...document: http://dx.doi.org/10.1016/S1064-4857(03)09001-6 Downloaded on: 10-07-2012 References: This document contains references to 35 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 877 times since 2008. * Users who downloaded this Chapter also downloaded: * Michael W Hansen, (2003),"ENVIRONMENTAL ASPECTS OF DANISH FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRI COUNTRY FACTORS IN SHAPING THE GLOBAL ENVIRONMENTAL PRACTICES OF DANISH MULTINATIONALS", Sarianna M. L Multinationals, Environment and Global Competition (Research in Global Strategic Management, Volume 9), Emerald Group Publishing Limited, pp. 65 - 94 http://dx.doi.org/10.1016/S1064-4857(03)09004-1 Ans Kolk, Rob van Tulder, (2003),"INTERNATIONALIZATION AND ENVIRONMENTAL REPORTING: THE GREEN FACE OF THE WO MULTINATIONALS", Sarianna M. Lundan, in (ed.) Multinationals, Environment and Global Competition (Research in Global Strategic Management, Volume 9), Emerald Group Publishing Limited, pp. 95 - 117 http://dx.doi.org/10.1016/S1064-4857(03)09005-3 Petra Christmann, Glen Taylor, (2003),"ENVIRONMENTAL SELF-REGULATION IN THE GLOBAL ECONOMY: THE ROLE OF FIRM C Sarianna M. Lundan, in (ed.) Multinationals, Environment and Global Competition (Research in Global Strategic Management, Volume 9), Emerald Group Publishing Limited, pp. 119 - 145...
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...Analysis of Foxconn: Perspective of a manufacturing sweatshop in China An irreversible trend of economic globalization presents opportunities and challenges in China. Overall, foreign direct investment (FDI) and open trade, two major elements of commercial globalization, have played a crucial role in the international business market in the last thirty years (Lessmann, 2013). To avoid shortcomings, numerous developed countries have established their manufacturing industries in developing countries. Due to the advantages of lower labor cost and abundant resources, China has become the first choice of international manufacturing processing enterprises; therefore, as far as China's economy is concerned, the manufacturing processing industry is a vital element of national income and a crucial part of China's economic structure (Chan, 2013). Nevertheless, although it is indisputable that FDI and open trade have positive effects on the Chinese economy and the development of technology, in recent years, Chinese economic and environmental issues are undeniably caused by economic globalization. (Chen & Ge, 2010; Lessmann, 2013). Foxconn, a representative company of manufacturing industry in China, is a beneficiary and victim of FDI and open trade (Guo, 2012). This case analyzes the labor and the environmental issue of Foxconn caused by FDI and open trade, and recommends the future strategies for Foxconn. Background Foxconn, the trading name of Hon Hai Precision Industry Company...
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...constitution of Argentina. Traditionally, Argentina’s economy was based on agriculture but the service and industrial sectors have grown in recent years (Dicken & Oberg 110). In 2006, the GNI per capita was 201.6. Natural resources in Argentina include fertile plains of the pampas, zinc, lead, tin, iron ore, copper, manganese, uranium and petroleum. Argentina exports primarily raw materials and agricultural products to the European Union. The European Union exports machinery, chemicals, transport equipment and other manufactured goods to Argentina. The European Union is the biggest foreign investor in Argentina. The name of the currency used in Argentina is the Argentine Peso. It can freely be exchanged. The currency can be exchanged freely with 1 peso being equivalent to 0.13 US dollars. Greenfield investments are a good International business proposition. It is a form of foreign direct Investment. A parent company...
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...income. The policy implications of this finding according to some are grow first and then clean up. Some have argued that economic growth is a panacea or “cure all” for environmental degradation, “in the end the best and probably the only-way to attain a decent level of environment quality.” Another writer claims that existing environmental regulations by reducing growth may actually be reducing environmental quality. Explanations for Environmental Kuznets Curve: a) A natural progression of economic development from clean agrarian economies to polluting industries to clean service economies. b) Advanced economies exporting their pollution to less developed countries. c) The internalization of externalities requires relatively advanced institutions for collective decision-making. d) Another model is that below a threshold level of pollution only the dirtiest technology will be used. e) Environmental quality is a stock resource that degrades over time. f) Demand for environmental quality overtakes supply ultimately. g) Decreasing costs in pollution abatement. One of the important implications of an environmental Kuznets curve (EKC) is that growth and development in a country need not lead to environmental degradation. One explanation for the environmental Kuznets curve is that the income elasticity of marginal damage is increasing in income. So, at low levels of income, pollution will rise with neutral growth because the...
