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1. Reconciling IMF rules and international investment agreements: An innovative derogation for capital controls

Author:
Elizabeth L. Broomfield
Publication Date:
09-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
There is currently no universal framework governing capital controls. As a result, a conflict has arisen due to the different approaches taken by various international organizations and many international investment agreements (IIAs). In particular, the International Monetary Fund (IMF) -- established to manage the international financial system -- preserves national autonomy over capital controls when such measures are deemed necessary; in contrast, IIAs, and especially bilateral investment treaties (BITs) -- crafted primarily to protect investors -- typically do not allow for the imposition of restrictions on capital outflows associated with foreign investments for balance-of-payments reasons.
Topic:
Development, Economics, International Monetary Fund, Foreign Aid, Foreign Direct Investment, and Financial Crisis

2. Beyond treasuries: A foreign direct investment program for U.S. infrastructure

Author:
Geraldine McAllister and Joel H. Moser
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In his jobs address to a joint session of Congress last week, President Obama returned to a familiar theme: a call for nontraditional infrastructure investment as a generator of economic growth and, ultimately, jobs. The President's frequent references to “private investment” and “fully paid” infrastructure are encouraging, yet there is no assurance that domestic private capital investment alone is sufficient to reverse the degradation of the nation's infrastructure. As host to the largest flows of inward foreign direct investment (FDI), it is time that the United States employs this critical source of capital in tackling the nation's infrastructure deficit.
Topic:
Economics, Labor Issues, Infrastructure, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States

3. Greek FDI in the Balkans: How is it affected by the crisis in Greece?

Author:
Persephone Economou and Margo Thomas
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The current Greek crisis raises the question of its impact on foreign direct investment (FDI) by Greece on its neighbors in the Balkans. Greek multinational enterprises (MNEs) first began to establish a presence there in the 1990s, following the breakup of the former Yugoslavia. This trend accelerated during the past decade. As of 2009, Greece's outward FDI stock in the Balkans stood at US$ 10.5 billion or 26.5% of Greece's outward FDI stock worldwide.
Topic:
Foreign Policy, Global Recession, Foreign Direct Investment, and Financial Crisis
Political Geography:
Europe, Greece, Yugoslavia, and Balkans

4. Inward FDI in Finland and its policy context

Author:
Dan Steinbock
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
From independence to the collapse of the Soviet Union, inward foreign direct investment (IFDI) in Finland was either marginal (1917-1939) or insignificant (1945-early 1990s). Throughout this period, the success of Finland's core production clusters in forestry, metal engineering, chemicals, and plastics was based on exports, not IFDI (or outward FDI). However, with the end of the Cold War and the globalization of Finnish industries (especially the mobile communications cluster) in a period of strong export-led economic growth, IFDI in Finland took off rapidly from the mid-1990s. This period of growth came to an end with the global crisis of 2008-2009. In 2009, the Finnish economy shrank roughly by 8%, the sharpest plunge since the country's civil war in 1918. The recovery since 2010 has been relatively strong in comparison to that in most European Union (EU) economies, but Finland remains vulnerable to the Eurozone crisis. Today, IFDI is seen as an untapped resource, and the Finnish Government hopes to develop an IFDI promotion strategy in cooperation with the private sector and integrated with the national innovation system.
Topic:
Industrial Policy, Foreign Direct Investment, and Financial Crisis
Political Geography:
Europe and Finland

5. Outward FDI from Greece and its policy context

Author:
Aristidis P. Bitzenis and Vasileios A. Vlachos
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
With the fall of centrally planned economies in the Balkans, their liberalization and the opening of their borders to free trade and capital movements, Greece became more active in the generation of outward foreign direct investment (OFDI). Greece's OFDI stock increased from US$ 3 billion in 1990 to US$ 6 billion in 2000 and to US$ 38 billion in 2010. The Europeanization process of Turkey and the transition of the economies in the Balkans was accompanied by a gradual rise of FDI from Greece into those economies. More than half of Greece's OFDI stock – over US$ 20 billion in 2009 (67% of total) – is located in South-East Europe: in the Balkans, Cyprus and Turkey. While Greece's early OFDI flows were directed to the secondary sector to reduce costs, the bulk of later flows was directed to the services sector, as new markets were opened. This shift signifies the rise of major corporate players. The Greek Balkan policy, which commenced through the European Union, and the upgrading of the Athens Stock Exchange have positively affected Greece's position as a key regional investor. The expectations for sustaining this leading role, however, have been weakened recently since, due to the Greek sovereign debt crisis, Greek multinational enterprises (MNEs) disinvested US$ 1.6 billion from their FDI abroad in 2010.
Topic:
Debt, Economics, Foreign Direct Investment, and Financial Crisis
Political Geography:
Europe, Turkey, Greece, Balkans, and Cyprus

