Volatile factor cost developments urge manufacturing firms to increase production efficiency by building up facilities in multiple countries. Differing from previous work that examines the quality of ...individual locations for investment, the study evaluates the net present value, the growth option value, and the operational flexibility value of the existing production network to predict the establishment of a new site. The results on a sample of 352 German manufacturing firms suggest that the direction, uncertainty, and diversity of labor cost movements in the extant locations influence the propensity to set up a new production subsidiary. Analyzing the international production network after the expansion shows that the new location increases the value of the network regarding these dimensions.
One of the most commonly debated concerns regarding foreign direct investment inflows is the associated environmental adversities that accompany the influx of foreign funds. As a result, assessing ...the environmental impacts of foreign direct investment inflows is necessary for achieving environmentally friendly economic growth in the contemporary era. Accordingly, the global economies including the members of the Group of Twenty (G-20) should focus on attracting clean foreign direct investments. Against this backdrop, controlling for energy consumption and urbanization, this extant study scrutinizes the effects of foreign direct investment inflows on the carbon dioxide emission figures of selected G-20 countries between 1992 and 2018. The econometric analysis conducted in this paper involves recently developed methods that are efficient in handling cross-sectionally dependent heterogeneous panel data sets. Besides, the analysis is also conducted for sub-panels of high-, upper-middle-, and lower-middle-income G-20 countries to evaluate the possible heterogeneous environmental effects across the G-20 countries belonging to different income levels. Overall, the results highlight that higher foreign direct investment inflows surge carbon dioxide emissions whereby the pollution haven hypothesis is evidenced to hold for the G-20 nations of concern. Similarly, both at the aggregated and disaggregated levels, greater consumption of energy is witnessed to boost carbon dioxide emissions in the long run. Moreover, urbanization is found to trigger carbon dioxide emissions for the G-20 nations overall and the lower-middle-income G-20 nations. Further, the causality analysis reveals that carbon dioxide emissions have bidirectional causal relationships with foreign direct investment inflows, energy consumption, and urbanization. In line with these major findings, this study recommends that the governments of the G-20 countries inhibit inflows of dirty foreign direct investments, reduce fossil fuel dependency, and adopt green urbanization policies for achieving higher economic growth without marginalizing environmental well-being.
We build on previous research on the behavioral theory of the firm to examine the relationship between performance shortfalls and internationalization. We start from existing literature in claiming ...that the interplay between the aspirations of restoring performance and survival concerns leads to an inverted U-shaped relationship between a firm's performance shortfalls and its new internationalization. Our main contribution is to show that CEO duality moderates this relationship. Dual CEOs have a high control of the board that reduces oversight and increases their job security. This allows them to impose their risk preferences, thus embracing survival over aspirations. Our empirical analysis using a sample of Spanish listed firms from 1986 to 2010 provides support for our hypotheses.
Abstract
Achieving environmental sustainability has become a core policy agenda of the Moroccan government. The nation’s monotonic dependence on fossil fuels for meeting the local energy demand has ...been acknowledged as the major cause of environmental distress. Besides, Morocco has traditionally been a major importer of fossil fuels whereby the nation’s fossil fuel dependency could not be phased out to a large extent. Consequently, the greenhouse gas emission figures of Morocco have persistently surged over the years. Moreover, Morocco has large reserves of untapped renewable energy sources which can be employed for producing power without significantly degrading the environment. Against this backdrop, this study explores the renewable energy consumption-carbon dioxide emissions nexus, controlling for economic growth, financial development, and foreign direct investment inflows, in the context of Morocco over the period between 1980 and 2017. In addition, along with the direct impacts, the indirect environmental impacts associated with renewable energy consumption are also scrutinized in this study. The empirical strategy involves the application of econometric methods that are robust to handling structural break issues in the data. Overall, the results reveal that renewable energy consumption curbs carbon dioxide emissions both in the short and long run. In contrast, financial development and foreign direct investment inflows boost carbon dioxide emissions in Morocco. However, these adverse environmental impacts are partially neutralized by facilitating greater renewable energy use within Morocco. The results indicate that renewable energy consumption interacts with financial development and foreign direct investment inflows to jointly reduce the carbon dioxide emission figures of Morocco in the long run. Furthermore, the findings also validate the environmental Kuznets curve hypothesis in the long run only. In line with these key findings, it is recommended that the Moroccan government should adopt relevant policies that can help the nation overcome the existing barriers faced in transitioning from non-renewable to renewable energy use. Simultaneously, it is also necessary for Morocco to achieve environmentally sustainable economic growth by greening its financial sector and revisiting its financial globalization policies.
