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301. 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

302. Environmental concerns in international investment agreements: The "new era" has commenced, but harmonization remains far off

Author:
Kathryn Gordon and Joachim Pohl
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In Columbia FDI Perspective No.37, Daniel M. Firger foretells “a new era characterized by profound harmonization” between climate change policy and international investment law, based on what he sees as “unmistakable signs of convergence” in recent investment treaty making. A study just released by the OECD suggests that convergence of investment treaty making toward environmental policy began about a decade ago, but also that “profound harmonization” of investment and climate change policy is still some time away.
Topic:
Climate Change, Economics, and Foreign Direct Investment
Political Geography:
Colombia

303. From the FDI Triad to multiple FDI poles?

Author:
Karl P. Sauvant and Persephone Economou
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Twenty years ago, in the inaugural issue of the World Investment Report, the United Nations highlighted a shift in the global pattern of foreign direct investment (FDI) from bipolar, dominated by the United States and the European Community, to tri-polar (the FDI Triad), dominated by the European Community, the United States and Japan.
Topic:
Economics, International Trade and Finance, United Nations, and Foreign Direct Investment
Political Geography:
United States, Japan, and Europe

304. Integration in the Absence of Institutions: China-North Korea Cross-Border Exchange

Author:
Jennifer Lee, Stephan Haggard, and Marcus Noland
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Theory tells us that weak rule of law and institutions deter cross-border integration, deter investment relative to trade, and inhibit trade finance. Drawing on a survey of more than 300 Chinese enterprises that are doing or have done business in North Korea, the authors consider how informal institutions have addressed these problems in a setting in which rule of law and institutions are particularly weak. Given the apparent reliance on hedging strategies, the rapid growth in exchange witnessed in recent years may prove self-limiting, as the effectiveness of informal institutions erodes and the risk premium rises. Institutional improvement could have significant welfare implications, affecting the volume, composition, and financial terms of cross-border exchange.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Israel

305. Investment Treaty Arbitration and Developing Countries: A Re-Appraisal

Author:
Kevin P. Gallagher and Elen Shrestha
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
There is an ongoing debate about bilateral investment treaties (BITs) – and investor-state arbitration, in particular – between those who maintain that BITs encourage investment in developing countries by providing enforceable rights and protections for investors, and There is an ongoing debate about bilateral investment treaties (BITs) – and investor - state arbitration, in particular – between those who maintain that BITs encourage investment in developing countries by providing enforceable rights and protections for investors, and those who suspect that these new rights and protections have a chilling effect on regulation for public and environmental welfare and actually hinder development. For years, both ―camps‖ have drawn heavily upon anecdotal evidence and observations to support their view, as no systematic, comprehensive study of empirical data on investment arbitrations had been undertaken. To fill this void, legal scholar Susan Franck has evaluated the criticisms of investment arbitration based on empirical studies of published or known disputes (Franck 2009; Franck 2007) . These efforts produced helpful data and initiated a productive discussion of these issues . However, the results and conclusions that can be drawn from Franck's work are more limited and warrant more nuance than Franck and others so far have taken into account. Franck's work is now widely used to support the notion that developing countries do not disproportionately ―lose‖ under the investment arbitration regime. Such a conclusion does not appear to be supported by Franck's data. This article analyzes Franck's work to show where differing conclusions emerge. We show that: 1) there is a lack of adequate sample composition and size to conduct rigorous empirical work from which an analyst could draw such bold lesson s; 2) discounting the fact that developing countries are subject to a disproportionate number of claims is not to be over looked, especially when looking at claims by the United States; and 3) relative to government budgets and in per capita terms developing countries pay significantly more in damages than developed nations do.
Topic:
Development, Treaties and Agreements, Bilateral Relations, and Foreign Direct Investment

306. The 2012 Presidential Elections in Russia: What Future for the Medvedev-Putin Tandem?

Author:
Nona Mikhelidze
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The 2012 Russian presidential election and the future of the Medvedev-Putin tandem have started to dominate political debate inside and outside the country. Several developments in Russia's domestic politics have made predictions on the future president particularly arduous. These include Russia's so-called modernization initiative; Mikhail Prokhorov's debut on the Russian political scene, and the new presidential decree on the "Security Council Questions". Yet, analysing these developments suggests that whether Putin will return to the presidency or whether he will remain the de facto leader is unlikely to have major repercussions on Russian domestic policy. For Russia, the priority today is the need to maintain internal stability and formal democracy, necessary to attract foreign technologies and thus advance the modernization initiative as well as to guarantee elite continuity through an internal balance between the siloviki faction and the liberals. Both a renewed Medvedev-Putin tandem and a return of Putin to the presidency fulfil these goals. While much debated, the personality of the future Russian president is unlikely to represent a major game changer in Russia today.
Topic:
Democratization, Development, Politics, and Foreign Direct Investment
Political Geography:
Russia

