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Begin New Search Topic International Trade and Finance Publishing Institution Columbia Center on Sustainable Investment

21. Lessons from South Africa's BITs review

Author:
Xavier Carim
Publication Date:
11-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Proponents tend to argue that bilateral investment treaties (BITs) encourage investment and strengthen the rule of law particularly in jurisdictions where court systems are weak or biased against foreigners. This premise is contested. First, studies on BITs and FDI suggest the relationship is, at best, ambiguous and that BITs are neither necessary nor sufficient to attract FDI. Indeed, South Africa receives FDI from investors in countries with whom it has no BIT and often little or no FDI from others where a BIT was in place.
Topic:
Security, Economics, Emerging Markets, International Trade and Finance, and Treaties and Agreements
Political Geography:
Africa and South Africa

22. Go out and manufacture: Policy support for Chinese FDI in Africa

Author:
Nikia Clarke
Publication Date:
11-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Energy investments and infrastructure contracts remain prominent in China's Africa engagement. However, investment in manufacturing makes up a significant proportion of Chinese outward foreign direct investment (FDI). Its characteristics–large numbers of smaller transactions by privately owned small and medium-sized firms–make these flows difficult to assess or control. However, China and African governments have an interest in effectively channeling this type of FDI.
Topic:
Development, Economics, Industrial Policy, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Africa and China

23. Inward FDI in the United States and its policy context

Author:
Lucyna Kornecki
Publication Date:
02-2013
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Inward foreign direct investment (IFDI) represents an integral part of the United States (U.S.) economy, with its stock growing from US$ 83 billion in 1980 to US$ 3.5 trillion in 2011. The United States, which had earlier been primarily a home for multinational enterprises (MNEs) rather than a host for affiliates of foreign MNEs, has become a preferred host country for FDI since the 1980s. Foreign MNEs have contributed robust flows of FDI into diverse industries of the U.S. economy, and total FDI inflows reached US$227 billion in 2011, equivalent to 15% of global inflows, the single largest share of any economy. Inflows of FDI, with a peak of US$ 314 billion in 2000 and another of US$ 306 billion in 2008, have been an important factor contributing to sustained economic growth in the United States. The recent financial and economic crises negatively impacted FDI flows to the United States and opened a period of major uncertainty. The effectiveness of government policy responses at both the national and international levels in addressing the financial crisis and its economic consequences will play a crucial role for creating favorable conditions for a rebound in FDI inflows.
Topic:
Economics, Human Rights, International Trade and Finance, Foreign Direct Investment, and Governance
Political Geography:
United States and North America

24. EU investment agreements and the search for a new balance: A paradigm shift from laissez-faireliberalism toward embedded liberalism?

Author:
Catharine Titi
Publication Date:
01-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In July 2012, in an internal document, the European Commission's Directorate-General for Trade suggested that future EU investment agreement s (EUIAs) should incorporate regulatory flexibility in the same way in which EU free trade agreements (FTAs) safeguard parties' policy space. Since it is expected that a number of treaties on the EU's negotiating agenda will be concluded in the near future, and given the policy shift that has already taken place in Canada and the US, it is time to start thinking about a new balance in a move away from investment treaties' traditional laissez-faire liberalism toward WTO law's embedded liberalism, a model whereby liberalization is embedded within a wider framework that enables public regulation in the interest of domestic stability.
Topic:
Economics, Globalization, International Trade and Finance, World Trade Organization, and Foreign Direct Investment
Political Geography:
Europe and Canada

25. Inward FDI in Ireland and its policy context, 2012

Author:
Louis Brennan and Rakhi Verma
Publication Date:
03-2013
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Despite the global financial and economic crises and a sharp downturn in the domestic economy between 2008 and 2009, Ireland managed to attract large inflows of foreign direct investment (FDI) in 2010. Inward FDI (IFDI) flows in 2010 were at a similar level to those in 2009, the second highest in Ireland's FDI history. However in 2011, there was a decline in such flows. While Ireland's economy has been greatly affected by the global crisis, Irish government initiatives have further fostered the country's attractiveness as an investment location for the world's firms. All indications are that Ireland's IFDI performance will continue to surpass that of most countries into the near future.
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Europe and Ireland

26. Inward FDI in Germany and its policy context, 2012

Author:
Thomas Jost
Publication Date:
04-2013
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
In 2011 and the first half of 2012, inward FDI (IFDI) flows to Germany continued to be relatively strong. Germany attracte market-seeking MNEs, as its economy showed remarkable economic growth despite the ongoing problems in many other countries of the Eurozone. In the second half of 2012, IFDI flows turned sharply negative, declining for the year as a whole to only US$ 7 billion, compared with US$ 49 billion in 2011. This decline reflects the difficult financial situation of many companies, including banks in the Eurozone, and could also dampen inflows in 2013. In the longer-term, Germany could profit again from rising FDI as its economy has successfully implemented reforms over the past decade, and the German Government has continued to keep its investment policy regime open.
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
United States, Europe, and Germany