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...It will also discuss some of the rules, customs procedures, how to settle disputes between the countries and how NAFTA works overall. NAFTA is a regulation implemented on Jan. 1, 1994, that reduced and eventually abolished tariffs to encourage economic activity between the United States, Canada and Mexico. NAFTA has been given credit with making it easier for Americans to purchase Canadian and Mexican goods, which stimulated a small increase in wages in all three countries, and increased manufacturing and other jobs for U.S. workers. The agreement also radically increased trade between the three nations, from $337 billion in 1993 to $1.182 trillion in 2011(Investopedia). The North American Free Trade Agreement (NAFTA) revolutionized trade and investment in North America, helping to unlock our region’s economic potential. Since it came into effect 15 years ago, North Americans have enjoyed an overall extended period of strong economic growth and rising prosperity. NAFTA has helped to stimulate economic growth and create higher-paying jobs across North America. It has also paved the way for greater market competition and enhanced choice and purchasing power for North American consumers, families, farmers, and businesses. Furthermore, NAFTA has provided North American businesses with better access to materials, technologies, investment capital, and talent available across North America. This has helped make our businesses more competitive, both within North America and around the...
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...| NAFTA and Environmental Protection: Falling Short of the Mark | | | 4/11/2011 | A Look at Some of the Lasting Consequences of Investor Protection Measures | | After the negotiation of the North American Free Trade Agreement in 1992, there has been an increase in the use of Chapter 11 to defend foreign investor rights. The poignant question remains whether these rights do and should take precedence over environmental considerations. This Paper looks at the treatment of investor protection measures and environmental protections contained within NAFTA with a view to their application within international arbitration cases. | NAFTA and Environmental Protection: Falling Short of the Mark A Look at some of the lasting consequences of investor protection Measures Contents Introduction 2 NAFTA Investor Protection Measures 3 Article 1102: National Treatment 3 Article 1103: Most-Favored-Nation Treatment 6 Article 1104 & 1105: Domestic & International Minimum Standards 7 Article 1110: Expropriation and Compensation 8 The Basis for Legal Challenges 11 NAFTA Environmental Protections 13 Article 104: Environmental and Conservative Agreements 14 Article 1114: Environmental Measures 16 Language across all Environmental Provisions 17 Enforcement of Environmental Protections 18 Cases of NAFTA Chapter 11 Arbitration 19 Ethyl Corporation v. Canada 20 S.D. Myers v. Canada 21 Concluding Remarks 22 Bibliography 26 Introduction In Canada, we are proud of our...
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...topic of debate in the twenty-first century. While Chapter One examines the forces and criticisms associated with the globalization process, Chapter Five focuses upon the impact of foreign direct investment on home and host countries. Following an explanation of the balance-of-payments effects of FDI, a series of ethical issues concerning the social responsibilities of MNEs is explored. The cultural and legal foundations of ethical behavior are examined, and the challenges of global warming, pharmaceutical sales, and child labor are highlighted. The chapter concludes with a brief discussion of the need for corporate codes of ethics. Chapter Outline OPENING CASE: ENVIRONMENTAL CHALLENGES FOR NEWMONT MINING IN INDONESIA [See Map 5.1.] This case illustrates the effects of the changing and conflicting attitudes of the national and local Indonesian governments toward foreign direct investment. Headquartered in Denver, Colorado, Newmont Mining is the second largest producer of gold worldwide. Nonetheless, Newmont has decided to close one of its two Indonesian mining operations, Minahasa Raya on the island of Sulawesi. As Indonesia evolved politically, Newmont faced an uncertain political and increasingly aggressive legal landscape. Local groups and courts demanded major investments in social responsibility programs. Further, Newmont...
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...POLITICAL RISK Globalization is the name of the game, every business and individual has a direct or indirect connection with it. Even in the tightest locked-up economy, there is a level of dependence with the global economy. Brands and products have managed to break the national frontiers and sail the murky waters of international markets. The 21st century has seen a more regulated and somewhat “fair” and competitive playfield. International organizations, such as the International Monetary Fund (IMF) and the World Trade Organization (WTO), have gained strength while working to ensure a firm and stable environment for trade and payments at a global scale. Smaller, regional organizations also play a strong hand and trade regulations can be found at a country and state level. This colossal amount of regulations and regulators aim, for the most part, to establish a fair environment for the benefit of both the consumers and the companies; yet, these regulations pose great, and sometimes hidden, risks. But these regulatory risks represent one of the many institutional differences companies may face when entering a foreign market. In order to have a better understanding of the potential political risks, one must study, not only the current state of the targeted area, but also the historical context and analyze examples of other companies in similar situations. Sometimes the industry, or even the area are not the same, but the knowledge gained is still valuable and many points can...
