Thesis advisor: Robert G. Murphy / Rule of law has recently emerged as a possible solution for the promotion of functioning market economies and economic growth in developing countries. It has been argued that an established legal system provides individuals with a clear understanding of the law and consequently, should be more influential on the behavior and decisions of those individuals. This study explores the effects of an established rule of law environment on the relationship between foreign direct investment and economic growth. Several previous studies have analyzed the direct relationship between foreign investment and economic growth. However, none of these studies control for varying levels of legal incentives and property protection. Established legal institutions provide the type of stability that makes investment in a given country more attractive to foreign companies. I also test whether the combination of rule of law and FDI affect the estimated rate of GDP growth. The combination of these two effects would imply that FDI is more likely to create positive economic growth when applied to an economy with established legal institutions. Although the analysis does not fully support the effect of this rule of law—FDI interaction on growth, my analysis does suggest that FDI inflows are most efficient at promoting growth in countries with less legal development. / Thesis (BA) — Boston College, 2008. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics. / Discipline: College Honors Program. / Discipline: Economics Honors Program.

This disssertation investigates spillover effects in the South African SA banking sector using a number of different perspectives and methods. First, I used an adapted model developed by Claessens et al., (2001) and extended by Uiboupin (2005) to identify the effect of the foreign banks’ re-entry on the domestic banks’ performance after the apartheid regime change. The results show that the foreign banks’ entry has an effect on the before-tax profit of domestic banks and increases the competition in SA banking market. Then I further the investigation from an efficiency perspective using a cost efficiency model for the same bank panel. The results show that on average foreign banks are 28% more efficient that domestic banks. But the results show that over the period 2000-10 both categories of banks increased their efficiency level by around 10% and that the origin of the banks as well as their size were the main factors responsible for the efficiency gap. Then results from the implemention of a survey I designed, using an adapted version of Kraft (2002) for the foreign banks and branches, confirm that the entry of foreign banks contributed to the modernisation of the SA banking sector and to the introduction of new products and best practices, leading to the conclusion that spillover effects were localised in the limited segment of the SA wholesale banking. I analyse the impact of recent FDIs in SA banking sector, in terms of knowledge transfer and spillovers. The results show that the acquisition of ABSA (an SA big four) by Barclays (a British bank) generated increased efficiency. That was not the case for the Standard Bank (another of the SA big four), of which a 20% share was acquired by ICBC. The results show that these recent FDIs have no significant impact on competitiors’ behaviour and strategy.

A China está se transformando em uma das principais origens mundiais de Investimentos Externos Diretos (IEDs). No Brasil, os Investimentos Externos Diretos Chineses (IEDCs) têm aumentado desde os primeiros anos deste século, registrando grande elevação principalmente a partir de 2010. Os IEDCs no Brasil são investimentos realizados notadamente por Empresas de Propriedade Estatal (EPEs), principalmente Propriedade Estatal Central (EPECs), cujas principais modalidades de entrada são greenfield e fusões e aquisições. Estes investimentos são determinados pela busca de mercados e recursos naturais e estão concentrados na região Sudeste do país. Esse ganho de relevância do Brasil enquanto destino dos IEDCs motivou a presente pesquisa a responder a seguinte questão: Como o Brasil tem se posicionado, nesse início de século, frente aos Investimentos Externos Diretos Chineses para o país? Tem-se como resultado preliminar que o Brasil pode elevar a entrada desses investimentos e possivelmente os seus transbordamentos tecnológicos, compatibilizando seus interesses econômicos e geopolíticos com os chineses. Porém, parece necessário ao Brasil resolver os aspectos conjunturais e estruturais do crescimento do país que entravam as entradas dos investimentos chineses e de outras nações. / China has become one of the main worldwide sources of Foreign Direct Investment (FDI). In Brazil, Chinese Foreign Direct Investments (CFDI) have increased since the beginning of this century, presenting a higher rate of growth starting in the 2010s. CFDIs in Brazil are investments performed by State-Owned Enterprises (SOEs), especially Central State-Owned Enterprises (CSOEs), whose main entry strategy are greenfield, and mergers & acquisitions. Those investments are guided by the search for markets and natural resources and are concentrated in the Brazilian Southeast. This increased relevance of Brazil as CFDIs destination motivated this research to find answers to the following question: How has Brazil stood, in this century, in terms of Chinese Foreign Direct Investments flowing into the country? Preliminary results show that Brazil can increase the entry these investments and possibly their technological spillovers, harmonizing economic and geopolitical interests with the Chinese. However, it seems necessary to Brazil to solve the cyclical and structural aspects of its growth which discourages the entries of Chinese investments and from other Nations.

This thesis examines how practices of Corporate Social Responsibility (CSR) serve to legitimise Uruguay's largest ever foreign investment, the US$2.5-billion pulp mill constructed by the Finnish-Chilean firm Montes del Plata. Unusually, this investment prompted little social conflict, which runs counter to the community tensions frequently associated with large-scale infrastructure investments in Latin America. To explore this, the thesis takes an agency-oriented approach to the study of corporate-community relations. It offers fresh insights for critical management scholars and anthropologists of corporations into the techniques of collusion and co-optation in large-scale foreign direct investment (FDI) projects. Based on participant observation with Montes del Plata's community relations managers and their community interlocutors, conducted over separate periods during and after the mill's construction, the thesis examines the legitimising impulse of corporate citizenship, both as concept and practice. I show how the company seeks to incorporate itself as a morally-infused entity through ongoing interactions between its representative agents and external actors. I argue that the form of CSR that emerges is neither moral nor responsible, but its command over social relations nonetheless makes it a potent force for corporate capitalism's expansion. The mill owner attempts to manage its social and political relations in such a way as to secure the proximity needed for legitimacy-building, while creating the requisite distance to reduce onerous moral obligations; a balance that I analyse using the concepts of detachment and depoliticisation. The thesis opens with a discussion of the politics of representation, demonstrating how the agents of Montes del Plata (the Corporation) shape the local political ecosystem through the recognition, or not, of its counterparties' claims to representativeness. Chapters 1 and 2 also explore the theory of personation, especially in the efforts by the Corporation's community managers to infuse the company with moral characteristics. Their struggles in doing so invite consideration of a pragmatic approach to legitimacy building through the calculated management of social relations. Chapters 3 and 4 further show how principles of detachment and depoliticisation frame the Corporation's approach to relationship management. Chapter 3 examines how participation and empowerment are utilised to depoliticise development goods and stage the Corporation's detachment from their delivery. Chapter 4 examines the detachment effects of the changes to the region's political economy sparked by the mill project, and how the mill owner depoliticises public expectations of job creation. The conclusion makes the case for a distinctive approach to FDI legitimation driven by detachment (and reattachment) and facilitated by depoliticisation, which I term 'detachable CSR'.

<p>Crude oil can attract a lot of investments and development into a country but when not managed well can as well cause a lot of destruction and conflict. Like fire, crude oil is a good servant but can be a bad master too depending on how it is handled. Using Dunning‟s eclectic paradigm, a positive relationship between foreign direct investment and locational attraction was established. Of the two components within the locational attraction, natural resource attracts more foreign direct investment than market size in the case of Africa. It was established through our case study of Angola that oil attracts foreign direct investment because oil is a location attraction which attracts foreign firms. These investments on the other hand contribute to the productive capacity of the receiving country thus stimulating economic development. However, the availability of natural resources (oil) and its ability to attract foreign investment does not guarantee economic development. The establishment of appropriate institutions, mechanisms and policies would ensure efficient use of oil revenue for sustained economic growth. We identified vital policy options (the Fund mechanism and spending rule) available to Ghana , with inference from Norway, which could help evade the „Dutch Disease‟. Oil production could thus attract more foreign direct investment and contribute to the economic development of Ghana only on condition that appropriate oil revenue management policies are implemented.</p>

