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.

Subject of this diploma thesis is to provide an overview of economic theories on why companies tend to invest at foreign markets directly and thus to determine the foreign direct investment (FDI) itself. Covered areas include a foreign direct investment typology, motivation to invest, localisation factors, attractiveness and measurement of a host country business environment. Various types of FDI, methodology and forms of FDI statistical coverage analysis is included in the thesis. Three frameworks influencing all the segments of the FDI are covered in depth. These include the foreign policy factors, domestic policy factors and a process of economic transformation in the Czech Republic. Corresponding analytics map a development between a FDI and selected macroeconomic indicators of the Czech Republic. The analysis shows that foreign investment has a certain influence over selected macroeconomic indicators, however it is not always possible to quantify it as well as to predict its trend. On the other side it is often difficult to prove an influence of macroeconomic development on intensity of the FDI inflow to the Czech Republic. Keywords: foreign investment, determinants of the foreign direct investment inflow, foreign direct investment macroeconomic indicators

Název diplomové práce v anglickém jazyce, abstrakt v anglickém jazyce a 3 klíčová slova v anglickém jazyce Title: Legal and Economic Aspects of Foreign Direct Investment with Reference to Taiwan Abstract: The thesis on "Legal and Economic Aspects of Foreign Direct Investment with Reference to Taiwan" consists of two main parts, which are divided into eight chapters. The thesis uses the methods of secondary source analysis, synthesis, and comparison. The thesis is mainly based on domestic and foreign literature, foreign legislation, documents and data of international organizations published on their websites, academic articles, textbooks, and economic studies. The first part of the thesis deals with the general issue of foreign direct investment in four chapters, both from the legal and economic points of view. The thesis introduces the reader to the definitions of investment and investor, the nature and meaning of investment, the standards of treatment of investment, and, last but not least, its legal regulation. This section aims to provide a comprehensive overview of the various aspects of foreign direct investment protection, which will provide a well-rounded insight into the subject. In the second practically oriented part, the thesis analyses foreign direct investment in Taiwan. In particular, it...

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Šiame darbe siekiama ištirti paskatų tiesioginėms užsienio investicijoms taikymo ypatumus naujose Europos Sąjungos šalyse – Lietuvoje, Latvijoje, Estijoje, Lenkijoje, Vengrijoje, Slovakijoje, Čekijoje ir Rumunijoje. Darbe atskleidžiami paskatų tiesioginėms užsienio investicijoms (TUI) teoriniai aspektai, analizuojamos šiuolaikinės TUI tendencijos, keliamos hipotezės apie atskirų šalių teikiamas paskatas tiesioginėms užsienio investicijoms ir jų patrauklumą. Šioms hipotezėms patvirtinti ar paneigti vykdomas dviejų etapų tyrimas, kuriuo parodoma, kiek apskritai ir kokias paskatas teikia pasirinktos šalys, taip pat nustatomi paskatų tiesioginėms užsienio investicijoms reitingai, kuriais parodomas skirtingas kiekvienos šalies teikiamų paskatų patrauklumas. Tyrimo rezultatai parodė, jog visos nagrinėjamos šalys teikia skirtingas paskatas tiesioginėms užsienio investicijoms. Įvertinus šalis pagal suminį paskatų investicijoms reitingą, patraukliausios šalys investuotojams yra Vengrija, Rumunija, Latvija. Galiausiai pateikti atlikto tyrimo ribotumai bei rekomendacijos tolesniems šios srities tyrimams. / This paper deals with analyzing investment incentives for foreign direct investment (FDI) concentrating on new European Union countries’ practices (Lithuania, Latvia, Estonia, Poland, Hungary, Slovakia, Czech Republic and Romania). Firstly, the theoretical aspects of FDI incentives are described, then modern trends of FDI are examined and hypotheses about the range and attractiveness of investment incentives in selected countries are formulated. In order to confirm these hypotheses, the carried out research is divided into two stages, where quantity and variety of investment incentives is estimated and summary score of FDI incentives’ attractiveness is attributed to each country, showing how much the incentives’ system is well-favoured by investors. The results of the research identifies a wide range of investment incentives that are currently offered in new EU countries. Also, in conformity with the attributed summary score of FDI incentives, the most attractive countries are Hungary, Romania and Latvia. Finally, the limitations of this research and recommendations for further studies are presented.

Master of Arts / Department of Economics / Yang M. Chang / This paper studies economic factors that affect a multinational’s decision between serving a foreign market via foreign direct investment (FDI) and setting up a joint venture (JV) with a local firm in the host country. The factors that we consider include the substitutability of products produced by competing firms, as well as the hotly debated intellectual property rights (IPRs) protection. In a simple North-South framework, we show that JV is the equilibrium market structure when the degree of R&D spillover is moderate, products are considerably substitutable, and IPRs strong. The government of South needs to maintain a minimum level of IRP to encourage an effective JV. For increasing social welfare, the South also needs to have a policy that limits foreign ownership in a JV.