic implications of combining inward foreign direct investment (IFDI) and outward foreign direct investment (OFDI) by constructing a panel fixed effects model using Chinese industrial firm-level data for the period 1998–2013. Specifically, we focus on the impact of combining IFDI and OFDI on firm productivity in China. We also introduce interactive terms into the model to explore the direct and indirect mechanisms through which IFDI and OFDI affect productivity growth. The results show that IFDI and OFDI work together to contribute to productivity growth by acting directly on the level of technology, thereby increasing productivity. IFDI intensifies market concentration, which in turn positively moderates the relationship between OFDI and productivity. Furthermore, IFDI moderates the financing constraints of firms, but has a weaker effect; the easing of financing constraints facilitates the positive impact of OFDI on productivity. Absorptive capacity favours IFDI spillover, but OFDI inhibits absorptive capacity improvements. Our in-depth analysis of the mechanism of the combined impact of IFDI and OFDI on productivity reveals the objectives of using this combination, thereby providing theoretical support and policy recommendations for the implementation of this strategy

Inward FDI in Indonesia and its policy context

Inward foreign direct investment (IFDI) in Indonesia has been an important element of the country's economic development process. Following the introduction of the first foreign direct investment (FDI) law early in the 'New Order' era (1966-1998), IFDI flows to Indonesia were relatively large. Indonesia was hit hard during the Asian financial crisis in 1997-1998, when net IFDI inflows fell sharply. In the first half of 2004, IFDI started to grow again. Indonesia still faces some uncertainties relating to the implementation of regional autonomy and to the high costs of running businesses caused by inadequate infrastructure, restrictive labor regulations and corruption. Nevertheless, the availability of vast reserves of highly diversified natural resources, a huge domestic market potential, a cheap labor force, and continued reforms in the direction of a market-based economy, including privatizations and open access to almost all sectors, are likely to boost IFDI

Inward FDI in Portugal and its policy context, 2011

Portugal's performance in attracting inward foreign direct investment (IFDI) during the economic and financial crisis in 2009 was poor, below the low figures that it had already recorded in the previous couple of years, although Portugal did not record negative FDI inflows like competing countries such as Ireland (in 2008) and Hungary (in 2009). The country's difficulties in attracting IFDI are, however, structural. The "golden" years of the early 1990s, when Portugal emerged as an attractive and fashionable location, are past. The country's IFDI performance throughout the first decade of the 21st century was, in general, weak. In 2009, Spain, France and Brazil were the main sources of IFDI in Portugal. In spite of the Government's commitment to attracting IFDI, policy design and implementation have fallen short in the increasingly fierce competition for international investment

Inward FDI in New Zealand and its policy context

New Zealand, with a low domestic savings rate, has long depended on inward foreign direct investment (IFDI) to facilitate growth and development. The country's IFDI stock reached US$70 billion in 2010, and averaged 51$ 636 million in 2010 and US$ 3.4 billion in 2011, have been lower than those of other comparable economies, reliance on IFDI is high. New Zealand's policy toward IFDI is based on the creation of an attractive investment climate (low costs of doing business, low levels of corruption, few restrictions); few specific incentives are offered. Major investment sources are Australia and the United States. IFDI is significant in mining, trade and the banking and finance industries. While there is considerable public disquiet regarding the levels and sources of inward investment, future prospects look strong with the recently re-elected Government committed to further privatization

Cross-border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany

We analyse how foreign direct investment (FDI) aff ects employment security using administrative micro data for German employees. FDI intensity is measured at the industry level, which enables us to take into account the sum of direct eff ects at the investing fi rms as well as indirect eff ects of FDI that stem from competitive eff ects, input-output linkages, technology spillovers, and changes in factor prices. We account for both inward and outward FDI, and diff erentiate these two types of FDI by source and destination region, respectively. We also investigate whether specifi c worker groups are aff ected diff erently by FDI. We fi nd that both inward and outward FDI at the industry level signifi cantly reduce employment security. This is particularly the case for inward FDI coming from the western part of the European Union, as well as for outward FDI going to Central and Eastern Europe. The eff ects are quantitatively small overall, but sizeable for some worker groups such as old and low-skilled workers.Foreign direct investment; labour market transitions; duration analysis

Does FDI Work as a Channel for R&D Spillovers? Evidence Based on Swedish Data

Multinational enterprises (MNEs) are important in transmitting technology across national borders. Not only do they allow for transfer of technology within the firm, but it is also believed that they are important channels for international R&D spillovers as well. This paper analyzes empirically whether inward and outward foreign direct investment (FDI) work as channels for international R&D spillovers. We utilize firm-level as well as industry-level data for Swedish manufacturing in the analysis. We find no evidence of FDI-related R&D spillovers - neither at the firm-level nor at the industry-level in Swedish manufacturing. The only variable that consistently affects total factor productivity is own investment in R&D.Multinational enterprises; Foreign direct investment; Spillovers; Research and development

Productivity and Labour Demand Effects of Inward and Outward FDI on UK Industry

We relate the technological and factor price determinants of inward and outward FDI to its potential productivity and labour market effects on both host and home economies. This allows us to distinguish clearly between technology sourcing and technology exploiting FDI, and to identify FDI which is linked to labour cost differentials. We then empirically examine the effects of different types of FDI into and out of the United Kingdom on domestic (i.e. UK) productivity and on the demand for skilled and unskilled labour at the industry level. Inward investment into the UK comes overwhelmingly from sectors and countries which have a technological advantage over the corresponding UK sector. Outward FDI shows a quite different pattern, dominated by investment into foreign sectors which have lower unit labour costs than the UK. We find that different types of FDI have markedly different productivity and labour demand effects, which may in part explain the lack of consensus in the empirical literature on the effects of FDI. Our results also highlight the difficulty for policy makers of simultaneously improving employment and domestic productivity through FDI

依赖自然资源缺乏远见:非洲国家如何促使 IFDI 多元化?

近年来, 非洲国家的 IFDI 趋势令人振奋: 2001 年, 非洲注册的 IFDI 差不多是 200 亿美元; 2011 年就几乎达到了430亿美元