No / This paper represents part of an ongoing study on the topic of foreign direct investment (FDI) and poverty reduction in the ASEAN region. The overall study covers both macro- and microeconomic aspects of this issue, and this paper addresses the macro dimension. Considerable work has been done on the relation between economic growth and poverty reduction, and by now a conventional wisdom is emerging which can be stated simply that while growth is critically important for poverty reduction, the pattern and nature of the growth process in economies also matters. Following this reasoning this study explores the link between FDI and poverty reduction. The broad hypothesis to be tested is that FDI through its growth effect or other means is poverty reducing. While a great deal has been written on a variety of aspects relating to poverty, the precise FDI-poverty link has rarely been addressed directly, and we seek to remedy this gap in the literature. The paper is in four sections. The first discusses briefly the broad dimensions of poverty in the ASEAN region and recent trends in terms of FDI. Having set out these empirical dimensions, the remaining sections consider data analysis and results. The second section sets out the econometric approach and the results from the relevant literature, the third discusses data and some preliminary results. The fourth gives the main results, and finally we draw some conclusions. I. Poverty and FDI in ASEAN Naturally within ASEAN as a region the poverty picture is very varied, as one would expect given the diversity of income levels among the member states. Table 1 summarises the position in terms of income levels and past income growth rates. The inequality in the group can be seen readily with two high-income countries, Singapore and Brunei; three lower-middle income countries, Malaysia, the Philippines, and Thailand; and the remaining members--Indonesia, Cambodia, Lao, Myanmar, Vietnam--all low income.

A case study of acquisition of Russian brewery Bravo, by Heineken. An example of how foriegn investment could be attracted, prospects, opportunities.

No / This paper studies the impact of foreign direct investment (FDI) on total factor productivity (TFP) for a cross sectional sample of Chinese industrial sectors. The possible determinants of TFP are sought with special focus on FDI. An endogeneity test is performed in order to avoid inconsistent results. Evidence indicates that foreign presence, the level of R&D and the firm size are the most important factors enhancing TFP in Chinese industries. The findings from this study support the argument that attracting FDI is an effective way of introducing advanced technology to host countries.

No / No Abstract

No / The existing empirical literature on foreign direct investment (FDI) entry strategies tends to allow a binary choice between wholly owned enterprises (WOEs) and equity joint ventures (EJVs) or between greenfield investment and acquisition only. The current study specifies a multinomial logit model for the choice from all four FDI entry modes in China. Five hypotheses are developed based on transaction cost economics and tested on a data set covering 10,607 foreign investment projects in China. A foreign investor seems to prefer the WOE mode given its large investment commitment, a high level of the host country's experience in attracting FDI, a good specific industrial location, and a high asset intensity in the host industry. If the conditions of host country experience and good specific location are not met, the EJV and the joint stock company (JSC) modes seem to be of greater use. A good specific location also makes the contractual joint venture (CJV) a preferable entry mode. Compared with overseas Chinese investors from Hong Kong, Macao, and Taiwan, other foreign investors prefer EJVs over WOEs and CJVs. The results have important implications for managers.

No / This paper examines the relationship between foreign direct investment inflows and employment using international business strategy literature to identify the factors influencing the development of subsidiaries that might affect employment growth in host regions. A survey of German subsidiaries in North West England is used to test the significance of the variables that are identified as likely to affect employment. The results of logit regression indicate that entry mode, technology transfer, and firm age affect the growth of employment. The study also highlights that other factors, such as sector, organisational structure, the level of diversification of operations by subsidiaries in the local economy, and range of markets supplied may have important affects on employment. The research indicates that further conceptual and empirical work is required to clarify our understanding of how the organisational, operational, and diversification characteristics of subsidiaries affect employment.

No / The longitudinal properties of outward FDI and multinational company (MNC) strategies and activities have been extensively investigated by international business scholars (Buckley et al., 2007; Butler and Domingo, 1998; Liu et al., 2005). There has, however, been less investigation of the role of outward FDI in the debates about regionalism and globalization (Buckley, 2009a; Rugman, 2003; Rugman and Verbeke, 2004). In principle, if significant numbers of MNCs are developing ‘global factory’-type strategies, this should be accompanied by marked changes in outward FDI that lead to step changes in trend FDI flows as firms engage in substantial new off-shoring operations and complex foreign investments to reap the benefits from the increasing opportunities to internationalize their activities (Buckley, 2009b; Buckley and Ghauri, 2004). An alternative view is that internationalization is primarily a regional process, whereby MNCs conduct most of their activities in the major economic regions of the world, and that this has not changed significantly despite growing trade and capital liberalization (Rugman 2003, 2005; Rugman and Hodgetts, 2001). Thus although new areas such as China and India are increasingly part of the global economy and have become major regional areas, this process does not lead to large-scale changes in the underlying determinants of FDI. In this view, outward FDI trends are likely to be stable in the long run in which shocks to the system do not disturb long-run trends.