Oman is a Middle Eastern country that has traditionally been monotonically reliant on its indigenous fossil fuel supplies. Besides, the nation has also been a surplus producer and net exporter of oil ...which further highlights the prolonged fossil fuel dependency of Oman. Consequently, despite flourishing economically, environmental quality in Oman has persistently aggravated. These opposing economic and environmental performances have necessitated Oman to identify the factors which can enable Oman to decarbonize its economy for tackling the environmental concerns faced by the nation. Against this backdrop, this study aims to examine the symmetric and asymmetric effects of foreign direct investments, economic growth, and capital investments on carbon dioxide emissions in Oman during 1980–2019. Using relevant econometric estimation methods for controlling structural break concerns in the data, the findings reveal evidence of asymmetric environmental impacts associated with shocks to the nation’s foreign direct investment inflow, economic growth, and capital investment figures. Specifically, it is witnessed that positive shocks to the levels of foreign direct investment inflows, economic growth, and capital investments boost carbon dioxide emissions both in the short and long run. On the other hand, negative shocks to the levels of foreign direct investment inflows and economic growth are witnessed to reduce the emissions. Besides, the findings also validate the environmental Kuznets curve and pollution haven hypotheses in the context of Oman. Hence, considering these key findings, it is recommended that Oman should ideally pursues green economic growth policies by restricting inflows of unclean foreign direct investments and green its financial sector in order to collectively minimize its carbon dioxide emission figures.
Foreign direct investments in the Republic of Croatia has been systematically monitored since 1993. During the war years, the inflow of foreign capital, both in the form of direct and portfolio ...foreign investments, was insignificant. Significant foreign investment activity has been present since 1996. Aware of the importance that FDI (Foreign Direct Investment) can have on the recipient country, both as a factor in accelerated economic development, and as a source for financing the deficit on the current account of the balance of payments, Croatia has declaratively promoted a policy of attracting foreign capital. Although in the first few years after the war this promotion was mostly aimed at the Croatian diaspora, under the pressure of the international community, privatization began in the banking and telecommunications sector, and since the post-war years, the largest amount of foreign capital has been directed there. Thus, in the second part of the 1990s, after the normalization of the situation in the country, Croatia collected a total of nominally around USD 4.5 billion in foreign direct investment, mostly through privatization, and the largest inflow of foreign currency was realized in 1999, in the amount of 1, 2 billion USD (first round of privatization of HT). This paper analyses the factors affecting foreign direct investment and the strengths, weaknesses, threats and opportunities for encouraging the inflow of foreign direct investment into the economic framework of the Republic of Croatia and presents the competitiveness index of the structures and activities of foreign direct investment in the Republic of Croatia. In conclusion, it can be emphasized that since independence, the Republic of Croatia has been making efforts to attract as many foreign investments as possible, while achieving limited results.
Many international business (IB) studies have used foreign direct investment (FDI) stocks to measure the aggregate value-adding activity of multinational enterprises (MNE) affiliates in host ...countries. We argue that FDI stocks are a biased measure of that activity, because the degree to which they overestimate or underestimate affiliate activity varies systematically with host-country characteristics. First, most FDI into countries that serve as tax havens generate no actual productive activity; thus FDI stocks in such countries overestimate affiliate activity. Second, FDI stocks do not include locally raised external funds, funds widely used in countries with well-developed financial markets or volatile exchange rates, resulting in an underestimation of affiliate activity in such countries. Finally, the extent to which FDI translates into affiliate activity increases with affiliate labor productivity, so in countries where labor is more productive, FDI stocks also result in an underestimation of affiliate activity. We test these hypotheses by first regressing affiliate value-added and affiliate sales on FDI stocks to calculate a country-specific mismatch, and then by regressing this mismatch on a host country's tax haven status, level of financial market development, exchange rate volatility, and affiliate labor productivity. All hypotheses are supported, implying that FDI stocks are a biased measure of MNE affiliate activity, and hence that the results of FDI-data-based studies of such activity need to be reconsidered.
This paper examines the linkage effects of foreign direct investment (FDI) on firm-level productivity in Chinese manufacturing. It is found that FDI generates positive vertical linkage effects in ...Chinese manufacturing at both the national and regional levels, and limited positive horizontal spillovers at the regional level. While OECD firms gain from both vertical and (probably) horizontal linkages, Hong Kong, Macao and Taiwanese firms benefit only from backward linkage effects. In the domestic sector, in which we are most interested, both state-owned enterprises (SOEs) and non-SOEs are hurt by competition from foreign firms in the same industries. While SOEs gain from vertical linkages with foreign firms, non-SOEs are unable to do so. The patterns of productivity spillovers from FDI in Chinese manufacturing seem to be determined by one key factor - the technological capabilities of the firms involved. Important data limitations and policy implications of this research are discussed.
Subject of research is foreign investments. The purpose of this article is a study of the nature and peculiarities of attracting foreign investments into the Ukrainian economy through the stock ...market. Methods which were used in course of research: method of system-structural analysis and synthesis, method of comparative analysis, generalization, general scientific, special methods of scientific knowledge and other methods of research. Study results. The role of attracting investments into the country's economy is characterized. The essence, importance and necessity of intensifying the investment function and the participation of households in economic relations with regard to the purchase of various financial assets in the stock market are investigated. Negative phenomena in investment activity are identified and the main ways of improving the investment climate of Ukraine are identified. Application of results. The results of the study can be used in the activities of the Ministry of Finance of Ukraine, the Verkhovna Rada of Ukraine, the National Securities and Stock Market Commission, as well as in higher education institutions in teaching economic disciplines. Conclusions. Reinvigorating economic, including investment and innovation, and improving social conditions on this basis is only possible through decisive, comprehensive and consistent market reforms that will free up entrepreneurial initiative, create a competitive environment and provide the economy with incentives for effective development.
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