<p>Not long ago, Brazil was a country with an unstable economic system; inflation and interest rates were high and the political system was corrupt and complex. Still Brazil has for a long time been a successful market for Swedish companies. In São Paulo, the financial center of Brazil, a “little Sweden” has emerged which is considered to be the largest center for Swedish industry outside of Sweden.</p><p>The purpose of this thesis is to examine why a ‘little Sweden’ has emerged in Brazil as well as examining what importance different economical factors have had for Swedish foreign direct investments in Brazil. Theories regarding foreign direct investments as well as other business theories have been used in the research. To get a deep understanding of the subject, four interviews have been made with organizations involved in helping Swedish companies in Brazil.</p><p>The research has shown that the most important factors in the creation of the ‘little Sweden’ has been; access to production factors such as natural resources, the competitiveness of the home market together with the size of Brazil’s market, the financial capacity of the Swedish companies, the fact that Swedish companies could offer products and services that suited the demands of Brazil, as well as the fact that the Swedish entrepreneurs had a long term thinking and a great optimistic visions for the future.</p>

In this paper a comparative exploration of the potential for foreign investment and real inflow to Russia and Ukraine are examined. The analysis showed that primarily both countries enjoyed significant comparative advantages in attracting foreign capital. Since the foundation of independent states in 1992 attractiveness began to diverge dramatically. This difference is clearly explained by the determination of the Russian government to reform the economy earlier than the Ukrainian government. The transition to a market economy is closely connected with the development of a favorable investment climate in both countries. It includes the foundation of a stable system of property rights and a conducive legal environment.

The purpose of this paper is to examine whether foreign direct investment, FDI, has any impact on economic growth in Mexico. In order to find a possible connection I use a multiple regression analysis with GDP per capita as dependent variable. Furthermore, I critically examine previous studies of FDI and its effect on GDP per capita in Mexico as well as other studies with several developed and developing countries. The difference between this paper and previous studies is that the data is more up-to-date here. My results, like most of the previous studies, do not indicate on any statistical significance that FDI has a positive effect on economic growth. FDI do however seem to produce positive spillover effects on the domestic economy, mainly through knowledge and technological spillovers.

Crude oil can attract a lot of investments and development into a country but when not managed well can as well cause a lot of destruction and conflict. Like fire, crude oil is a good servant but can be a bad master too depending on how it is handled. Using Dunning‟s eclectic paradigm, a positive relationship between foreign direct investment and locational attraction was established. Of the two components within the locational attraction, natural resource attracts more foreign direct investment than market size in the case of Africa. It was established through our case study of Angola that oil attracts foreign direct investment because oil is a location attraction which attracts foreign firms. These investments on the other hand contribute to the productive capacity of the receiving country thus stimulating economic development. However, the availability of natural resources (oil) and its ability to attract foreign investment does not guarantee economic development. The establishment of appropriate institutions, mechanisms and policies would ensure efficient use of oil revenue for sustained economic growth. We identified vital policy options (the Fund mechanism and spending rule) available to Ghana , with inference from Norway, which could help evade the „Dutch Disease‟. Oil production could thus attract more foreign direct investment and contribute to the economic development of Ghana only on condition that appropriate oil revenue management policies are implemented.

Not long ago, Brazil was a country with an unstable economic system; inflation and interest rates were high and the political system was corrupt and complex. Still Brazil has for a long time been a successful market for Swedish companies. In São Paulo, the financial center of Brazil, a “little Sweden” has emerged which is considered to be the largest center for Swedish industry outside of Sweden. The purpose of this thesis is to examine why a ‘little Sweden’ has emerged in Brazil as well as examining what importance different economical factors have had for Swedish foreign direct investments in Brazil. Theories regarding foreign direct investments as well as other business theories have been used in the research. To get a deep understanding of the subject, four interviews have been made with organizations involved in helping Swedish companies in Brazil. The research has shown that the most important factors in the creation of the ‘little Sweden’ has been; access to production factors such as natural resources, the competitiveness of the home market together with the size of Brazil’s market, the financial capacity of the Swedish companies, the fact that Swedish companies could offer products and services that suited the demands of Brazil, as well as the fact that the Swedish entrepreneurs had a long term thinking and a great optimistic visions for the future.