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1. Turkey’s Trade and Foreign Direct Investment in Ethiopia: An Insight into Challenges from 2012-2023

Author:
Betselot Adisu Ayal, Nani Debele Dubale, and Esayas Bamlack Bishaw
Publication Date:
12-2024
Content Type:
Journal Article
Journal:
Turkish Journal of Middle Eastern Studies
Institution:
Sakarya University (SAU)
Abstract:
The first decade of the 21st century marks a new phase in relations between Ethiopia and Turkey. During this period, relations between the two countries transformed into an unprecedented stage. The aim of this study is to examine the challenges of Ethio-Turkish economic relations from 2012 to 2023, with particular reference to trade and FDI. To attain its objectives, the study employed a qualitative research approach. Essentially, primary data were collected through key informant interviews, observation, and document reviews. Despite the growth in trade and foreign direct investment between the two countries, various challenges hinder the smooth operation of these economic ties. The main results of this study show that issues like changing exchange rates, lacking access to the Generalised System of Preferences (GSP), corruption, inefficient government, high tariffs, infrastructure issues, companies that can't pay their debts, customs procedures, fluctuating exchange rates, and a lack of data were major problems for trade and investment between Ethiopia and Turkey. The findings of the study suggest that there are certain problems that need policy measures for further industrial development through attracting foreign direct investment.
Topic:
Bilateral Relations, Foreign Direct Investment, and Trade
Political Geography:
Africa, Turkey, and Ethiopia

2. Contribution of Finance and Transport Indicators on Carbon Emissions: Evidence from Eurasian Countries

Author:
Kenan Ilarslan and Tuğrul Bayat
Publication Date:
01-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
Carbon emission is one of the most significant causes of environmental degradation, global warming, and extraordinary meteorological events. It has reached a level that threatens the future of countries and human beings. To combat carbon emission, it is necessary to know the causes for developing policies. Environmental quality is a fundamental aspect of sustainable development in economies worldwide. In this context, Eurasian geography has always been an important region in the history of the world with its location, underground, and surface resources. Today, the region makes its strategic importance even more evident. The communist USSR ruled Eurasian countries, which served as a buffer between the Western world and China for many years. These countries, which gained their independence in the 1990s, have not yet fully captured the values of the modern world, such as democracy and a free market economy. This study focuses on Eurasian countries. This study aimed to determine the factors affecting carbon emissions. Foreign direct investment and transportation contribute significantly to carbon emission, which reduces environmental quality. Therefore, in this study, we investigated whether rail and road passenger transport and foreign direct investment affect carbon emission in Eurasian countries. The concurrent panel quantile regression method was used to estimate this relationship between 1992 and 2020. The results revealed that rail and road passenger transport and foreign direct investment increase emissions. Additionally, no clear result could be obtained regarding the effect of the GDP per capita variable. To support these findings, analyses were performed using the robust quantile regression method, and strong empirical evidence was obtained, particularly for the impacts of foreign direct investment and rail passenger transport on emissions.
Topic:
Economics, Foreign Direct Investment, Transportation, Carbon Emissions, and Quantile Regression
Political Geography:
Eurasia

3. Foreign Direct Investment, Brand Value, and Economic Performance: A Multinational Analysis

Author:
Tuba Yıldız, Ünal Arslan, Zeynep Ökten, Yıldız Sağlam Çelıköz, and Hale Kırmızıoğlu
Publication Date:
06-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
The visibility and dependability of multinational corporations’ products increase with the fact that they introduce their goods to markets in other nations through foreign direct investments. The method for presenting products to international markets through foreign direct investments reveals the product’s reputation and therefore the brand’s development value. This study examines the relationship between foreign direct investments and brand value in Australia, Canada, China, France, India, Japan, Spain, the USA, and the UK for the period 2007-2023. The majority of studies in the literature attempt to explain the impact of brand value on foreign direct investments. However, very few studies explain the impac foreign direct investments on brand value and 1st generation unit root tests were generally used. Unlike existing studies, In this study, the second-generation unit root test, Durbin-Hausman cointegration, and Common Correlated Effects Mean Group estimation methods were used. As a result, it is anticipated that this study will contribute to the literature in this regard. The findings show that increases in foreign direct investments boost brand value.
Topic:
Economics, Foreign Direct Investment, Multinational Corporations, Data, and Branding
Political Geography:
Japan, China, United Kingdom, Canada, India, France, Spain, Australia, Global Focus, and United States of America

4. The Future of the Belt and Road in Europe: How China’s Connectivity Project is Being Reconfigured across the Old Continent – and What It Means for the Euro-Atlantic Alliance

Author:
Nicola Casarini
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
China’s Belt and Road Initiative (BRI) has entered the twilight zone in the old continent, following a deterioration of bilateral relations between the EU member states and China over the last years. Italy’s official exit from the BRI at the end of 2023 was a further blow to Chinese President Xi Jinping’s signature foreign policy. Yet, the BRI in Europe is being reconfigured rather than being terminated. In Western Europe, the BRI is moving away from physical infrastructure projects and investment in industrial assets – the latter being increasingly protected from Chinese takeovers by both national and EU legislation – to financial and monetary connectivity. This shift is welcomed by various European actors, including some policymakers at the national level, eurozone institutions and major banks. Concurrently, most of Eastern European countries continue to promote BRI projects and seek to attract Chinese investments, suggesting that there is a two-speed Europe when it comes to China, both in terms of geography and sectors.
Topic:
Infrastructure, Foreign Direct Investment, European Union, Belt and Road Initiative (BRI), and Currency
Political Geography:
China, Europe, Asia, and Italy

5. Productivity spillovers from FDI: A firm-level cross-country analysis

Author:
JaeBin Ahn, Shekhar Aiyar, and Andrea F. Presbitero
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper provides cross-country firm-level evidence on productivity spillovers from foreign direct investment (FDI), separately for greenfield FDI and cross-border mergers and acquisitions (M&As). The granularity of bilateral sector-level FDI datasets allows for addressing possible endogeneity issues by applying a two-step approach whereby an exogenous FDI measure is constructed from a gravity-type regression of bilateral FDI flows. When looking at the effects of greenfield investments on firm labour productivity we find: i) positive intra-industry spillover effects for firms located in advanced countries, and ii) positive backward spillover effects for firms located in emerging and developing countries. These spillovers are driven entirely by FDI from advanced countries. The results from cross-border M&As are noisier, with weakly suggestive evidence for positive intra-industry spillovers in advanced countries but negative backward spillovers in emerging markets and developing countries.
Topic:
Foreign Direct Investment, Business, and Productivity
Political Geography:
Global Focus

6. Wooing foreign investors: Greenland should prepare for the next dispute

Author:
Rafael Cox Alomar and Ulrik Pram Gad
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Foreign direct investment (FDI) in energy and mining projects is critical for many resource-rich countries that wish to use their resources for economic development. However, from an investor perspective, projects are vulnerable to state intervention. Due to the intense global competition for FDI, countries therefore go to great lengths in assuring foreign investors that disputes will be resolved fairly. The current dispute over the Kuannersuit mining project demonstrates the legal and policy challenges facing Greenland as it aspires to economic and constitutional independence.
Topic:
Foreign Direct Investment, Mining, and Energy
Political Geography:
Greenland

7. Where are the Growth Potentials in CESEE? An Illustration of Sectors and Products Using the Product Space

Author:
Francesca Guadagno, Doris Hanzl-Weiss, and Robert Stehrer
Publication Date:
07-2024
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper investigates the sectoral and export structures as well as the product spaces of 11 economies in Central, East and Southeast Europe (CESEE). We first employ an analysis based on revealed comparative advantages (RCAs) to identify promising sectors for future growth and then combine this analysis with a product space approach to detect related and complex products that could help these economies diversify and upgrade. The RCA analysis shows that the CESEE countries still hold a comparative advantage in manufacturing, although a slightly negative trend emerged between 2013 and 2020. Meanwhile, some services – particularly computer programming, consultancy and information service activities – have emerged as the most successful sectors to date. The product space analysis indicates that for the majority of the CESEE economies, it is possible to identify relatively complex products that could be easily targeted to spur upgrading. We also find that while we run the analysis separately for each of the 11 CESEE countries, the identified opportunities are often the same. While this is intuitively explained by the similar specialisations of these 11 countries, from a policy perspective this finding implies that each country has to deploy a battery of indicators to identify profitable and realistic niches within these broadly defined product categories.
Topic:
International Trade and Finance, Foreign Direct Investment, European Union, and Competition
Political Geography:
Europe