6. Inward FDI in Israel and its policy context

Author:
Yair Aharoni
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
In the first four decades of its existence, Israel was not successful in attracting inward foreign direct investment (IFDI) despite attempts to do so. In the past two decades, Israel have become a haven for multinational enterprises (MNEs) that have taken advantage of its unique assets – among them a skilled, educated workforce and cutting-edge research-and-development (R) capabilities – by establishing production lines or R centers and acquiring dozens of successful start ups. Israel's IFDI stock sharply increased from US$ 4.5 billion in 1990 to US$ 71.3 billion in 2009. It is expected that IFDI will further accelerate following Israel's accession to the OECD in May 2010 and as more firms from emerging market economies, including China and India, will come to appreciate its characteristics as an ideal locational choice. Israel also weathered the global economic crisis well, even though IFDI declined sharply. Israel actively encourages IFDI, mainly in high technology areas. In 2010, the Government also created special incentives to attract research centers of financial institutions.
Topic:
Economics, Markets, Foreign Direct Investment, and Financial Crisis
Political Geography:
China, Middle East, India, and Israel

7. Inward FDI in Malaysia and its policy context

Author:
Rajah Rasiah and Chandran Govindaraju
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Malaysia is still perceived as an important destination for foreign direct investment (FDI). Deregulation by the Malaysian government in 1986 with a new round of Pioneer status tax holidays, tax allowances for expansion projects, liberal rules for firms operating in free trade zones (FTZs), and tax exemptions are encouraging stronger FDI inflows (IFDI). IFDI flows reached a peak in 1988-1993 as export-oriented foreign multinational enterprises (MNEs) relocated manufacturing production operations to Malaysia to benefit from cheap labor, government incentives and liberal conditions for manufacturing FDI. After 1996, due to the Asian financial crisis in 1997-1998, IFDI flows into Malaysia decreased and subsequently recorded the lowest level in 2001 as a result of the world trade recession. Following steady growth in 2002-2007, IFDI in Malaysia fell dramatically in 2008 and 2009 due to the global economic crisis. However, a strong resumption in the first quarter of 2010 and government efforts, including continued liberalization of manufacturing and services, the Government Transformation Programme, promoting new key economic areas, and the active role of the Ministry of International Trade and Industry (MITI), contributed to an increase in inward FDI flows in the second quarter of 2010.
Topic:
Economics, Industrial Policy, International Trade and Finance, Foreign Direct Investment, and Financial Crisis
Political Geography:
Malaysia and Southeast Asia

8. Outward FDI from Poland and its policy context, 2011

Author:
Zbigniew Zimny
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
During the transition toward a market economy, for many years Poland's outward foreign direct investment (OFDI) was small and limited to trade-supporting activities in key export markets. It took off and started growing rapidly only five or six years ago, when the Polish private sector had matured enough to start generating home-grown multinational enterprises (MNEs). Some state-owned enterprises (SOEs) began also investing abroad, sometimes with the Government's encouragement. By contrast, in terms of private companies, Poland adopted a laissez-faire policy, leaving the emergence and expansion of private MNEs to market forces. In addition, Poland became a source and a transit country for large cross-border flows of funds among units of foreign and Polish firms, classified as FD I flows, artificially inflating OFDI. In the first year of the worldwide financial and economic crisis (2008) OFDI flows declined rather modestly to start growing again in 2009 and 2010 due to a relatively good performance of the Polish economy during the crisis.
Topic:
Economics, Industrial Policy, Markets, Foreign Direct Investment, and Financial Crisis
Political Geography:
Poland