307. Organising an investment in China: Prepare for opportunity

Publication Date:
11-2011
Content Type:
Working Paper
Abstract:
Foreign companies continue to be attracted by the opportunities offered by China's large and rapidly growing economy. China has a population of over 1.3bn, and the size of the economy is likely to grow to just under US$13trn a year at market exchange rates by 2015. Although GDP per head will still be relatively low by the end of the forecast period, at just under US$10,000 a year, this will represent a substantial improvement from just under US$4,500 in 2010. Significant regional disparities within China will persist. The provinces of the eastern seaboard enjoy standards of living well above the national average. However, there are also markets to be found in inland China, where many large cities are located. To some extent, the size of the population and the pace of economic growth belie the challenges of operating in China. Nationwide distribution networks will increasingly be put in place, but the Chinese market is likely still to be a fragmented one by 2015.
Topic:
Economics, Emerging Markets, Globalization, and Foreign Direct Investment
Political Geography:
China

308. Human resources in China Prepare for opportunity

Publication Date:
09-2011
Content Type:
Working Paper
Abstract:
Foreign companies continue to be attracted by the opportunities offered by China's large and rapidly growing economy. China has a population of over 1.3bn, and the size of the economy is likely to grow to just under US$13trn a year at market exchange rates by 2015. Although GDP per head will still be relatively low by the end of the forecast period, at just under US$10,000 a year, this will represent a substantial improvement from just under US$4,500 in 2010. Significant regional disparities within China will persist. The provinces of the eastern seaboard enjoy standards of living well above the national average. However, there are also markets to be found in inland China, where many large cities are located. To some extent, the size of the population and the pace of economic growth belie the challenges of operating in China. Nationwide distribution networks will increasingly be put in place, but the Chinese market is likely still to be a fragmented one by 2015.
Topic:
Demographics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
China

309. President of the Republic of Kosovo, Atifete Jahjaga

Publication Date:
09-2011
Content Type:
Video
Institution:
Columbia University World Leaders Forum
Abstract:
In the World Leaders Forum address titled, Kosovo\'s Road Ahead, President Atifete Jahjaga discusses the current state of the Republic of Kosovo and the plans for its future. Co-sponsored by The Harriman Institute.
Topic:
Conflict Resolution, Development, Economics, Ethnic Conflict, Foreign Aid, and Foreign Direct Investment
Political Geography:
Kosovo and Balkans

310. Regional Development Banks (ABCs of the IFIs Brief)

Author:
Jenny Ottenhoff
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The regional development banks (RDBs) are multilateral financial institutions that provide financial and technical assistance for development in low- and middle-income countries within their regions. Finance is allocated through low-interest loans and grants for a range of development sectors such as health and education, infrastructure, public administration, financial and private-sector development, agriculture, and environmental and natural resource management. The term RDB usually refers to four institutions:
Topic:
Development, Economics, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa, Europe, and Asia

311. International Finance Corporation (ABCs of the IFIs Brief)

Author:
Jenny Ottenhoff
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The International Finance Corporation (IFC) is a multilateral financial institution that provides financial and technical assistance to the private sector in middle- and low- income countries. Unlike other international financial institutions, the IFC operates on a commercial basis and invests exclusively in for-profit projects that promote poverty reduction and development. Increasingly, the IFC is investing in the world's poorest countries and fragile states that have few private investors. IFC investments support a range of activities including agribusiness, manufacturing, health and education, microfinance programs, and infrastructure development.
Topic:
Development, Markets, Poverty, Foreign Aid, and Foreign Direct Investment

312. Shaping global business conduct: The 2011 update of the OECD Guidelines for Multinational Enterprises

Author:
Manfred Schekulin
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
On May 25, 2011, US Secretary of State Hillary Clinton joined ministers from members of the Organisation of Economic Co-operation and Development (OECD) and developing economies to celebrate the Organisation\'s 50th anniversary and agree on an update of the OECD Guidelines for Multinational Enterprises, the fifth revision since their adoption in 1976. This marked the culmination of an intense one-year negotiating process involving a large number of stakeholders, international organizations and emerging economies.
Topic:
Development, Economics, International Cooperation, and Foreign Direct Investment
Political Geography:
United States

