...Facts About and Impacts of FDI on China and the World Economy Yuqing Xing China: An International Journal, Volume 8, Number 2, September 2010, pp. 309-327 (Article) Published by NUS Press Pte Ltd DOI: 10.1353/chn.2010.0002 For additional information about this article http://muse.jhu.edu/journals/chn/summary/v008/8.2.xing.html Access Provided by Hamline University at 06/25/12 7:34PM GMT Facts About and Impacts of FDI on China and the World Economy Yuqing XING This paper provides a comprehensive review of foreign direct investment in China over the last three decades. It reviews the growth, sources and distribution of FDI in China and analyses factors determining FDI inflows. It summarises the contributions of FDI to the Chinese economy in terms of economic growth, total factor productivity, exports and technology progress. Finally, the paper discusses potential impacts of FDI in China on the rest of the world in terms of FDI-competing countries and FDI source countries. (FDI) among all developing countries, China received a cumulative total of USD854 billion in FDI from 1979 to 2008 and benefitted tremendously from both tangible and intangible assets associated with FDI inflows. In fact, in the modern history of economic development, no other country has ever benefitted, and continues to benefit, from FDI as much as China. There is a consensus among academic scholars specialising in the Chinese economy that, over the last three decades, FDI has been a critical...
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...Foreign Direct Investment: Impact on Sectoral Growth in Bangladesh Introduction Foreign direct investment (FDI) is a potent weapon of developing the Bangladesh economy and can play an important role in achieving the country’s socio-economic objectives including poverty reduction goals. In a capital-poor country like Bangladesh, FDI can emerge as a significant vehicle to build up physical capital, create employment opportunities, develop productive capacity, enhance skills of local labor through transfer of technology and managerial know-how, and help integrate the domestic economy with the global economy. This policy note provides an assessment of the current situation of FDI in Bangladesh and examines its impact on the country’s balance of payments. Foreign Direct Investment (FDI) is capital provided by a foreign direct investor, either directly or through other related enterprises, where the foreign investor is directly involved in the management of the enterprise. Until the1980s, most developing countries viewed FDI with great weariness. In recent years, however FDI restrictions have been significantly reduced. Most countries offer incentives to attract FDI, such as tax concessions, tax holidays, accelerated depreciation on plants and machinery, export subsidies and import entitlements etc. As a developing country, Bangladesh needs FDI for its ongoing development process. Since independence, Bangladesh is trying to be a suitable location for FDI. Special zones have been...
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...Determinants of FDI THE POWER OF FDI IN REGARDS TO GLOBALIZATION: Globalization is an inevitable and irreversible process, and dealing with the imperatives of globalization capitalizing on its positive aspects and mitigating the negative ones is perhaps the most important challenge for today. Globalization has enhanced the opportunities for success, but it has also posed new risks to developing countries. Globalization has many faces; however, globalization is first and foremost comprehended in economic and financial terms. In this sense, it may be defined as the broadening and deepening linkages of national economies into a worldwide market for goods, services and especially capital. Perhaps the most prominent face of globalization is the rapid integration of production and financial markets over the last decade; that is, trade and investment are the prime driving forces behind globalization. Foreign direct investment (FDI) has been one of the core features of globalization and the world economy over the past two decades. It has grown at an unprecedented pace for more than a decade, with only a slight interruption during the recession of the early 1990s. More firms in more industries from more countries are expanding abroad through direct investment than ever before, and virtually all economies now compete to attract multinational enterprises (MNEs). This trend has been driven by the complex interaction of technological change, evolving corporate strategies towards...
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...available in their own countries through the trading globally. Export is a product that sold to the global market, while the import is bought from the global market. In most countries, international trade represents an important share of gross domestic product (GDP). One of the Asian economies most open to international trade is Vietnam and it has been currently...
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...Effect of FDI on Bilateral Trade Abstract Contemporary literature refers to trade and Foreign Direct Investment (FDI) as alternative strategies. The debate is mainly between two notions: (1) that FDI displaces trade, and (2) that FDI and trade complement each other. Literature on FDI talks about the effect of foreign investments on trade. Lipsey (2002) mentions that outward FDI may decrease or increase (or have no effect on) exports of home country. These effects depend largely on the competitiveness of the host country and the motives behind investment by the home country in the host country. This paper is aimed at studying the effect of FDI on bilateral trade as well as effect at the aggregate level especially in the developed-developing nation paradigm. Introduction Literature suggests that there are a number of motives on which FDI takes place across nations. Most of the firms in the developed countries will go for foreign investment once they fulfill their domestic market and they in order to grow will go to foreign market. In this case the main motive of a firm is to tap new markets. This entry of one firm in to a foreign market will create a bandwagon effect thorough which their competitors will also enter that market. Again, when the competition sets in the foreign market, companies will be forced to take cost reduction measures to achieve higher profits will look for other destinations which have lower cost of production and thus the motive will become efficiency...