Yes / The role of inward FDI on economic growth has attracted the attention of researchers for many years as its beneficial impact has been recognised theoretically by scholars and policymakers; however, the empirical evidence remains ambiguous. Hence, the objective of this chapter is to investigate the causal relationship between FDI inflows/outflows and economic growth in developed OECD countries. Investigation of the causal link between FDI inflows and growth has important implications such that if there is a unidirectional causality it would support the FDI-led growth hypothesis. Alternatively, if the causal link runs in the opposite direction, it would imply that economic growth may be a prerequisite for countries to attract FDI. Finally, if the causal process is bi-directional, FDI inflows and growth would have a reinforcing causal relationship. In particular, this chapter contributes to the existing literature by focusing on developed countries as inward/outward FDI has become an increasingly significant factor in influencing the economic activity. In contrast, most previous time-series causality studies focus on developing countries with only a few covering developed countries. However, almost all of the world’s FDI originates from developed countries and the majority of FDI is also located in developed countries. Another feature is that this chapter also tests the causal link between outward FDI and economic growth. Outward FDI might promote the home country’s economic growth as it might yield higher profits, transfer technology and management skills to the home country, expand production abroad, secure raw materials overseas and avoid trade barriers and so on. Following an Introduction, the chapter then reviews FDI trend across OECD countries. Next it discusses the alternative theories and literature exploring the relationship between FDI and economic growth (i.e. the impact of inward FDI on host country’s economic growth, the impact of outward FDI on home country’s economic growth, together with the impact of economic growth on inward/outward FDI). We then describe empirical causality testing methodology, together discussing the empirical results.

Foreign direct investment (FDI) in food retailing has generated a considerable amount of attention in both the media and the business world throughout the 199Os, with a strong focus on Asian and Central and Eastern European countries. Among these countries, China is a key player and a nation that no international retailers can afford to ignore due to its population size of 1.2 billion and its rapid economic development. Food retailers from different parts of the world have been keen to use their modern retail concepts and technology to seek expansion opportunities in China. Consequently, two important questions emerge: What does the process of FDI in food retailing entail? Is the retail and distribution market in China easily entered? Regarding the first question, substantial research effort has been vested in this topic. However, a conceptual framework that incorporates the whole scope and complexity of the process is still lacking. For the second question, a prudent scrutiny reveals that foreign food retailers are confronted with a lot of complications due to the legacy of the previous command economy and the unique Chinese social and business structure. The thesis develops an analytical model in which critical variables, and their logical relationships, are used to analyse and explain the process of FDI of food retailers in the contemporary era, using China as the domain for the empirical work. Methodologically, the study adopts a qualitative approach using case studies with thirteen foreign food retailers in China. The research focuses on three main areas: long-term strategic objectives behind retail international expansion, market entry issues, and retail operational issues. Firstly, the long-term strategic objectives that underlie retailers’ undertaking of foreign direct investment are investigated. Evidence shows that the prevailing concept of reactive retail internationalisation and the tenet of psychic distance do not fully reflect the reality of retail internationalisation. Secondly, three issues related to market entry are explored. The first issue is the legal and regulatory infrastructures that foreign retailers face when entering China. The second issue is the selection of Chinese partners, managing partner relationships and the share of managerial control. The third issue is the technical and political procedures of site selection and store development. The empirical work reveals that the lack of a systematic and well-developed legal system complicates the process of foreign direct investment and having a Chinese partner who possesses the appropriate guanxi network alleviates the problem. Furthermore, the exercise of dominant control over operational and managerial issues is practised by the foreign retailers in their joint ventures. Significant conflicts between partners appear not to exist under such an arrangement. On the other hand, political procedures of site selection and store development are found to be onerous. In terms of technical procedures, respondents reported that the methods that are being used in developed countries are not entirely applicable in China. The third area on which the research focuses is operational issues that foreign food retailers confront in the host countries. These include supply chain management; adjustment and adaptation; and development of human resources. Findings suggest that there are two types of retail know-how: core and peripheral. No changes to core elements should be made in the overseas operation so that the uniqueness of the individual retailer is preserved. Adjustments, however, have to be made to peripheral elements in order to match particularities of local consumer demand. A learningoriented culture within a retail organisation is found to be an important underlying element that contributes significantly towards successful retail internationalisation. Taking a holistic perspective, the foreign direct investment behaviour in the retailing sector and the manufacturing sector, from which the prevailing foreign direct investment theories were developed, appear to be very different. The foreign direct investment behaviour of retailers seems to be better explained and understood within a framework that emphasises market power seeking, stresses the dynamics of different elements that constitute retail know-how, and underscores the notion of knowledge accumulation and utilisation.

This dissertation consists of three essays on cross-border mergers and acquisitions (M&As). The first essay studies horizontal and vertical investments between Organization for Economic Cooperation and Development (OECD) countries, while the second essay examines how investment patterns vary by country development. The third essay estimates the effect of merger policy reform on cross-border M&A activity in Europe. The first essay tests how well theories of horizontal and vertical foreign direct investment (FDI) explain observed patterns of cross-border M&As in OECD countries. Horizontal investment occurs when multinational firms produce in foreign countries to serve the foreign market, whereas vertical investment occurs when multinational firms source intermediate goods from foreign affiliates for final assembly and sales at home. The former is often used to displace exports when transport costs exceed local production costs, while the latter is often driven by cross-country factor price differentials. Little support is found for the traditional explanations of FDI as results indicate horizontal and vertical investments look much more similar than previously believed. The second essay challenges long-standing beliefs that the majority of FDI within the developed world is horizontal, whereas investments into developing nations are predominantly vertical. Developed-developed FDI is largely cross-border M&As and FDI into developing nations typically consists of greenfield investments. However, cross-border M&As are becoming more popular in developing countries and, contrary to previous beliefs, the proportion of horizontal and vertical investment is independent of country development. Results suggest trade costs have a stronger effect on developing countries, while no clear support is found for the idea that factor endowment drives vertical investments in developing nations. The third essay examines how reforms to European Commission Merger Regulation (ECMR) in 2004 affected cross-border M&A activity in Europe. The ECMR outlines competition rules and empowers the European Commission (EC) to block anti-competitive mergers adversely affecting the European market. Details of the reform suggest the law was expanded to cover more mergers, which is expected to have a non-positive effect on merger activity. Difference-in-differences results suggest the reform had no significant effect on cross-border merger activity in countries within the EC’s jurisdiction.