313. 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

314. Inward FDI in Egypt and its policy context

Author:
Ahmed Kamaly
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Egypt, starting from the second half of the first decade of the 21st century, has begun to realize its potential as an important recipient of foreign direct investment (FDI) among developing economies. Having received only US$ 500 million of inward FDI (IFDI), amounting to 0.5% of GDP in 2001, Egypt attracted US$ 9.4 billion (approximately 5.7% of GDP), in 2008. While investment in oil and gas accounted for a large share of IFDI (over half in 2006-2009), the remainder is fairly well diversified. Developed economies account for three-quarters of Egypt's IFDI, but the share of emerging markets has risen recently. Largely because of the global financial crisis, inflows dropped in 2009, by 30%. IFDI is likely to be adversely affected in 2011 following the political turbulence associated with the January 25 Revolution. However, this democratic transformation carries the seeds of genuine political stability based on effective institutions and the rule of law, which would encourage long-term domestic and foreign investment.
Topic:
Development, Economics, Markets, and Foreign Direct Investment
Political Geography:
Arabia, North Africa, and Egypt

315. Outward FDI from Colombia and its policy context

Author:
Ana-María Poveda Garcés
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Outward foreign direct investment (OFDI) from Colombia has increased considerably in the past decade, with its stock growing from US$ 3 billion in 2000 to US$ 23 billion in 2010. This growth reflects the internationalization of the Colombian economy following policy reforms and economic liberalization in the 1990s. The 2000s were characterized by enhanced national security and reforms to the investment framework that have attracted unprecedented levels of inward FDI and facilitated the growth of small and medium-sized enterprises (SMEs). A considerable rise in domestic mergers and acquisitions (M) in the past decade has contributed to the development of Colombian multinational enterprises (MNEs) and to increased OFDI from Colombia. In 2010, outflows showed a twenty-fold increase from their value in 2000, including an increase in OFDI to export markets, helped by greater government support for OFDI, for example by the conclusion of more international investment agreements. The rise of Colombian MNEs, or "translatinas" (i.e. Latin American MNEs whose OFDI is primarily within Latin America), reflects Colombia's nascent structural transformation into a knowledge-based economy. Together with Chile and Peru, Colombia has recently created the first regionallyintegrated stock exchange in the region, the Mercado Integrado Latinoamericano (MILA), which is likely to facilitate FDI flows.
Topic:
Development, Economics, Markets, and Foreign Direct Investment
Political Geography:
Colombia and Latin America

316. Outward FDI from Germany and its policy context: update 2011

Author:
Thomas Jost
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
In 2010, German companies strongly increased their investments in foreign affiliates, with outward foreign direct investment (OFDI) flows having reached their third highest value on record (US$ 105 billion). Flows were driven by rising exports and growing profits of the German corporate sector. In 2010, the German economy made a robust recovery from the worldwide economic and financial crisis and became a growth engine among European Union (EU) countries. A further increase of OFDI is expected in 2011, as German companies are seeking to strengthen their strategic position in their main markets, although the pre-crisis level of OFDI flows of US$ 171 billion in 2007 will be hard to achieve. The German Government has continued to support the internationalization process of the German corporate sector by expanding its network of bilateral investment treaties and providing financial support and information services.
Topic:
International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Europe, Germany, and Ethiopia

317. The new Dutch sandwich: The issue of treaty abuse

Author:
George Kahale, III
Publication Date:
10-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Years ago, international tax lawyers introduced us to the term “Dutch sandwich.” The concept was to sandwich a Dutch company between an investor from country A and its investment in country B. The combination of the extensive network of Dutch tax treaties and investor-friendly domestic Dutch tax law meant that country A's investor could reduce withholding tax on dividends out of country B and perhaps eliminate capital gains tax altogether by structuring its investment through a Dutch company.
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Europe

318. Aid Coordination and Alignment: Myth or reality? The case of the ECOWAS regional agriculture policy

Author:
Jean-Denis Crola and Saya Saulière
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Oxfam Publishing
Abstract:
Agriculture, along with livestock farming and fishing, is one of the fundamental components of West African economies. Together they constitute over 35% of the Gross National Product and contribute over 15% of export revenues. They provide income to more than 60% of the working population, over half of whom are women working in production, processing or trade.
Topic:
Agriculture, Development, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa

