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Begin New Search Topic Economics Content Type Policy Brief Publishing Institution Columbia Center on Sustainable Investment

41. Inward foreign direct investment: Does it enable or constrain domestic technology entrepreneurship?

Author:
Saurav Pathak, André Laplume, and Emanuel Xavier-Oliveira
Publication Date:
12-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Whether or not foreign direct investment (FDI) is essential for domestic technological and economic development remains a contentious question. The controversy is illustrated by comparing the Celtic and Asian Tigers experiences from 1995 to 2000. Based on IMF and World Bank data in constant prices, Ireland and China averaged an annual growth rate of 8% in GDP per capita. However, FDI per capita grew at an average pace of 98% per year in Ireland, while in China it decreased by 1% -- absolute values averaged US$ 3,397 versus US$ 144, respectively. This suggests that, rather than a one-policy-fits-all approach, customized policies are more appropriate; and, if any generalization can be made, it should be based on a country's stage of economic development.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Israel and Asia

42. Evaluate Sustainable FDI to Promote Sustainable Development

Author:
John M. Kline
Publication Date:
11-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Prescriptions to increase the role of FDI in promoting sustainable development generally focus on the macro level -- getting policies right and otherwise improving the investment climate. These steps are necessary but not sufficient. Effective implementation processes, especially at the micro project level, are also essential to encourage FDI that matches host country development needs and priorities.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, and Foreign Direct Investment

43. Is Chinese FDI pushing Latin America into natural resources?

Author:
Miguel Pérez Ludeña
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Chinese foreign direct investment (FDI) in Latin America is a recent phenomenon. Although the China National Petroleum Corporation and other companies have been present in Peru, Ecuador and Venezuela since the early 1990s, large projects have been pursued only since 2006, following an extended period of high commodity prices. The Economic Commission for Latin America and the Caribbean (ECLAC) estimated that there were US$ 15 billion of Chinese FDI inflows into Latin America in 2010, 90% of which were in extractive industries. This further contributed to the already high percentage of Chinese FDI flows to the region that are in natural resources. At a time of high economic growth fueled by commodity exports and strong currency appreciation (particularly in Brazil), FDI into extractive industries strengthens the region's specialization in primary products at the expense of manufacturing and other activities.
Topic:
Economics, International Trade and Finance, Markets, Natural Resources, and Foreign Direct Investment
Political Geography:
China, Brazil, Latin America, and Peru

44. The unbalanced dragon: China's uneven provincial and regional FDI performance

Author:
Karl P. Sauvant, Chen Zhao, and Xiaoying Huo
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Among developing countries, China attracts most foreign direct investment (FDI). Where is this investment located within China, what explains its distribution and what are policy implications? We used UNCTAD's FDI Performance Index to answer the first question. Although developed for countries , it can be applied to sub-national units. It uses provincial GDP to ascertain whether a given territorial unit has received FDI inflows as expected from its economic size. Standardizing the data accordingly reveals three clusters of provinces for 2007-2010 (table 1, figure 1 below): The first cluster encompasses virtually all coastal provinces: they have an index value above 1, i.e. perform better than their economic size would lead one to expect. They account for 9 of the top 11 performers of Mainland China's 31 provinces, municipalities and autonomous regions (“provinces”). The provinces in the middle cluster underperform (index value of 1-0.5). They include 5 central provinces, but also 3 western and 2 coastal provinces. The provinces in the bottom cluster underperform significantly (index value below 0.5), comprising primarily the country's western provinces (8 out of the 10 provinces in this cluster).
Topic:
Development, Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
China

45. Different investment treaties, different effects

Author:
Clint Peinhardt and Todd Allee
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The proliferation of investment treaties is perhaps exceeded only by academic studies of those treaties. Legal scholarship has long been attentive to the evolution in international investment agreement (IIA) content -- but until recently, quantitative assessments of IIAs have tended to treat them as interchangeable: the only measure of investor protections encoded in IIAs is whether a treaty had been signed and/or entered into force. Thankfully, the United Nations Conference on Trade and Development has been at the forefront of capturing not just IIAs' proliferation but also the evolution in their content. Its work shows that treaties apply for differing durations, have conflicting procedures for termination and include varying definitions of even basic terms, such as “investors” and “investment.” Other quantitative studies have begun to measure these variations, focusing initially on differences in dispute resolution. 1 Some IIAs demand that investors choose between domestic and international dispute resolution; some provide explicit consent of both parties to international arbitration; and some designate a particular forum for arbitration, whereas others specify multiple options. Of course, IIAs vary across many dimensions, but our initial examination of dispute resolution provisions alone demonstrates the importance of examining IIA content.
Topic:
Economics, International Trade and Finance, Markets, Treaties and Agreements, and Foreign Direct Investment
Political Geography:
United Nations