8. Can Multinationals Withstand Growing Trade Barriers?

Author:
Mahdi Ghodsi, Michael Landesmann, and Nina Vujanović
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Multinational enterprises (MNEs) are increasingly dealing with challenges shaped by the new geopolitical and trade environments. Besides traditional tariffs, exporting firms need to comply with regulatory non-tariff measures (NTMs) in the form of technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures. Although trade costs associated with these policy measures affect all firms, implications could be multifaceted for multinationals that base their international activities on exporting and importing and are important for the formation of global supply chains. Applying Poisson pseudo maximum likelihood to the unique Orbis dataset of firms on multinational subsidiaries, we show that NTMs pose a greater challenge to MNEs’ subsidiaries’ activity and performance than tariffs do. High-tech manufacturing subsidiaries of foreign MNEs are particularly vulnerable to these NTMs, as they suffer higher regulatory losses. However, multinational affiliates that have higher productivity, those with full foreign ownership representation, those that are embedded within a larger international network of subsidiaries, and those that are located in trading partners with deep preferential trade agreements can turn these trade challenges to their advantage. Our results have important implications for policy makers regulating trade in goods.
Topic:
International Trade and Finance, Foreign Direct Investment, Multinational Corporations, Tariffs, and Supply Chains
Political Geography:
Global Focus

9. Mild Deglobalization: Foreign Investment Screening and Cross-Border Investment

Author:
Vera Z. Eichenauer and Feicheng Wang
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Openness to foreign investments is associated with risks. To mitigate these risks, many high-income countries have strengthened the control of foreign investments over the last decade in an increasing number of sectors considered critical. Investment screening distorts the market for cross-border investments in controlled sectors, which might lead to unintended economic effects. This is the first cross-country panel study to examine the economic effects of investment screening mechanisms. We combine deal-level data on cross-border mergers and acquisitions (M&A) for the period 2007–2022 with information on sectoral investment screening. Using a staggered triple difference design, we estimate a reduction of 11.7 to 16.0 percent in the number of M&A in a newly screened sector. The effects are driven by minority acquisitions and deals involving a foreign government or state-owned enterprises or US firms as investors. There is no reduction in the number of deals within the EU/EFTA, most of which are not subject to screening. The findings call policymakers’ attention to weighing the benefits of national security and the economic costs of introducing investment screening.
Topic:
Globalization, International Trade and Finance, National Security, Foreign Direct Investment, Investment, Geoeconomics, Global Capital Allocation, and Deglobalization
Political Geography:
China, Europe, and United States of America

10. What role for Chinese FDI in Africa? New survey evidence from Ethiopia and Ghana

Author:
Charles Ackah, Alemayehu Geda, Holger Görg, and Federico Merchan
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Foreign investments bring in not only new employment but also novel technology, managerial skill and know-how, that may also dissipate into the local economy. It is not clear whether this effect differs by the nationality of source countries, in particular between Chinese and non-Chinese firms. Based on a firm level survey on Ethiopia and Ghana, we found that all types of firms are engaged in limited R&D and innovation activity and their transfer to host countris in both countries. There is little difference between Chinese and non-Chinese foreign firms in such technology and managerial skill transfer once controlling for firm size and industry characteristics in the majority of metrices (R&D activities, horizontal & vertical spillover, directly adopting techniques). However, we found for Ghana that Chinese firms have more suppliers but are less likely to transfer technology to them. Chinese firms are more likely to transfer managerial skills than non-Chinese firms in Ghana though not in Ethiopia. Also, there is little evidence that foreign firms transfer technology via horizontal or backward spillovers in either countries. Finally, Chinese firms are much more likely to receive host country policy support than other foreign firms in Ghana but not in Ethiopia.
Topic:
Science and Technology, Foreign Direct Investment, Economy, and Technological Transfer
Political Geography:
Africa, China, Ethiopia, and Ghana