319. Dial "A" for Agriculture: A Review of Information and Communication Technologies for Agricultural Extension in Developing Countries

Author:
Jenny C. Aker
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Agriculture can serve as an important engine for economic growth in developing countries, yet yields in these countries have lagged far behind those in developed countries for decades. One potential mechanism for increasing yields is the use of improved agricultural technologies, such as fertilizers, seeds and cropping techniques. Public-sector programs have attempted to overcome information-related barriers to technological adoption by providing agricultural extension services. While such programs have been widely criticized for their limited scale, sustainability and impact, the rapid spread of mobile phone coverage in developing countries provides a unique opportunity to facilitate technological adoption via information and communication technology (ICT)-based extension programs. This article outlines the potential mechanisms through which ICT could facilitate agricultural adoption and the provision of extension services in developing countries. It then reviews existing programs using ICT for agriculture, categorized by the mechanism (voice, text, internet and mobile money transfers) and the type of services provided. Finally, we identify potential constraints to such programs in terms of design and implementation, and conclude with some recommendations for implementing field-based research on the impact of these programs on farmers' knowledge, technological adoption and welfare.
Topic:
Agriculture, Development, Poverty, Science and Technology, Foreign Aid, and Foreign Direct Investment

320. Fostering Growth and Development in Small States through Disruptive Change: A Case Study of the Caribbean

Author:
Avinash D. Persaud
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
The desks of civil servants in small states are stacked with yellowing consultancy reports from multilateral agencies on the need to generate sustainable jobs and growth, attract investment, bolster infrastructure and institutions, and improve the efficiency and reduce the expense of government. The real question is not what, but why? Why, in spite of everything we know, are many small states, especially those in the Caribbean, trapped in a zone of low growth, stagnation or relative decline? Policy makers face physical and financial constraints and implementation deficiencies, but the overriding constraint, even more so than in other countries, is political economy.
Topic:
Development, Economics, Globalization, and Foreign Direct Investment
Political Geography:
Caribbean

321. Rent(s) Asunder: Sectoral Rent Extraction Possibilities and Bribery by Multinational Corporations

Author:
Nathan Jensen, Edmund Malesky, and Dimitar Gueorgiev
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
We argue that openness to foreign investment can have differential effects on corruption, even within the same country and under the exact same domestic institutions over time. Our theoretical approach departs from standard political economy by attributing corruption motives to firms as well as officials. Rather than interpreting bribes solely as a coercive “tax” imposed on business activities, we allow for the possibility that firms may be complicit in using bribes to enter protected sectors. Thus, we expect variation in bribe propensity across sectors according to expected profitability which we proxy with investment restrictions. Specifically, we argue that foreign investment will not be associated with corruption in sectors with fewer restrictions and more competition, but will increase dramatically as firms seek to enter restricted and uncompetitive sectors that offer higher rents. We test this effect using a list experiment, a technique drawn from applied psychology, embedded in a nationally representative survey of 10,000 foreign and domestic businesses in Vietnam. Our findings show that the impact of domestic reforms and economic openness on corruption is conditional on polices that restrict competition by limiting entry into the sector.
Topic:
Development, Industrial Policy, International Trade and Finance, Political Economy, and Foreign Direct Investment
Political Geography:
Israel and Vietnam

322. Social Partnerships and Development: Implications for the Caribbean

Author:
Indianna D. Minto-Coy
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
The effects of the ongoing global financial crisis have intensified the existing economic issues facing the Commonwealth Caribbean, including declining investment, productivity levels and employment opportunities for its citizens. Although the current crisis presents challenges for governments in the region, it also offers an opportunity for these countries to implement innovative solutions to contend with the short-term effects of the financial crisis, while addressing long-standing problems. A solution that has been successful in Botswana, Ireland and Barbados, is the use of social partnerships. Undertaken while these countries were facing economic and social crises, social partnership as a specific governance model allowed them to achieve levels of development and stability that other states yearn to attain.
Topic:
Development, Economics, Labor Issues, Foreign Direct Investment, Financial Crisis, and Governance
Political Geography:
Caribbean