27. Toward a multilateral framework for investment

Author:
Nicolle Graugnard
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Business needs a stable and predictable investment environment, especially in times of economic uncertainty, to continue to generate employment and create wealth. Although foreign direct investment (FDI) flows rose for two years after plummeting in the wake of the global financial crisis, they fell again by 18% to US$ 1.4 trillion in 2012. According to UNCTAD, the major factors contributing to this sharp decline were economic fragility and policy uncertainty in several economies. Moreover, investment regulations classified as “restrictive” rose to 25% in 2012, compared to just 6% in 2000; “liberalizing” regulations were 75 % of the total in 2012, compared to 94% in 2000. The result of these regulations is, therefore, not surprising: businesses are holding back on new investments, with multinational enterprises reporting record cash-holdings of between US$ 4 to 5 trillion.
Topic:
Development, Economics, International Cooperation, International Trade and Finance, Foreign Direct Investment, and Governance

28. The futile debate over a multilateral framework for investment

Author:
Axel Berger
Publication Date:
08-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
One of the recurrent debates on international investment rule-making relates to the question whether it is possible to establish a multilateral framework for investment (MFI). Proponents argue that growing foreign direct investment (FDI) from emerging countries, especially China, contributes to a new consensus on global investment rules.
Topic:
Economics, Globalization, International Trade and Finance, Regional Cooperation, and Foreign Direct Investment
Political Geography:
China

29. The need for an international investment consensus-building process

Author:
Karl P. Sauvant and Federico Ortino.
Publication Date:
08-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Discussions on a multilateral investment framework have recently seen a revival, as the International Chamber of Commerce, the World Economic Forum and various authors have called for negotiations on this subject. A growing number of countries have been reviewing and adapting their international investment policies. This reflects dissatisfaction with the current international investment law regime, and a desire to improve it.
Topic:
Economics, International Law, International Trade and Finance, and Foreign Direct Investment

30. Cost allocation in investment arbitration: Back toward diversification

Author:
Baiju S. Vasani and Anastasiya Ugale
Publication Date:
07-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In 2006, the Thunderbird tribunal, operating under the UNCITRAL Arbitration Rules, called for the harmonization of cost-allocation approaches in commercial and investment arbitration. Subsequent tribunals appear to be heeding Thunderbird's call paving a trend in favor of the so-called “costs follow the event” (CFtE) approach and its variations. Generally, this approach prescribes the shifting of arbitral costs and reasonable legal fees to the unsuccessful party (or based on parties' relative success) and has historically been prevalent in commercial arbitration. By contrast, the more traditional approach in investment arbitration has been to share the costs of arbitration equally, save for special circumstances, with each party covering its own legal fees (traditional approach). In the wake of what appears to be an emerging trend in favor of a default CFtE custom, it is time to revisit the idea of whet her a single harmonized approach to cost allocation is really appropriate. We suggest that it most likely is not.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, and Foreign Direct Investment

31. Toward a multilateral framework for investment

Author:
Nicolle Graugnard
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Business needs a stable and predictable investment environment, especially in times of economic uncertainty, to continue to generate employment and create wealth. Although foreign direct investment (FDI) flows rose for two years after plummeting in the wake of the global financial crisis, they fell again by 18% to US$ 1.4 trillion in 2012. According to UNCTAD, the major factors contributing to this sharp decline were economic fragility and policy uncertainty in several economies. Moreover, investment regulations classified as “restrictive” rose to 25% in 2012, compared to just 6% in 2000; “liberalizing” regulations were 75% of the total in 2012, compared to 94% in 2000. The result of these regulations is, therefore, not surprising: businesses are holding back on new investments, with multinational enterprises reporting record cash-holdings of between US$ 4 to 5 trillion.
Topic:
Development, Economics, Industrial Policy, International Trade and Finance, and Natural Resources

32. Are trade-law inspired investment rules desirable?

Author:
Marino Baldi
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Traditional bilateral investment treaties (BITs) focus on investment protection, i.e., regulate post-establishment aspects of foreign investment. In recent times, investment agreements have increasingly been supplemented with liberalization rules and also clauses on, e.g., key personnel, labor rights and sustainable development. Such integrated investment accords have notably become part of preferential trade agreements (PTAs). This trend started with NAFTA, continued with the negotiations on a Multilateral Agreement on Investment (MAI), and has in the course of the past ten years increasingly characterized PTAs throughout the world. The rapid proliferation of PTAs has, in the investment field, unfortunately led to lower quality provisions. Many of these treaties contain such wide-ranging exceptions and vaguely formulated safeguard clauses that their regulatory value as regards the protection of foreign investments in their post-establishment phase is called into question.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment

33. Nation states and nationality of MNEs

Author:
Seev Hirsch
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The purpose of this Perspective is to explore the relationship between multinational enterprises (MNEs) and their home countries. I use the term “nationality” when discussing a home country, to stress the contrast with “multinationality” which refers to business enterprises. The question I seek to address is whether, ceteris paribus, nation states have an economic interest in becoming home countries to MNEs. This is not a trivial question, bearing in mind that in many countries -- especially those with emerging markets -- outward foreign direct investment (FDI) has been frowned upon long after incoming FDI was generally welcome by local governments and academic scholars.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, Political Economy, and Foreign Direct Investment

34. Towards the successful implementation of the updated OECD Guidelines for Multinational Enterprises

Author:
Tadahiro Asami
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The Business and Industry Advisory Committee to the OECD (BIAC) has accepted the updated OECD Guidelines for Multinational Enterprises (Guidelines), adopted on May 25, 2011 after a series of negotiations and consultations among members of the Organisation for Economic Cooperation and Development (OECD), adhering governments, BIAC, the Trade Union Advisory Committee to the OECD, and OECD Watch, an international network of civil society organizations. The Guidelines are the most comprehensive government-endorsed code of responsible business conduct. The Update upheld the voluntary and non-legally binding character of the Guidelines, and while the new text introduces important new elements, the Update is very carefully formulated and its changes are accompanied by extensive conditionalities.
Topic:
Development, Economics, International Cooperation, International Trade and Finance, Markets, and Foreign Direct Investment

35. FDI stocks are a biased measure of MNE affiliate activity: A response

Author:
Mira Wilkins
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In a recent Perspective, Beugelsdijk, Hennart, Slangen, and Smeets warned readers about biases in the measure of FDI stock. They are to be congratulated for pushing readers to be careful in the use of data.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, and Foreign Direct Investment

36. Is China's outward investment in oil a global security concern?

Author:
Ilan Alon and Aleh Cherp
Publication Date:
10-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The motivations prompting China's dramatic increase in outward foreign direct investment (OFDI) are not always clear, especially regarding OFDI by state-owned enterprises (SOEs) in energy and natural resources. First, both commercial and governmental interests are intertwined, although not necessarily in lock-step. Chinese SOEs listed in the West may worry about the reputational risks to their global corporate citizenship, while government stakeholders may instead focus on diplomatic international relations. Second, subsidies for oil investments may be viewed as serving Chinese national interests and threatening the national security of the host countries. Whether China's OFDI will benefit or harm global energy security, economic development and diplomatic relations is still hotly contested.
Topic:
Economics, Emerging Markets, Energy Policy, International Trade and Finance, Oil, and Foreign Direct Investment
Political Geography:
China

37. State-controlled entities as "investors" under international investment agreements

Author:
Jo En Low
Publication Date:
10-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
A review of the definition of “investor” and investor-state dispute resolution clauses in 851 international investment agreements (IIAs) reveals that, except in two, state controlled entities (SCEs) (sovereign wealth funds and state-owned enterprises (SOEs)) have equivalent standing to their purely private counterparts as investors under such IIAs.
Topic:
Economics, Emerging Markets, International Trade and Finance, Markets, and Foreign Direct Investment

38. Absent from the discussion: The other half of investment promotion

Author:
Lise Johnson
Publication Date:
09-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
As UNCTAD highlighted over a decade ago and again recently in its Investment Policy Framework for Sustainable Development, home-country measures (HCMs), like host-country commitments regarding the protection of foreign investors, are tools of promoting foreign investment. Nevertheless, the vast bulk of investment treaties, which state the promotion of foreign investment as their objective, overlook the potential role of HCMs and focus rather singularly on setting out the obligations of host countries regarding the treatment of foreign investors. Even recent agreements and model investment treaties that should represent “next generation” practices incorporating accumulated learning about the impacts and effectiveness of these treaties remain relatively devoid of any obligation for governments to facilitate or promote the quantity and quality of outward investment that many countries want and need for sustainable development.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, Markets, Foreign Aid, and Foreign Direct Investment

39. A new economic nationalism? Lessons from the PotashCorp decision in Canada

Author:
Sandy Walker
Publication Date:
08-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In its World Investment Report 2011, UNCTAD reported that liberalizing investment policy measures taken globally in 2010 outnumbered restrictive measures. Without the benefit of statistics, investors might have drawn the opposite conclusion, witnessing what appears to be a rising tide of national resistance to foreign takeovers: the Australian Foreign Investment Review Board's rejection of a takeover of the Australian Securities Exchange by the Singapore Exchange, Italian concern over a French company's takeover of dairy giant Parmalat and the US Government's requirement that Chinese company Huawei divest certain assets it had acquired from 3Leaf.
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
United States, China, Canada, Australia, and Singapore

40. A good business reason to support mandatory transparency in extractive industries

Author:
Julien Topal and Perrine Toledano
Publication Date:
08-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Transparency demands in extractive industries are tied to the complex paradoxical correlation between significant resource endowment and poverty in many resource dependent countries. Citizens of these countries and international investors alike only have limited means to scrutinize money-flows between governments and companies, disrupting accountability mechanisms.
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment