This study examined the role of good governance in promoting tourism in emerging South Asian countries and also tested the mediating role of foreign direct investments. The study used panel data ...collected from seven South Asian countries from 1996 to 2018. Panel data regression models were estimated to test the research hypotheses. The results showed that country's good governance has a positive and significant influence on tourism receipts and arrivals. Moreover, the mediation analysis results supported that foreign direct investments mediated the relationship between good governance indicators like government effectiveness, political stability, voice and accountability and control over corruption and tourism. Based on the results, the study proposed the Governance-led-FDI and FDI-led-Tourism hypotheses, the study's main contribution. The study has implications for the government regulatory agencies relating to governance, tourism departments, foreign prospect investors and policymakers.
This study examines the learning effect of multinational enterprises' (MNEs) failure experience in foreign direct investment (FDI). We also examine the contingent effects of two key investment ...attributes: cultural distance between the host countries and the MNE's home country and entry mode. Using a longitudinal dataset of Korean foreign direct investments during 1990–2011, we find that an MNE's prior FDI failure experience is negatively related to the failure likelihood of a focal subsequent FD, indicating a learning effect of FDI failure experience. Our results show that this learning effect weakens, as the cultural distance between the host countries of prior failed FDIs and South Korea, or the joint venture percentage among prior failed investments increases; however, those interaction effects become insignificant when a focal subsequent FDI is in a culturally different country, or a JV. This study enriches the literature on learning from failure and research on experiential learning in FDI by demonstrating the boundary conditions of the learning effect of the FDI failure experience of MNEs.
The Paris Agreement has united the global nations to embark on pathways to the decarbonization of their respective economies. However, the objective of achieving low-carbon growth is not as ...straightforward as it seems since the rapidly emerging and fossil fuel-dependent world economies are focused on expediting economic growth at the expense of poorer environmental consequences. Against this background, this study aims to explore the effects of foreign direct investments, governance, democracy, renewable energy use, and economic growth on carbon dioxide emissions in the context of the BRICS countries over the period from 2006 to 2017. The estimation strategy involved in this study specifically accounts for addressing the issues of cross-sectional dependency and slope heterogeneity in the data set utilized for analysis. The associated findings reveal cointegrating associations between the study variables. Besides, the regression outcomes reveal that good governance (achieved by controlling corruption) and strong democracy (achieved by ensuring greater freedom for journalists) help to reduce carbon dioxide emissions in the long run. More importantly, the results also confirm that both good governance and stronger democracy further reduce carbon dioxide emissions by mediating between emission-inhibiting effects of foreign direct investment inflows in the BRICS countries. In addition, good governance and stronger democracy exert moderating effects to reduce the emission-stimulating impacts associated with higher economic growth. Lastly, it is also witnessed that forgoing non-renewable energy use and adopting renewable energy instead help to curb the carbon dioxide emission levels further. Accordingly, considering these key findings, it is recommended that the BRICS countries should enhance the quality of governance and democracy, attract clean foreign direct investments, promote renewable energy use, and adopt clean economic growth strategies to decarbonize their respective economy.
One of the main conditions for the Russian economy transition to growth rates above the global average is large-scale investment. The so-called «smart investments» are important for the accelerated ...economic development of Russia. Only a restricted range of states is a source of «smart investment». France is among them and it is a long-standing economic partner of Russia. French business implements long-term projects in Russia. After the economic sanctions being introduced, not a single company has left Russia; however, new investors do not come from France, and the operating investors evaluate the prospects for continuing work very carefully. As there is the economic sanctions mode, lending agencies in France, being afraid of losing their business in the United States, refuse to finance projects in Russia, even if they are not included into the sanctions list. Local manufacturing content of French companies still does not cover a wide range of areas in Russia, being limited mainly to agriculture. Compared to French, Russia’s investment contribution to France is disproportionately small. The article examines the factors determining the direct investment of France in Russia; the current investment agenda of French business in Russia; identifies the prospects for France’s investment participation in the Russian economy
Recent research suggests that the distance between countries in terms of culture, institutions, geographic proximity, and economic development matters in the foreign direct investment (FDI) decisions ...made by firms. This study focuses on the historical ties between countries as an additional factor affecting such decisions. In particular, it examines three major historical factors that affect cross-country ties with Vietnam, namely, Chinese occupation and conflict, French colonization, and socialist ideology, and examines the ways in which these historical ties have influenced FDI. The database consists of 631 wholly owned subsidiaries and 1215 joint ventures formed in Vietnam by multinational enterprises from 35 countries and regions between 1989 and 1999. The results indicate that firms from Hong Kong, Taiwan, France, and former and current socialist countries tended to be early movers in Vietnam, whereas firms from Mainland China tended to be late movers. Using the example of Vietnam, this study clearly shows that historical ties can provide additional explanatory power regarding FDI decisions beyond the conventional distance variables.
The article analyzes the participation of foreign investors in the implementation of investment projects in the Arctic zone of the Russian Federation. The features of organizing foreign investments ...at the regional level are considered. The dynamics of indicators of attracting foreign investment in the Russian Arctic in 20162021 is analyzed. It is noted that in the last few years, the attraction of loans from foreign banks has decreased to a minimum, and the entire volume of investment was carried out at the expense of direct investments by foreign investors in large megaprojects of the Russian Arctic. The situation with the involvement of foreign investors in Arctic projects in the context of geopolitical tensions in 2022 is as-sessed. It is concluded that Western companies are currently withdrawing their assets from joint Arctic projects, while the potential for investment cooperation with Asian, Latin American and Turkish partners in the Arctic zone of the Russian Federation is increasing. It has been established that the withdrawal of Western investors from joint Arctic projects carries not only financial risks associated with the search for new sources of investment, but also technological risks that necessitate the development of alternative options for obtaining the necessary equipment. As ways to overcome the difficulties associated with the withdrawal of Western investors from Russian Arctic projects, it is proposed to intensify direct state financing of the implementation of infrastructure facilities based on the program method, as well as to direct efforts to create interstate mechanisms for financing large Arctic projects with friendly countries interested in the development of Arctic policy within the framework of existing BRICS and SCO associations.
Previous studies have proposed that a compensatory model predicts the level of foreign direct investment (FDI) in a country; FDI levels are a result of 'trade-offs' between the positive effect of ...market attractiveness and the negative influence of corruption. In contrast, we hypothesize and find that the compensatory relationship only holds for market-seeking investment; for resource-seeking FDI the model appears to be noncompensatory. Greater market attractiveness mitigates the negative impact of corruption on market-seeking investment, but the ability of market attractiveness to mitigate the negative impact of corruption on resource-seeking FDI quickly disappears as corruption levels increase. Implications and future research directions are discussed.
Bilateral investment treaties (BITs), agreements that provide extensive rights and protection to foreign investors, were first adopted in the 1960s, proliferated in the late 1980s and 1990s, ...especially among developing countries, and seemingly fell out of fashion after 2001. To explain this life cycle of diffusion across the international state system, we argue that BIT signing followed a traditional logic of diffusion for an innovation albeit here in the policy realm. In the first period, BITs provided a solution to the time inconsistency problem facing host governments and foreign investors. In the second period, these treaties became the global standard governing foreign investment. As the density of BITs among peer countries increased, more countries signed them in order to gain legitimacy and acceptance without a full understanding of their costs and competencies. More recently, as the potential legal liabilities involved in BIT signing have become more broadly understood, the pattern of adoption has reverted to a more competitive and rational logic. Our empirical tests of BIT signing over four decades provide evidence for such a three-stage model.
Küresel finansal risk göstergeleri ile ülkeye özgü kredi risk göstergeleri ülkelere giren doğrudan yabancı yatırımlar (DYY) üzerinde farklı etkilere neden olmaktadır. Bu risklerle birlikte kredi ...derecelendirme kuruluşları tarafından ülkelere verilen kredi derecelendirme notları da uluslararası yatırım kararlarını dolayısıyla doğrudan yabancı yatırımları etkileyebilmektedir. Buradan hareketle bu çalışmada, Türkiye için 2002:Q1-2021:Q4 dönemi boyunca VIX endeksi, CDS primleri ve kredi derecelendirme notlarının DYY üzerindeki etkilerinin araştırılması amaçlanmıştır. Araştırmada metodoloji olarak ARDL sınır testi yaklaşımı kullanılmıştır. ARDL sınır testi sonucuna göre, Türkiye’de DYY ile VIX endeksi, CDS primleri ve kredi derecelendirme notlarının uzun dönemli bir ilişkisinin olduğu tespit edilmiştir. ARDL eşbütünleşme analizinde tahmin edilen uzun dönem katsayılarına göre, Türkiye’ye giren DYY üzerinde VIX endeksinin ve Moody’s kredi derecelendirme notlarının etkisinin negatif ve anlamlı olduğu; Fitch tarafından verilen kredi derecelendirme notlarının ise pozitif ve anlamlı bir etkisinin olduğu sonuçlarına varılmıştır.
Anahtar Kelimeler: Doğrudan yabancı yatırımlar, Kredi Derecelendirmeleri, VIX Endeksi, CDS Primleri.
JEL Sınıflandırması: C22, F20, G24
Global financial risk indicators and country-specific credit risk indicators cause different effects on foreign direct investments (FDI) coming to countries. Along with these risks, the credit ratings given to the countries by the credit rating agencies can also affect the international investment decisions and thus the foreign direct investments. From this point of view, in this study, it is aimed to investigate the effects of VIX index, CDS premiums and credit rating grades on FDI for Turkey during the period 2002:Q1-2021:Q4. ARDL bounds test approach was used as a methodology in the research. According to the ARDL boundary test result, it has been determined that there is a long-term relationship between FDI and VIX index, CDS premiums and credit rating grades in Turkey. According to the long-term coefficients estimated in the ARDL cointegration analysis, it was concluded that the effect of the VIX index and Moody's credit rating ratings on the FDI entering Turkey was negative and significant, and the credit ratings given by Fitch had a positive and significant effect.
Key Words: Foreign Direct Investments, Credit Ratings, VIX, CDS Premium.
JEL Classification: C22, F20, G24
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