9. Inward FDI in Portugal and its policy context, 2011

Author:
Vitor Corado Simões and Rui Manuel Cartaxo
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Portugal's performance in attracting inward foreign direct investment (IFDI) during the economic and financial crisis in 2009 was poor, below the low figures that it had already recorded in the previous couple of years, although Portugal did not record negative FDI inflows like competing countries such as Ireland (in 2008) and Hungary (in 2009). The country's difficulties in attracting IFDI are, however, structural. The “golden” years of the early 1990s, when Portugal emerged as an attractive and fashionable location, are past. The country's IFDI performance throughout the first decade of the 21st century was, in general, weak. In 2009, Spain, France and Brazil were the main sources of I FDI in Portugal. In spite of the Government's commitment to attracting IFDI, policy design and implementation have fallen short in the increasingly fierce competition for international investment.
Topic:
Economics and Financial Crisis
Political Geography:
Hungary, Portugal, and Ireland

10. 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

11. The world economic crisis as a changed circumstance

Author:
Hermann Ferré and Kabir Duggal
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In September 2008, the bankruptcy of Lehman Brothers sent financial markets in the United States into a spin. Credit markets froze as banks began to mistrust counterparties, not knowing the extent of toxic assets in loan portfolios that could lead to another major bank collapse. The crisis quickly spread around the world. Governments were urged to take drastic measures. Experts discussed the possible nationalization of portions of the U.S. banking industry and other sectors. Other countries also considered measures to save key industries.
Topic:
Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States

12. U.S. BITs and financial stability

Author:
Kevin P. Gallagher
Publication Date:
02-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Almost immediately after taking office, the Obama administration charged the U.S. Department of State's Advisory Committee on International Economic Policy with reviewing the U.S. Model bilateral investment treaty (BIT). The group established a sub-committee of business groups, labor and environmental organizations, and a handful of academic experts and tasked it to make official recommendations for reforming U.S. investment treaties. When completed, the Obama Administration hopes to proceed with official negotiations with China, India, Vietnam, and possibly Brazil.
Topic:
Economics, Globalization, and Financial Crisis
Political Geography:
United States, China, India, Brazil, and Vietnam

13. President Obama's International Tax Proposals Could Go Further

Author:
Reuven S. Avi-Yonah
Publication Date:
02-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The Obama Administration's 2011 budget proposals include revenues of $122 billion over ten years from “international tax reform.” This set of proposals is similar to but narrower than the ones advanced by the Administration in May 2009, which would have raised $210 billion.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
United States

14. Chile\'s outward FDI and its policy context

Author:
Carlos Razo and Álvaro Calderón
Publication Date:
03-2010
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Despite the recent financial and economic crisis, Chile\'s outward foreign direct investment (OFDI) in 2009 surpassed the record level of 2008, reflecting the strength of Chilean firms and the country\'s continuous commitment to integrate into the world economy. Two decades ago, Chile was an unlikely foreign direct investor. Today, even with no explicit policies to promote outward investment or the creation of national champions, Chile stands out as the third biggest investor of Latin America in absolute terms and as the first one in proportion to its GDP, even outperforming other emerging economies of similar size in other regions of the world.
Topic:
Foreign Direct Investment and Financial Crisis
Political Geography:
Latin America and Chile

15. Israel's leading multinationals continue to expand domestically and abroad despite the crisis

Publication Date:
03-2010
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
The third annual survey of Israeli multinational enterprises (MNEs) is being released today. It was conducted by a joint team composed of the Manufacturers Association of Israel, Tel Aviv University, Hebrew University, and the Vale-Columbia Center on Sustainable International Investment (VCC), a joint undertaking of the Columbia Law School and The Earth Institute at Columbia University in New York. The survey is part of a long-term, multi-country study of the rapid global expansion of multinational enterprises (MNEs) from emerging markets. The results released today cover the year 2008.
Topic:
Globalization, International Trade and Finance, and Financial Crisis
Political Geography:
Middle East, Israel, and Colombia

16. The response to the global crisis and investment protection: evidence

Author:
Kathryn Gordon and Joachim Pohl
Publication Date:
06-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In March 2009, Columbia FDI Perspectives carried an early analysis of investment policies in response to the financial crisis that began in early 2008. At that time, the authors, Anne van Aaken and Jürgen Kuntz, found “clear evidence of widespread discrimination directed at foreign actors” in the emergency response to the crisis.
Topic:
Economics, Global Recession, Monetary Policy, Foreign Direct Investment, and Financial Crisis
Political Geography:
Colombia