323. Constrained Autonomy and the Developmental State: From Successful Developmentalism to Catastrophic Failure

Author:
Jamee K. Moudud
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
The New School Graduate Program in International Affairs
Abstract:
As many authors have argued, the state has played a central role in capitalist development, both in developing and developed countries. The question is why have some states been more successful than others in promoting economic development? In this paper I propose a theoretical agenda to investigate the factors that have made some states more successful than others. I suggest that a complex set of historical, sociological, and political factors shape state formation and a country\'s international competitiveness; further international competitiveness itself shapes the ability to foster economic development. I argue that these factors determine the ways in which states and economies co - evolve. Additionally, since countries are embedded in a global system, an investigation of this co - evolution requires a very different theory of industrial organization and thus of international competition. Thus the state confronts a constrained autonomy in being able to obtain taxation revenue and foreign exchange so as to finance important developmental needs. Finally I conclude that the rationale for “bringing the state back in” has to not only critically examine the notion of “state failure” but also has to reject the notion of “market failure”.
Topic:
Development, Economics, Markets, and Foreign Direct Investment

324. Investment incentives and the global competition for capital

Author:
Kenneth P. Thomas
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Investment incentives (subsidies designed to affect the location of investment) are a pervasive feature of global competition for foreign direct investment (FDI). They are used by the vast majority of countries, at multiple levels of government, in a broad range of industries. They take a variety of forms, including tax holidays, grants and free land. Politicians, at least in the United States, may have good electoral incentives to use them.
Topic:
Development, Environment, Globalization, International Trade and Finance, Foreign Aid, and Foreign Direct Investment
Political Geography:
United States and Europe

325. Knowledge, FDI and catching-up strategies

Author:
Francisco . Sercovich
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
A recent Perspective by Terutomo Ozawa singles out protectionism and foreign direct investment (FDI) as alternative drivers for the take-off phase of catching-up industrialization. This dichotomy neglects the rich and nuanced variety of strategic options revealed by recent successful industrialization experiences.
Topic:
Development, Economics, International Trade and Finance, Science and Technology, and Foreign Direct Investment

326. FDI in retailing and inflation: The case of India

Author:
Nandita Dasgupta
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
India's food price inflation is a major driving factor behind the country's overall accelerating inflation over the past few years. Agricultural food prices in particular have risen recently: over the past year vegetables have become costlier by 18%, pulses by 14%, milk by 10%, and eggs, meat and fish by 12%. The rise in fruit prices was, however, relatively smaller (5%), and the same happened for cereals (3%). This price escalation is largely due to an inefficient supply chain in agriculture. Some of the supply side constraints have been identified: poor agricultural productivity, lack of corporate involvement in agriculture, ceilings on landholding size, existence of middlemen, hoarding, and, more importantly, insufficient cold storage facilities and transportation infrastructure. Around 50% of fresh produce in India rots and goes to waste between the farm gate and the market because of inadequate cold storage facilities and a poor distribution network. These factors unfavorably affect agricultural supply, create a supplydemand gap and help raise food prices.
Topic:
Security, Agriculture, Development, Economics, Food, and Foreign Direct Investment
Political Geography:
South Asia and India

327. 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

328. Responsible business conduct: Re-shaping global business

Author:
John Evans
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development (OECD) is the Organisation's flagship instrument for responsible business conduct. The Guidelines provide non-binding recommendations to multinational enterprises (MNEs), drawn up and implemented by governments. Updated in 2011, they consist of principles and standards in such areas as sustainable development, governance, disclosure, human rights, employment and industrial relations, the environment, anti-corruption, consumer interests, and taxation. The 42 adhering governments are required to promote the Guidelines and to contribute to the resolution of issues arising under the Guidelines, including by setting up a complaints mechanism -- “National Contact Points” (NCPs) -- to which trade unions and non-governmental organizations (NGOs) are able to submit specific instances concerning alleged breaches of the Guidelines.
Topic:
Globalization, International Organization, International Political Economy, Markets, Foreign Direct Investment, and Governance

329. 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

330. 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

331. Inward FDI in Italy and its policy context

Author:
Marco Mutinelli and Lucia Piscitello
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
The attractiveness of the Italian economy for inward foreign direct investment (IFDI) has been traditionally limited, despite the country's locational advantages such as a large domestic market and a skilled labor force. The recent global crisis worsened the country's IFDI position, with flows falling from US$ 40 billion in 2007 to -US$ 11 billion in 2008 before recovering to US$ 20 billion in 2009 but down again to US$ 9 billion in 2010. Although the country's IFDI stock had grown since 2000 at a rate similar to that of the European Union as a whole, in 2010 IFDI stock contracted vis-à-vis 2009, reflecting how Italy, compared to other key European countries and to its own potential, continues to underperform. The main obstacles to exploiting the country's potential for IFDI lie both in the largely insufficient actions undertaken to attract and promote IFDI, and especially in the lack of coordination with other relevant policy measures (e.g. infrastructure development) within a broader framework aimed at regional and national development.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Europe and Italy