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...Direct Investment in Bangladesh CHAPTER ONE Background of the Study 1. Introduction 1.1 Introduction Foreign Direct Investment (FDI) is considered as one of the vital ingredients for overall development process of a developing Bangladesh. country like Industrial development is an important pre-requisite growth country. of for a economic developing is Bangladesh basically a country of agrarian economy. For her economic development, industrial economy is imperative. So Bangladesh is gradually moving from agrarian economy to industrial economy. In the age of globalization, it has become a burning issue to exchange views, ideas, capital and human resources. Government of Bangladesh is trying to create a favorable investment environment through introducing economic policies, incentives for investors, promoting privatization and so on. Therefore, the contribution of FDI is necessary in the enhancement of a country‟s economic growth. Researchers have marked FDI as an important factor in accelerating economic success and wealth of a country as well as a door in creating jobs, facilitating economy, and creating more competitive environment and contributing productivity to the host country. 1 Trends of Foreign Direct Investment in Bangladesh In Bangladesh, FDI plays a significant role in GDP acceleration and economic growth (Mottaleb 2007). FDI has a mentionable role in the modernization of the Bangladesh economy for last two decades. It helps the country in building up infrastructure...
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...Crisis: Origin, consequences and impact on world and Indian economy Submitted By: Ajay Sharma 2011SMF6623 Nitesh Goyal 2011SMF66 Sajal Agarwal 2011SMF66 Contents Description | Page No. | | | | | | | | | | | | | | | | | | | | | | | Impact on India | | Impact of FDI in India | | Snapshot of impact on India | | Conclusion | | References | | Impact on India Though India is primarily a domestic economy, India’s exports are positively linked to the global economic growth. This is likely to adversely impact India’s export growth in the coming months. However, growth will be only marginally affected by the slowdown in the euro region debt stricken countries as our exposure is low. Software services and other export oriented sectors would benefit from the rupee depreciation. FDI has not been significantly affected by the crisis while the FIIs are showing outflow in the last couple of months. International commodity price moderation is not being translated in domestic prices. Inflationary Concerns: Further, exchange rate depreciation would worsen the inflationary conditions in the economy. Therefore, the RBI would have to continue with its anti-inflationary stance in the near term if domestic conditions do not improve Source: World Bank, Ministry of Commerce, Government of India Interpretation of Graph - Graph 1 show that the share of the euro zone exports to their GDP was around 40% in...
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...hrmars.com Impact of Foreign Direct Investment on Nigeria Economic Growth Adeleke Kunle M. Department of accountancy Federal Polytechnic, Offa, Kwara State, Nigeria Olowe S.O Department of accountancy Osun State College of Technology, Esa-Oke, Nigeria Fasesin Oladipo Oluwafolakemi Department of Accountancy Osun State Polytechnic, Iree, Nigeria DOI: 10.6007/IJARBSS/v4-i8/1092 URL: http://dx.doi.org/10.6007/IJARBSS/v4-i8/1092 Abstract The study analyzed the impact of foreign direct investment on Nigeria economic growth over the period of 1999- 2013. The main type of data used in this study is secondary; sourced from various publications of Central Bank of Nigeria, such as; Statistical Bulletin, Annual Reports and Statement of Accounts. The regression analysis of the ordinary least square (OLS) is the estimation technique that is being employed in this study to determine the relationship between and impact of the Direct Foreign Investment on economic growth. The findings revealed that economic growth is directly related to inflow of foreign direct investment and it is also statistical significant at 5% level which implies that a good performance of the economy is a positive signal for inflow of foreign direct investment. This implies that foreign direct investment is an engine of economic growth. The paper recommended that government should liberalize the foreign sector in Nigeria so that all barriers to trade such as arbitrary tariffs; import and export duties and other...
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...culmination of American efforts to normalize relations with the former enemy. In 1986 the Doi Moi resulted in Vietnams sucessful transition to a socialist orientated market economy. Elements of market forces and private enterprises were introduced soon after and a stock exchange opened in 2000. In 2007 Its successful economic reforms resulted in it joining the World Trade Organization which has promoted more competitive, export-driven industries, It also became an official negotiating partner in the Trans-Pacific Partnership trade agreement in 2010. These lifts in protectionism has meant that poverty has declined significantly however, Vietnam is still working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. It also still suffers from relatively high levels of income inequality, disparities in healthcare provision, and poor gender equality. This essay aims to firstly set out the role of the WTO and why Vietnam sought accession, it will then discuss both the positive and negative impacts that freer trade has had on the country. Vietnam joined ASEAN/AFTA in 1995, ASEM in 1996, and APEC in 1998. In January 1995, Vietnam applied for WTO...
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...THE EMPIRICAL ANALYSIS OF IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN NIGERIA BY OKUNLOLA TUNDE S. MATRIC NO: 139191 September 2011 Being research work submitted to Department of Economics, Faculty of Social Sciences, University of Ibadan, in partial fulfillment of the requirement for the award of Bachelor of Science (B.Sc) in Economics CERCTIFICATION I hereby certify that this work was carried out by OKUNLOLA TUNDE S. of Matric No 139191 in the Department of Economics, Faculty of Social Sciences, University of Ibadan. …………………………………. ……………………………… Date Dr. B. Fowowe Supervisor DEDICATION My sole dedication goes to God almighty whose mercy has never ceased in changing me despite all odds, whose boundless love and vast grace is bringing to pass my childhood dreams and fantasies. ACKNOWLEDGMENT My deepest gratitude goes to my parents who always, tirelessly and sacrificially support me, trust me, care for me and love me despite all my short comings and even when it so difficult. May the lord reward you abundantly. And also to my supervisor, Dr. B. Fowowe, I say thank...
