24 research outputs found
Foreign Direct Investment in Times of Global Economic Crisis: Spotlight on New Europe
This paper examines the potential impact of the economic crisis, which started in 2008, on the dynamics global foreign direct investment, especially in the new member states of the European Union. The global economic crisis that hit the world in 2008 has forced scholars and policy makers alike to rethink their approaches to the global economy, in particular to financial markets (including stock exchanges and portfolio investment). It can be hypothesised that the crisis has been particularly devastating because it has resulted from the coincidence of three factors: a cyclical downturn in the world economy; a structural change that hit certain industries which used to be star performers in the global economy (especially the automotive industry); and the collapse of the previous model of the financial industry based on excesses. This paper asks how this crisis affects foreign direct investment flows, with special attention being paid to the question of which locations are set to lose the least and which ones are set to lose the most. In this respect, particular attention is paid to the activities of subsidiaries of multinational enterprises. These subsidiaries can follow different scenarios as a response to the global economic turmoil, including a reorganization of their production systems, and a reduction or closure of activities that are deemed to be less necessary for the continuation of activities. Finally, the paper examines the policy implications of the crisis. It challenges the view that rising economic nationalism (in the form of protecting one location against locations in other countries) would be the right answer to the problems created by corporate restructurings.foreign direct investment, credit crunch, foreign subsidiaries, Europe
New Europe's Promise for Life Sciences
The life sciences sector (and biotechnology in particular) has emerged as a prospective area, and attracted a lot of attention recently. Multinational companies in the life sciences seek to explore new markets, and, on the other side, governments strive to develop the life sciences sector perceiving it as a basis for long-term development. Whilst the R&D activities of global multinationals in life sciences still remain concentrated in the Triadic economies, these companies increasingly seek for new location to tap the knowledge. New EU member states emerge as such prospective locations. Notwithstanding the interest towards this sector, the body of literature on the development of life sciences in new EU member states, and particularly, the role of multinational companies, remains scant. In this explorative study we attempt to fill this gap and focus on the role of multinational companies in the Czech life sciences sector.Life Sciences, Biotechnology, Pharmaceuticals, Multinational Companies, European Union
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Does It Matter Who Invests in Your Country?
"Indirect" FDI – investment in which immediate investors differ from ultimate owners – plays an increasingly important role in corporate strategies and financial management. This Perspective analyses its different forms, explores its implications for development and suggests ways to minimize the potential negative impact of such investment
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Russian outward FDI and its policy context
Outward foreign direct investment (OFDI) from Russia often surprises outside observers by its landmark deals. One of them was the purchase in September 2009 of a 55% stake in General Motors' German affiliate Opel by a consortium of the Canadian car maker Magna and the Russian state-owned bank Sberbank. The latter is the largest creditor of the Russian car maker GAZ, and may represent its commercial interests in the contract. With this deal, Russia has bought into the industrial heartland of the world economy and could potentially access more advanced technology. This acquisition hints at the growth of Russian OFDI in general, which has prospered despite fears in many host countries that the investors are subject to Russian political interference, a fear that recently announced Russian policy intentions may allay
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Outward FDI from Hungary and its policy context
Outward foreign direct investment (OFDI) from Hungary has weathered the current crisis relatively well, although its volume is still moderate for a country classified as "high income"—but not necessarily if compared with other new European Union (EU) members. The Hungarian OFDI stock is highly concentrated in five big companies. Government policy has so far focused more on a vigorous promotion of inward FDI than on helping outward investors. However, it sometimes protects strategic Hungarian OFDI firms from hostile takeovers. The main question for the future of Hungarian OFDI is how its sustainability can be assured, especially by way of broadening the company base of capital exporters
The future of Russian outward foreign direct investment and the eclectic paradigm: What changes after the crisis of 2008–2009?
This article explores the future of Russian outward foreign direct investment in the aftermath of the crisis of 2008–2009. As it is too early to analyse the full impact of the crisis, it develops hypotheses about the degree of slowdown in the foreign expansion of Russian transnational corporations. It uses an extension of the eclectic paradigm to home country advantages (competitive environment, business environment, development strategy, State involvement) applied to a comparison of the Russian Federation with other economies in transition as an analytical tool. Systematic differences between transnationals from the Russian Federation (global firms, based on natural resources, aiming for vertical integration of assets) and from new European Union member countries (regional firms, based on downstream activities or services, aiming for horizontal integration) allow us to formulate more solid conclusions about the future of the Russian firms facing lower export prices, lower market capitalizations and higher debts. In turn, this article argue that a comparison with the large emerging economies of Brazil, China and India, under the acronym of BRIC can be less useful in the current context, as these economies are significantly less affected by the crisis of 2008–2009 than the Russian Federation; hence they can not expect a slowdown in their outward foreign direct investment similar to that of Russian transnationals.
JEL: F23; F21; O52; P2
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谁是东道国的真实投资者是否重要?
"间接"FDI — 一种立即投资者不同于最终所有者的投资方式 — — 在公司战略和财务管理中发挥越来越重要的作用。作者分析了各种不同的形式,探索了其对发展的影响,并且建议如何尽量减少这种投资的潜在负面影响
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Inward FDI in Hungary and its policy context
In the 1990s, Hungary used to be a front-runner among Central and Eastern European countries in terms of attracting foreign direct investment (FDI). At that time, it attracted FDI both through the privatization of state-owned enterprises to foreign multinational enterprises (MNEs), and through Greenfield investment by foreign MNEs in export-oriented manufacturing (especially automotive and electronics). Almost two decades later, the economy is still a major host of FDI, with inflows of US$ 4.7 billion in 2011, although it has lost its privileged status within the region. Its policy approach to inward FDI (IFDI), too, has undergone changes over the past two decades: from being a country that was the first in Central and Eastern Europe to open its economy fully to FDI and offer incentives for it, it has moved to being one with more selective policies. The Government still successfully encourages FDI in export-oriented production (particularly automotive); however, in utilities, banking and retail, it has recently imposed windfall taxes, which mostly affect foreign players, indicating a less favorable stance toward them. This change in policy is in partly a result of the recent global financial and economic crisis, which has hit the country hard
National Treatment at Investment at Different Levels of Public Administration: Considerations for Policy Makers
The article has identified the right subnational interpretation of the principle of national treatment (NT) as a cornerstone determining the policy flexibility of subnational authorities. The purpose is to analyse measures of national and subnational authorities affecting the application of the principle of NT vis-à-vis the foreign investor, which allows to recommend certain approaches to investment policy making at the subnational level. The following issues are discussed in the article: concepts of foreign investors and foreign investment in the Russian Federation; NT in bilateral investment agreements; NT of investment in the context of the WTO agreements; a framework for the description of NT at the subnational level; classification of exceptions from NT; exceptions from NT according to GATS obligations; NT at the subnational level. In the Russian Federation the foreign investor has full legal protection equal to the protection of local firms if it is a legal entity in which the foreign shareholder owns at least 10%, but no more than 20% of the authorized capital, or if the foreign investor does not create a new legal entity, but opts for a branch or a representation office. The model bilateral investment treaty of the Russian Federation follows approaches similar to those of developed countries. Questions were identified which should be answered during the investment policy making at the subnational level: For what kind of investors and how is market entry regulated? What represents post-establishment? Is it possible to expand NT for affiliated and dependent firms? In our opinion, nothing prevents the extension of support to small and medium sized enterprises to the entities with 100% (but not 49%) participation of the foreign equity. At the same time it is that type of exceptions from NT which practices in developed countries as well