332. Safeguarding Mitigation Efforts for Sustainability

Publication Date:
04-2011
Content Type:
Policy Brief
Institution:
Transparency International
Abstract:
Developing countries are increasingly hosting climate change mitigation projects. They also often provide the natural resources necessary for low-carbon technologies.
Topic:
Climate Change, Corruption, Development, Foreign Direct Investment, and Governance

333. Rent(s) Asunder: Sectoral Rent Extraction Possibilities and Bribery by Multinational Corporations

Author:
Nathan Jensen, Edmund Malesky, and Dimitar Gueorguiev
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
We argue that openness to foreign investment can have differential effects on corruption, even within the same country and under the exact same domestic institutions over time. Our theoretical approach departs from standard political economy by attributing corruption motives to firms as well as officials. Rather than interpreting bribes solely as a coercive “tax” imposed on business activities, we allow for the possibility that firms may be complicit in using bribes to enter protected sectors. Thus, we expect variation in bribe propensity across sectors according to expected profitability which we proxy with investment restrictions. Specifically, we argue that foreign investment will not be associated with corruption in sectors with fewer restrictions and more competition, but will increase dramatically as firms seek to enter restricted and uncompetitive sectors that offer higher rents. We test this effect using a list experiment, a technique drawn from applied psychology, embedded in a nationally representative survey of 10,000 foreign and domestic businesses in Vietnam. Our findings show that the impact of domestic reforms and economic openness on corruption is conditional on polices that restrict competition by limiting entry into the sector.
Topic:
Corruption, Economics, and Foreign Direct Investment

334. Delivering on US Climate Finance Commitments

Author:
Trevor Houser and Jason Selfe
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
At the United Nations climate change conference in Copenhagen in 2009 and Cancun in 2010, the United States joined other developed countries in pledging to mobilize $100 billion in public and private sector funding to help developing countries reduce greenhouse gas emissions and adapt to a warmer world. With a challenging US fiscal outlook and the failure of cap-and-trade legislation in the US Congress, America's ability to meet this pledge is increasingly in doubt. This paper identifies, quantifies, and assesses the politics of a range of potential US sources of climate finance. It finds that raising new public funds for climate finance will be extremely challenging in the current fiscal environment and that many of the politically attractive alternatives are not realistically available absent a domestic cap-and-trade program or other regime for pricing carbon. Washington's best hope is to use limited public funds to leverage private sector investment through bilateral credit agencies and multilateral development banks.
Topic:
Climate Change, Development, Economics, Energy Policy, Politics, and Foreign Direct Investment
Political Geography:
United States, America, Washington, and United Nations

335. Making Rio 2012 work: Setting the stage for global economic, social and ecological renewal

Author:
Alex Evans and David Steven
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Center on International Cooperation (CIC)
Abstract:
The Rio 2012 summit on sustainable development is now one year away. Over two decades since the 1992 'Earth Summit', sustainable development has not materialized: as global GDP has risen, so have greenhouse gas emissions, species loss and environmental degradation.
Topic:
Climate Change, Development, Economics, Environment, Foreign Aid, and Foreign Direct Investment
Political Geography:
Latin America

336. The times they are a-changin' -- again -- in the relationships between governments and multinational enterprises: From control, to liberalization to rebalancing

Author:
Karl P. Sauvant
Publication Date:
05-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Governments seek to attract foreign direct investment (FDI) undertaken by multinational enterprises (MNEs) because it contributes to the growth of their economies; they seek to maximize the benefits of this investment in the framework of their national economies. Firms undertake FDI because it improves their access to markets and resources and hence increases their international competitiveness; they seek to maximize the benefits of this investment in the framework of their global corporate networks. This difference in objectives and frameworks gives rise to tensions that play themselves out in the approach governments take in national FDI policies and bilateral investment treaties (BITs). During the late 1960s and the 1970s, the dominant approach was to control MNEs. During the 1990s, it was liberalization -- and the approach is again changing.
Topic:
Development, Economics, Government, Monetary Policy, and Foreign Direct Investment