17. Foreign direct investment and U.S. national security: CFIUS under the Obama Administration

Author:
Mark E. Plotkin and David N. Fagan
Publication Date:
06-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
There was considerable public scrutiny of the Obama Administration's performance in its inaugural year, but comparatively little focus on one of the Administration's key processes governing the flow of investment into the United States — namely, the Committee on Foreign Investment in the United States (CFIUS). Yet, this is a frequent question we receive from foreign investors -- has the change in the administration affected CFIUS?
Topic:
Economics, International Trade and Finance, Monetary Policy, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States

18. The global economic crisis and FDI flows to emerging markets: for the first time ever, emerging markets are this year set to attract more than half of global FDI flows

Author:
Laza Kekic
Publication Date:
10-2009
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The global economic and financial crisis has had a major impact on foreign direct investment (FDI) flows. After declining in 2008 by 17% to US$1.73trn from US$2.09trn in 2007—the high point of a four- year long boom in cross-border mergers and acquisitions (M) and FDI—global FDI inflows are forecast to plunge by 44% to less than US$1trn in 2009. The big drop in 2009 is occurring despite the improvements in the global economy in recent months. A notable feature of trends in 2009 is that, for the first time ever, emerging markets are set to attract more FDI inflows than the developed world.
Topic:
Development, Economics, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States

19. Indian FDI falls in global economic crisis: Indian multinationals tread cautiously

Author:
Jaya Prakash Pradhan
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Just over a year ago, outward foreign direct investment (OFDI) from India seemed to be on a path of rapid and sustained growth. Its annual average growth of 98% during 2004–07 had been unprecedented , much ahead of OFDI growth from other emerging markets like China (74%), Malaysia (70%), Russia (53%), and the Republic of Korea (51%), although from a much lower base. Much of this recent growth had been fuelled by large-scale overseas acquisitions, however, and it faltered when the global financial crisis that started in late 2007 made financing acquisitions harder.
Topic:
Development, Economics, Foreign Direct Investment, and Financial Crisis
Political Geography:
Russia, China, Malaysia, India, and Korea

20. While global FDI falls, China's outward FDI doubles

Author:
Ken Davies
Publication Date:
05-2009
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In 2008 global FDI fell by around 20%, while outward FDI from China nearly doubled. This disparity is likely to continue in 2009 and 2010 as China invests even more overseas. What is driving this continuing surge in China's outward FDI?
Topic:
International Trade and Finance, Foreign Direct Investment, and Financial Crisis
Political Geography:
China and Asia

21. The global financial crisis: will state emergency measures trigger international investment disputes?

Author:
Anne Van Aaken and Jürgen Kurtz
Publication Date:
03-2009
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Several developed countries have introduced emergency measures to mitigate the effects of the Global Financial Crisis, including Australia, Germany, Ireland, the United Kingdom, and the United States. Although the measures taken are still undergoing changes by the executive branch and are thus a “moving target”, our survey reveals early evidence of differentiation between foreign and domestic actors in the emergency plans adopted by this sample grouping. It is this differentiation that may give rise to liability as breaching guarantees against discrimination of foreign investors under international investment law.
Topic:
Economics, International Trade and Finance, Markets, International Affairs, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States, United Kingdom, Germany, Australia, and Ireland

22. Indian FDI falls in global economic crisis: Indian multinationals tread cautiously

Author:
Jaya Prakash Pradhan
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Just over a year ago, outward foreign direct investment (OFDI) from India seemed to be on a path of rapid and sustained growth. Its annual average growth of 98% during 2004–07 had been unprecedented , much ahead of OFDI growth from other emerging markets like China (74%), Malaysia (70%), Russia (53%), and the Republic of Korea (51%), although from a much lower base. Much of this recent growth had been fuelled by large-scale overseas acquisitions, however, and it faltered when the global financial crisis that started in late 2007 made financing acquisitions harder.
Topic:
Economics, International Political Economy, International Trade and Finance, Markets, Foreign Direct Investment, and Financial Crisis
Political Geography:
Russia, China, South Asia, Malaysia, and Korea

23. The FDI recession has begun

Author:
Karl P. Sauvant
Publication Date:
11-2008
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
With $1.8 trillion (according to UNCTAD), world foreign direct investment (FDI) flows reached an all-time high last year. All major regions benefitted from increased flows. But that was then. What is, and will be, the impact of the financial crisis and the recession on FDI flows this year and next?
Topic:
Development, Economics, International Trade and Finance, Foreign Direct Investment, and Financial Crisis