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...The Potentialities and Sustainability of Export Processing Zones in a Competitve Environment in an Integrated Economy:Evidence from Tanzania By Joseph S.Kiria Introduction and Background Proposed research is literally about potentiality of Export Processing Zones (EPZs) in achieving strategic objectives envisaged in the national vision development objectives in Tanzania. Study explores the potentiality and sustainability of EPZ as a development strategy in the context of linkage with Foreign Direct Investment (FDI) and its benefits in a competitive environment. An understanding of this subject is important for at least four reasons.Firstly, government spends part of its limited budget through fiscal incentives to subsidize EPZs. This is a revenue loss to the governemnt, and such budgetary impact have implications on other government development programmes. Secondly, though EPZs strategy may look impressive, it may be constrained by the level of competiton created by liberalization, therefore, identifying challenges and limitations facing the regime in the competitive environment encouraged by free trade regime is important to enhance its sustainability.Thirdly, there is evidence elsewhere that it is mainly cheap labour and excellent infrastructure but not fiscal incenntives that attract export-oriented FDI.A proof will provide a lesson and new experince in the context of this study.Lastly, Tanzania experience on EPZ has not been explored enough partly due to the newness...
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...The role of FDI in economic development 3 2.2.1 The radical view of FDI 3 2.2.2 The positive view of FDI impact 4 2.3 The impact of economic development 5 3. Case of study: the impact of FDI in garment industry and automobile industry in Viet Nam 7 3.1 Overview of FDI in Vietnam 7 3.2 Garment industry 8 3.3 Tourism Industry 9 3.4 Assess the impact of FDI in Vietnamese economic development 10 4. Conclusion 11 References 14 Appendices 17 1. Introduction to the study Foreign direct investment (FDI) is a concept that has emerged in recent decades. It was born with the trend of globalization and become an interesting topic for economic researchers. The evidence is that there are a large number of studies on this field, including case studies in specific country and cross-country analyses, single-dimensional and multi-dimensional studies, examinations in single-sector and multi-sector. However, until now there are still some debates about the issues related to this concept. One of the noticeable discussions is the relationship between foreign direct investment and economic development. This paper, to some extent, will review these studies about the relationship between foreign direct investment and economic development. In specific, it aims to answer the question: Is foreign direct investment necessary for economic development? Or how foreign direct investment can impact economic development...
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...there is a ‘cumulative causation’between foreign direct investment and exports and economic growth. Heclaimed that foreign direct investment (FDI) had a huge influence on the export performance of the developing countries, the degree of exports stimulates economy growth thus attract more FDI. There are some evidences exist to prove his claim. China isone of the good examplesto indicate that. Song and Zhang (2001) stated that there was a strong link between foreign direct investment and exports in China. Exports which generated by FDI had attracted more FDI into China. It also provided the evidence that only 1 percentage of FDI level changed in 2000 was related to 0.29 percentages rise in exports in 2001 (Song and Zhang). Moreover, foreign investment has played a vital role in both China’s economy and fast growth (Whalley&Xin, 2010). According according to Whalley and Xin (2010), their research result has shown that ‘China’s growth rate may have been around 3.4 percentage points lower in the past few years’ without FDI(Whalley&Xin, 2010). While on the other hand, this ‘cumulative causation’ application may be affected by current global situation. The export-led growth strategy for those least developed countries seem to be not so effective in recent years. According to Stewart (2011), Unctadsuggeststhat the least developed countries may come up with some effective growth strategies instead of their current export-led strategy. Chinese cheap products exporting strategy may not work...
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...widely by these nations. Economic growth is often seen as the 'holy grail' of economic policy. This simplistic emphasis on economic growth is often criticized because of the limitations of economic growth in improving living standards. Another question arise is does economic growth promote sustainable improvement on country development? Malaysia economy has been transformed from a protected low income supplier of raw materials to a middle income emerging multi-sector market economy in the past 20 years. This is driven by the export of manufacturing goods, particularly electronics and semiconductors, which constitute about 90% of exports. In this paper, the primary objective is to investigate what is the relationship between openness, inflation and FDI with economic growth. Export and import often plays pivotal role in determine the gross domestic product (GDP) in a nation. In particular, the research question to be outlined is how does openness, inflation and FDI affect economic growth. Multinational corporations (MNCs) are those organizations that own or controls productions of goods or services in one or more countries other than its home country. MNC plays major role in foreign aids recipient countries, it contribution to a nation’s economy has became gradually vital. Typically, the contribution of MNC to a domestic economy is via fund transfer channel such as foreign direct aids and advance technology into the host country especially in low development countries (LDCs). Higher...
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