337. FDI incentives pay — politically

Author:
Nathan M. Jensen and Edmund J. Malesky
Publication Date:
06-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Despite broad skepticism about the benefits of globalization, the majority of U.S. states have offered lucrative tax incentives to attract investment. The size of these incentives is generally considered too large to be welfare enhancing, and many economists are skeptical of the effectiveness of these policies. Yet despite the mounting evidence to the contrary, the incentives offered by U.S. states (and foreign countries) continue and have actually increased in their generosity over time.
Topic:
Economics, Political Economy, Politics, and Foreign Direct Investment
Political Geography:
United States

338. 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

339. 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

340. Thinking twice about a gold rush: Pacific Rim v El Salvador

Author:
Gus Van Harten
Publication Date:
05-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Whether it concerns oil drilling or gold mining, sometimes a government, facing new circumstances, must change its mind.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Latin America

341. How BRIC MNEs deal with international political risk

Author:
Premila Nazareth Satyanand
Publication Date:
05-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Hitherto, political risk has worried developed country multinational enterprises (MNEs) investing in developing country markets. But as more emerging market firms invest overseas, they too must grapple with this subject. World Investment and Political Risk 2009 looks at this issue for the first time and finds that Brazilian, Russian, Indian, and Chinese (BRIC) firms appear to worry more about political risk than global counterparts. Though these results are based on as mall sample of 90 of the largest BRIC investors, they are thought-provoking nonetheless.
Topic:
International Political Economy, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Russia, China, India, and Latin America

342. Inward FDI in Colombia and its policy context

Author:
Miguel Posada Betancourt
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Colombia used to be a synonym for violence and drugs, but not anymore. Today, the country has one of the best performing economies in Latin America, and violence levels have been dramatically reduced. The outgoing administration made improving investor confidence and the business environment one of the pillars of its policy. As a result of important reforms and aggressive campaigns to promote the country as an attractive location, inward foreign direct investment (IFDI) has risen to unprecedented levels. Due to these positive changes, Colombia has been designated a “top reformer” for the past four years in the World Bank's Doing Business reports, and the new Government has promised to maintain and reinforce efforts to attract foreign investment. Even though IFDI flows decreased in the past two years as a consequence of the economic and financial crisis, many foreign affiliates in Colombia achieved positive profits. A country that a decade ago was avoided is now in many investors' plans.
Topic:
Development, Economics, War on Drugs, and Foreign Direct Investment
Political Geography:
Colombia and Latin America

343. Inward FDI in Peru and its policy context

Author:
Benjamin Chavez and Jaime Dupuy
Publication Date:
08-2010
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Peru has shifted from being a small FDI player in the Latin America and Caribbean region in the 1990s to being the sixth largest FDI host country in 2008. With inflows of US$ 6.9 and US$ 4.8 billions in 2008 and 2009, respectively, Peru has managed to contain the impact of the financial crisis on inward FDI (IFDI). The main determinants of the improved FDI performance were: a stable economic and FDI policy since 1992;) vast natural resources; strong gross domestic product (GDP) and market growth; and an export-oriented economy, especially during the past decade. In recent years, Peru has become one of the fastest growing economies in Latin America and a diversified commercial hub for IFDI in the region.
Topic:
Economics, Monetary Policy, and Foreign Direct Investment
Political Geography:
Latin America, Caribbean, and Peru

344. Catalyzing Support for Small Growing Businesses in Developing Countries: Mapping the Policies of International Development Donors Investors

Author:
Estera Barbarasa
Publication Date:
06-2010
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
This report depicts the landscape of development organizations that fund and support small and medium enterprises (SMEs) in developing countries: multilateral development banks, bilateral government donor agencies, and development finance institutions (DFIs). The report is a new contribution to both the development community, as well as the Aspen Network of Development Entrepreneurs (ANDE). Advocacy and policy work is a strategic priority for ANDE, and the report's findings will enable the Network to understand the international development community and to be more strategic in its approach as it seeks to influence and shape the international development SME agenda.
Topic:
Development, International Trade and Finance, Third World, Foreign Aid, and Foreign Direct Investment

