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

An appraisal of the impact of international trade on economic growth of India- through the ARDL approach

Purpose: The study examines the impact of international trade on economic growth of India by using the Autoregressive Distributive Lag Model (ARDL) technique. The study further adopts Trade Openness Index to analyze the growing integration of India’s external trade with the outside world. Design/Methodology/Approach: The study employs the Augmented Dickey Fuller (ADF) Test for unit root and Autoregressive Distributive Lag Model (ARDL) cointegration approach which entails the Wald Test, Long run OLS estimation test, Error Correction and short Run relationship estimation test, as well as the short run Causality test. The data on the variables of model and Trade Openness Indicator were sourced from the various data sources of the Handbook of Statistics on the Indian Economy and the UNCTAD, World Bank Databases. The Data for the index and the model is collected and analysed for the period of 1991 to 2017. Findings: The analysis of the Augmented Dickey fuller (ADF) test for unit root shows that the series were of different order, I(1) and I(0), hence the Autoregressive Distributive Lag Model (ARDL) co-integration technique was employed by the study. The long run relationship of the underlying variables is detected through the F-statistic (Wald test) which shows that the series are co-integrated. Long run relationship estimates presents a positive and significant relationship between exports and domestic investment with GDP. The analysis presents that the relationship between the variables imports and exchange rate with GDP was found to be negative, but statistically insignificant and the speed of adjustment term (Error Correction Term) was also found to be significant. Short run causality result reveals the presence of short run causality between exports, domestic investment and exchange rate to GDP. Practical Implications: The paper concludes a positive relationship between international trade and economic growth and supports the ideology of mercantilism to encourage exports through trade promotion and increased participation of India in the world markets. Originality/Value: The authors conclude a positive impact of international trade on India’s economic growth and long run relationship estimates present a positive and significant relationship between exports and domestic investment with GDP. Further analysis on implications on bilateral treaties and tariffs would add value to the current study.peer-reviewe

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

Foreign Trade and Economic Growth: A Study of Nigeria and India

The study examines the impact of foreign trade on economic growth in Nigeria and India as well as the direction of causality between foreign trade and economic growth in the countries. The study used Vector Autoregression method (VAR) and Granger causality test in estimating the data. The data used were sourced from United Nations Conference on Trade and Development (UNCTAD). Results of the VAR show that economic growth had positive and significant impact on foreign trade in Nigeria and India. The results further revealed that the direction of causality running from foreign trade to economic growth in Nigeria and India. The study concludes that foreign trade serves as a lubricant in further enhancing economic activities of the countries. Therefore, the government in the two countries should further open up their economies for international trade and put in place sound macroeconomic policies that will enable the countries to reap the benefit of foreign trade

POLICY ALTERNATIVES IN REFORMING POWER UTILITIES IN DEVELOPING COUNTRIES: A CRITICAL SURVEY

This paper examines the policy alternatives faced by developing countries in their endeavours to preserve and develop their electricity and gas systems, two service-oriented industries that - along with oil and coal - provide the bulk of the energy supply in both developed and developing countries. Even in very poor countries, industrially generated energy is indispensable for carrying out most economic activities. Therefore, Governments traditionally recognize that the supply of gas and electricity entails a fundamental public service dimension. Chapter I presents and defines the issues of liberalization, deregulation and privatization of energy utilities, and it attempts to locate energy reforms in a broader historical framework in which developing countries` Governments have faced increasing financial hardship. Chapter II reviews some experiences in energy sector reforms, focusing on some of the largest semi-industrialized countries in Latin America and Asia. A few remarks on the advisability of a flexible approach to reforming energy regimes in developing countries conclude the paper.