46. National companies or foreign affiliates: Whose contribution to growth is greater?

Author:
Alice H. Amsden
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
A priori, is there a growth/efficiency justification for government programs designed to support and promote national companies (public and private) as opposed to, and in competition with, opening the doors to multinational enterprises (MNEs)? In competitive markets, there should be no difference. Where national companies close in capabilities to foreign affiliates do not exist, foreign direct investment (FDI) may stimulate development, if a country is lucky enough to attract it. But in the imperfect markets that characterize the BRICs and other emerging markets, where foreign affiliates may crowd out excellent but inexperienced national firms, the question arises as to which type of enterprise policy makers should encourage for the long run. Historically, policy makers used tariffs to promote national firms (a “race to the bottom”). Today they use investments in science and technology (a “race to the top”).
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment

47. The (lack of) women arbitrators in investment treaty arbitration

Author:
Gus Van Harten
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Investment arbitration has a remarkably poor record on representation of women. This calls for reform of the appointments process for arbitrators, who make important policy choices in the context of global governance.
Topic:
Economics, Gender Issues, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Europe

48. The public law challenge: Killing or rethinking international investment law?

Author:
Stephan W. Schill
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
At the heart of the so-called “legitimacy crisis” of international investment law, prominently reflected in the Public Statement on the International Investment Regime, is what I call the public law challenge. It builds on the observation that one-off appointed arbitrators, instead of standing courts, review government acts and reach far into the sphere of domestic public law by crafting and refining the standards governing in vestor-state relations. Arbitrations against Uruguay and Australia concerning cigarette packaging are the most recent examples of genuinely public law disputes now settled in arbitration. The disputes about Argentina's emergency legislation and Canada's ban on pesticide s are others. These arbitrations create friction with domestic public law as arbitrators, having little democratic legitimacy, often operate in non-transparent proceedings and produce increasing amounts of incoherent decisions.
Topic:
Economics, International Law, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Canada, Argentina, and Australia

49. The standing of state-controlled entities under the ICSID Convention: Two key considerations

Author:
Mark Feldman
Publication Date:
04-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The ICSID Convention, under Article 25(1), applies only to those investment disputes that are between a contracting state and a “national” of another contracting state. Given that limitation, and in light of the significant and growing amount of foreign investment by state-controlled entities (SCEs), ICSID tribunals likely will need to address one fundamental issue with greater frequency: whether disputes arising from SCE investments constitute investor-state disputes falling within, or state-to-state disputes falling outside of, the scope of the ICSID Convention.
Topic:
Development, Economics, Markets, Foreign Direct Investment, and Governance

50. State-controlled entities control nearly US$ 2 trillion in foreign assets

Author:
Karl P. Sauvant and Jonathan Strauss
Publication Date:
04-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Developing country sovereign wealth funds (SWFs) as players in the world foreign direct investment (FDI) market have received considerable attention. While outward FDI from emerging markets has indeed risen dramatically, that by SWFs has been negligible: their outward FDI stock is around US$ 100 billion (compared to a world FDI stock of US$ 20 trillion in 2010).
Topic:
Development, Economics, Emerging Markets, Government, International Law, and Foreign Direct Investment
Political Geography:
United States

51. FDI, catch-up growth stages and stage-focused strategies

Author:
Terutomo Ozawa
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
This is a reply to Francisco Sercovich's commentary on my Perspective on FDI-led industrial takeoff in which I described foreign direct investment (FDI) as an ignition for catch-up industrialization. He emphasized "the rich and nuanced variety of strategic options" (e.g., S policies, engineering education, chaebol-type enterprises for technology absorption, R capabilities), which are, however, relevant only to higher-stages of catch-up, but notto the kick-off stage with which my previous Perspective was concerned. Economic development derives from structural changes at different stages of growth, requiring stages-focused strategies.
Topic:
Development, Economics, International Trade and Finance, Markets, and Foreign Direct Investment

52. Economic patriotism: Dealing with Chinese direct investment in the United States

Author:
Sophie Meunier
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
China is investing throughout the world, in industries from automobiles to zinc. In the US, Chinese foreign direct investment (FDI) accounted for only 0.25% of total FDI stock in 2010,but it is likely to increase as China diversifies its holdings and seeks to obtain technology, managerial know-how and easier access to US consumers. As these investments multiply, we expect a few cases to attract negative attention in the media and political arena. Chinese companies are predominately state-controlled, raising the specter that they act to fulfill strategic, rather than profit maximizing, goals. China is also an ideological rival, causing irrational concern that Chinese investment in the US may act as a Trojan Horse of Chinese values and politics --fueled by rational concerns about subsidies, piracy, and economic espionage.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
United States and China

53. Emerging challengers in knowledge-based industries? The case of Indian pharmaceutical multinationals

Author:
Gert Bruche
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The growth of outward foreign direct investment (FDI) from developing countries and of a new generation of “emerging multinational enterprises” (EMNEs) has stimulated a flurry of publications. EMNEs have been portrayed as on their way to adulthood, latecomers that leapfrog into advanced positions, emerging giants, and challengers of conventional multinational enterprises (MNEs) from advanced economies.
Topic:
Development, Economics, and Foreign Direct Investment
Political Geography:
South Asia and India