345. Inward FDI in Russia and its policy context

Author:
Alexey Kuznetsov
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
In the 2000s, Russia became a significant host for inward foreign direct investment (IFDI). But its investment climate problems, especially corruption, do not allow Russia to exploit its locational advantages to the full. Russia attracts mainly European investors in a rather narrow range of industries (although the share of mining is decreasing) and regions (mainly in Moscow, St. Petersburg and oil-rich Sakhalin). However, even during the crisis, a new industrial cluster has developed near Kaluga and some large mergers and acquisitions (M) and greenfield projects have been realized outside the Central and North-West federal districts. Russia is trying to diversify the structure and geography of IFDI using incentives (e.g. in special economic zones).
Topic:
Corruption, Economics, and Foreign Direct Investment
Political Geography:
Russia and Europe

346. How much do U.S. corporations know (and care) about bilateral investment treaties? Some hints from new survey evidence

Author:
Jason Webb Yackee
Publication Date:
11-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
A remarkable number of countries have recently entered into bilateral investment treaties (BITs) as a means of protecting and promoting inward foreign direct investment (FDI). But do the treaties “work?” In exchange for giving up some mea sure of regulatory autonomy, host countries hope to receive increased flows of investment. Scholars have devoted substantial energy to examining whether this so-called “grand bargain” has in fact been realized. Most studies follow a common research design. The number of BITs that a state has signed are counted up, with the resulting independent variable regressed against country-level FDI flow data. Unfortunately, the results of these various and increasingly complex statistical exercises are inconsistent. 1 Some studies show that BITs can have massive positive impacts on foreign investment; others show modest positive impacts; others show no impact at all, or even a negative impact.
Topic:
International Trade and Finance, Bilateral Relations, and Foreign Direct Investment
Political Geography:
United States

347. What will an appreciation of China's currency do to inward and outward FDI?

Author:
Karl P. Sauvant and Ken Davies
Publication Date:
10-2010
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
What will an appreciation of the Chinese yuan do to China's inward and outward direct investment? The discussion so far has been almost exclusively about the impact on China's trade balance. But it is at least as important to see what effect it may have on the country's inward foreign direct investment (IFDI), which plays such a crucial role in China's economic development, and its outward FDI (OFDI), which is receiving increased attention worldwide.
Topic:
Economics, Foreign Exchange, International Trade and Finance, and Foreign Direct Investment
Political Geography:
China

348. Giving Money Away? The Politics of Direct Distribution in Resource Rich States

Author:
Alexandra Gillies
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
The governments of resource rich states have several options for how to allocate oil and mineral revenues, including the direct distribution of revenues to their citizens. This paper discusses the political feasibility and political implications of such cash transfers in the specific context of resource-rich states. Identifying the contexts in which this policy is mostly likely to emerge, and understanding the potential governance risks and benefits, will help policymakers to consider the desirability of cash transfers as an allocation choice.
Topic:
Development, Humanitarian Aid, Poverty, Foreign Aid, and Foreign Direct Investment

349. Technological Readiness in the Middle East and North Africa – Implications for Egypt

Author:
Juliane Brach
Publication Date:
12-2010
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
Innovation is widely recognized as a key driver of sustainable economic development. Governments, international organizations, donors and investors are increasingly interested in evaluating the technological capabilities and innovative capacities in developing countries, but often lack appropriate approaches for such measurement. This paper focuses on innovation and technological progress in the MENA region and discusses the challenges of understanding, expanding and fostering innovative potential in Egypt.
Topic:
Development, Science and Technology, Foreign Aid, and Foreign Direct Investment
Political Geography:
Middle East, Arabia, North Africa, and Egypt

350. China in Africa: A Macroeconomic Perspective

Author:
Benedicte Vibe Christensen
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
In recent years, China has dramatically expanded its financing and foreign direct investment to Africa. This expansion has served the political and economic interests of China while providing Africa with much-needed technology and financial resources. This paper looks at China's role in Africa from the Chinese perspective. The main conclusion is that China, as an emerging global player and one of Africa's largest trading and financial partners, can no longer ignore the macroeconomic impact of its operations on African economies. Indeed, it is in China's interest that its engagement leads to sustainable economic development on the continent. Trade, financing, and technology transfer must continue at a pace that African economies can absorb without running up against institutional constraints, the capacity to service the costs to future budgets, or the balance of payments. A key corollary is that China should show good governance in its own operations in Africa. Finally, macroeconomic analysis needs to be supported by better analytical data and organization of decision making to support China's engagement in Africa.
Topic:
Development and Foreign Direct Investment
Political Geography:
Africa and China