Investment Discrimination and the Proliferation of Preferential Trade Agreements

The proliferation of bilateral and regional trade agreements has arguably been the main change to the international trading system since the end of the Uruguay Round in the mid- 1990s. We argue that investment discrimination plays a major role in this development. Preferential trade agreements can lead to investment discrimination because of tariff differentials on intermediary products and as result of provisions that relax investment rules for the parties to the agreement. Excluded countries are sensitive to the costs that this investment discrimination imposes on domestic firms and react by signing a trade agreement that aims at leveling the playing field. We test our argument using a spatial econometric model and a newly compiled dataset that includes 166 countries and covers a period of 18 years (1990-2007). Our findings strongly support the argument that investment discrimination is a major driver of the proliferation of trade agreements

Developing and Harnessing Software Technology in the South: The Roles of China, India, Brazil, and South Africa

Software technology is gaining prominence in national information technology (IT) strategies due to its huge potential for socioeconomic development, particularly through the support it provides in the productive sectors of the economy, delivery of public services and engagement of citizens. In growing numbers of developing countries, software technology is also being leveraged for income generation from digital services and products. For instance, in recent years, India, Chile, the Philippines, Brazil, China, and Indonesia have emerged as important global players in the offshore software services industry, with India and China standing out as leaders. Cooperation between developing countries (south-south) in the area of software technology has also been growing; particularly in the application of software technology to agriculture, public administration and governance (e-governance), transportation and the society (knowledge society). The paper presents the current state of software technology in the south and specifically, the maturity of the software industries in China, India, Brazil, and South Africa (CIBS). It establishes profiles of different regions based on the level of education, quality of research and availability of e-infrastructure and e-applications for determining the potential of these regions in terms of growth and competitiveness in the global software industry. Further complementary analysis of country profiles produced country clusters, helping to identify potential collaboration scenarios for advancing software capacity in the south. Finally, the paper discusses how CIBS can pivot regional or inter-regional cooperation in software technology in the south.software technology, software industry, south-south cooperation, China, Brazil, India, South Africa

India’s Outward Foreign Direct Investment: Closed Doors to Open Souk

Abstract: Spectacular liberalisation of trade and investment policies opened the floodgate of capital flows in and out of India from the mid 1990s. This colossal capital flows facilitated the rapid economic growth and raised the country’s profile as one of the super powers in the region. The recent surge of outward foreign direct investment (OFDI) from India has a significant balance of payments as well as enormous socio economic effect in securing the country’s position as a new economic power in the global context. Since the study on the OFDI is sparse, this paper attempts to contribute to the literature by examining the major determinants of OFDI from India using the cointegration and Vector Error Correction Model over 1970 and 2009. The results of our study indicate that the dramatic financial and trade liberalisation has instigated the gigantic outflow of investment and acquisition by India’s firms. Furthermore, the domestic economic environment including the growing human capital stocks, increasing international competitiveness, large influx of inflow of foreign capital and increased domestic savings are positively and significantly influencing India’s huge outward capital flows in recent decade. However, improvement in domestic technological capabilities, rising standard of living and increased interest rates are deterrents to the OFDI of the country in the long run. Granger causality test also indicates that while all the above mentioned independent variables are Granger causing OFDI, nevertheless, outward FDI does not Granger cause any of the factors determining the OFDI from India.Keywords: Inward FDI, Outward FDI, Economic Growth, India, Cointegration, VECM, Endogeniety test, Granger Causality Test

National Policies to Attract FDI in R&D: An Assessment of Brazil and Selected Countries

This paper is part of a project based on a broad data collection of policies in selected countries, with a special focus on the attraction of foreign R&D investments. The purpose of the research is to contribute to effective policy-making, capable of fostering multinational corporations? (MNCs) investments in Brazil. In this context, the paper aims at identifying and examining the main policies to attract MNC technological activities in China, India, Ireland, Israel, Singapore, and Taiwan, in order to illustrate successful experiences and, based on them, to analyse the Brazilian case. The experiences and, based on them, to analyse the Brazilian case. The international experiences are analysed bearing in mind that foreign direct investment (FDI) attraction policies are part of industrial and development policies, and should not be assessed or used in isolation. ...industrial policy, technology, foreign direct investment, MNC R&D activites