54. Why and how least developed countries can receive more FDI to meet their development goals

Author:
Ken Davies
Publication Date:
06-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The 48 least-developed countries (LDCs), most of them in sub-Saharan Africa and a few in Asia, need foreign direct investment (FDI) to help meet their development targets. The FDI they now receive, although inadequate, is enough to demonstrate that investors see potential in them. It is therefore realistic for LDCs to seek more FDI, but they need to enhance their investment environments to attract it in the much greater quantities required. Donors can help by targeting official development assistance (ODA) on investment in human capital and supporting governance improvements. Meanwhile, LDCs should establish effective investment promotion agencies (IPAs).
Topic:
Development, Economics, Poverty, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa and Asia

55. The role of multinationals in sparking industrialization: From "infant industry protection" to "FDI-led industrial take-off"

Author:
Terutomo Ozawa
Publication Date:
06-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Although not yet fully conceptualized as a new catch-up model in mainstream development economics, the infant industry argument (protectionism designed to replace imports with domestic substitutes) is giving way to a foreign direct investment (FDI)-led model of industrialization.
Topic:
Development, Economics, Industrial Policy, and Foreign Direct Investment
Political Geography:
United States, Japan, and China

56. Responsible agricultural investment: is there a significant role for the law to promote sustainability?

Author:
Nicolás Marcelo Perrone
Publication Date:
05-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The world food situation is back in the headlines as price levels surpass 2008 peaks, confirming the rising trend in food markets. Higher prices pose challenges to both food importing and exporting countries. One serious barrier to increasing food output remains the lack of necessary capital and technology in countries that have the potential to increase production rapidly. To avoid a food crisis, international organizations and several governments have increasingly turned to promoting foreign direct investment (FDI) by multinational enterprises (MNEs) in agriculture. This may be an effective solution, but some obstacles stand in the way of the establishment of such projects and, more importantly, their long-term sustainability.
Topic:
Agriculture, Economics, Markets, Food, and Foreign Direct Investment

57. The coming harmonization of climate change policy and international investment law

Author:
Daniel M. Firger
Publication Date:
05-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Developments in climate change policy and international investment law may be ushering in a new era characterized by profound harmonization between the two regimes. Although policy instruments such as the Kyoto Protocol's “Clean Development Mechanism” (CDM) have been in existence for years, it is only relatively recently that the international community has turned to low-carbon foreign direct investment (FDI) and away from command-and-control regulation as the preferred means by which to achieve future greenhouse gas emissions reductions. Meanwhile, states have begun to renegotiate international investment agreements (IIAs) or sign new treaties to take into account policy goals, including climate change mitigation, that extend beyond the regime's traditional preoccupation with investor protection. Though still somewhat tentative, emerging trends in both arenas are thus showing unmistakable signs of convergence.
Topic:
Climate Change, Economics, Industrial Policy, and Foreign Direct Investment
Political Geography:
United States and China

58. Are resurging state-owned enterprises impeding competition overseas?

Author:
Nilgün Gökgür
Publication Date:
04-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
There are no up-to-date systematic data on the size, composition, ownership structure, and economic weight of state-owned enterprises (SOEs), so we are unable to assess the impact of SOE performance on stakeholders in domestic and overseas markets. Yet there is sufficient evidence of their expansion, especially following the 2008 financial crisis. Emerging markets, led by China, are now increasingly encouraging their SOEs to expand globally as multinational enterprises (MNEs).
Topic:
Economics, Emerging Markets, Globalization, and Markets
Political Geography:
Africa and China

59. Is the party-appointed arbitrator a "pernicious institution"? A reply to Professor Hans Smit

Author:
Giorgio Sacerdoti
Publication Date:
04-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Some readers of the Columbia FDI Perspective No. 33 of December 14, 2010 may have been surprised to read Hans Smit's contribution against party-appointed arbitrators. The opening of his Perspective could not be expressed in more sweeping terms: "In my judgment, party-appointed arbitrators should be banned unless their role as advocates for the party that appointed them is fully disclosed and accepted. Until this is done, arbitration can never meet its aspiration of providing dispassionate adjudication..."
Topic:
Economics, Human Rights, Foreign Direct Investment, and Law
Political Geography:
United States

60. FDI stocks are a biased measure of foreign affiliate activity

Author:
Sjoerd Beugelsdijk, Jean-François Hennart, Arjen Slangen, and Roger Smeets
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Researchers often call the value added (VA) in a host country by firms based in another country foreign direct investment (FDI) and use FDI stocks and flows from a country's balance of payments to measure it. What FDI stocks and flows actually measure, however, is narrower, since they record long term financial transactions by which domestic firms exert control over foreign firms. French FDI stocks in Australia, for example, measure the value of shares and reinvested earnings of Australian firms owned by French firms and the net indebtedness of these Australian firms to their French parents.
Topic:
Economics, Markets, Foreign Direct Investment, and Financial Crisis
Political Geography:
France and Australia