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...Effects of FDI by MNCs in Developing Countries What are Multinational corporations? What motives do they have for foreign direct investment? This paper explores these questions and seeks to find explanations by exploring key economic theories. The impact of FDI on developing nations is discussed with analysis and evaluation of the positive and negative effects. The findings of this essay are that FDI is neither entirely good nor bad for a country. Instead its effects vary and depend on a number of factors. Whilst firms have different strategies and objectives, the aim is ultimately to gain profits. In some instances this comes at the detriment of the welfare in the host nations, but it can also have benefits for these developing countries. | Introduction Foreign direct investment (FDI) has played an important role in developing countries with these nations receiving an increasing share of world FDI inflows (see Fig.1 below). From 1985 to 1990, the FDI inflow into developing nations was 17.4% of the total global flow. This increased to 31-40% in the four years leading up to the financial crisis (Hill, 2014). FDI acts as a major contributor to capital formation in developing countries and can promote growth and sustainable development. However, there are many challenges that the host country can face when dealing with multinational corporations (MNCs). By looking at key issues and analysing empirical evidence, the positive and negative effects that foreign direct investment...
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...Executive summary. The greenfield FDI is a form of direct investment where a parent company starts a new business in a foreign country by setting up new operational facilities. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees. In order to decide which country is better for ‘greenfield’ foreign direct investment via sole ownership, the advantages and disadvantages of the countries should be considered. For example, China is a developing country, and during the past 30 years, China’s rapid economic development shows that China has a strong power in developing economic. In recent decades, China stays on one of the leading positions in direct investment and therefore a lot of investments to this country are considered to be profitable for any company or investor. The reasons are simple: the growth of the economy and a large number of different projects. Foreign direct investment in China, due to stable growth potential of the economy and a huge production resources, aimed at both the external and the internal market.The innovative ability is a great attraction for investment managers around the world. In contrast, a lot of foreign investors had chosen China for investment and this resulted in a very big competition. Nevertheless, USA is a successfully developed country. And its economy is the top one in the world. As the most important country in the first world countries, the USA...
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...di Economica e Management Corso di Laurea in Global Markets ReLATORE/TUTOR: Rodolfo helg Paper di Laurea di : Luca Cantadori Matricola: 14771 Paper di Laurea di : Luca Cantadori Matricola: 14771 Anno Accademico : 2012/2013 Anno Accademico : 2012/2013 CONSEQUENCES OF ECONOMIC GROWTH ON THE ENVIRONMENT:Focus on International Trade i. Economic growth and the environment ii. Environmental Kuznets curve: a. Kuznets Curve:Income inequality and growth b. Income inequality , growth and the environment iii. Population growth: how increasing population could affect the environment iv. Economic impacts of environmental policies: c. Economic growth: investment and innovation d. Effect on competitiveness v. International Trade and the environment vi. Effects of Trade on the environment vii. Trade due to differences in Environmental Policies: e. Pollution Haven case viii. Trade not due to differences in Environmental policies: f. Comparative advantage and environment: how factor endowments can influence environment ix. Conclusion x. References xi. Abstract i.Economic growth and the environment In the first half of the twentieth century there was and incredible explosion of international trade: indeed international trade almost triplicate its size.( According to data...
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...1. Ricardian theorem, HO theorem, definition, explanation One of the most well-known explanations of international trade is the Ricardian theory of comparative advantage. The theory’s distinctive contribution lies in its main tenet that even if one country is more efficient in absolute terms in producing goods than another, short run gains from trade can be obtained if it specializes in the production and export of the goods which it produces relatively efficiently, i.e. in which it holds a comparative advantage. The Heckscher-Ohlin (HO) theorem posits that a country’s endowments of factors of production (labour, capital and land/natural resources), rather than relative efficiencies of production, determine its comparative advantage. Thus, countries such as Tanzania, which have a large supply of labour and land as well as plentiful natural resources of wildlife, mountains and beaches, would appear to have a comparative advantage in tourism. The HO theorem has been applied to the agricultural and manufacturing sectors and attention has generally focused on the endowments of labour and capital. Ricardian theory is useful in indicating the gains which countries can make from international tourism if they are relatively efficient in tourism production and, hence, points to the importance of increasing production efficiency. The HO theorem’s emphasis on the role of countries’ different resource endowments also helps to explain international trade and tourism. 2 International...
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...Around NAFTA’s Chapter 11: The Case of MMT and Canada Introduction The North American Free Trade Agreement (NAFTA) is an agreement liberalizing trade and investment between Canada, the United States, and Mexico. From the moment it took effect on January 1, 1994, the agreement has sparked controversy and fiery debate from groups across the political spectrum regarding its benefits and costs.[i] Much of this debate revolves around Chapter 11, the section of the agreement that deals with investor-state relations. Chapter 11 gives foreign investors the right to sue the host government for damages if they believe they have been treated unfairly. In 1996, the Ethyl Corporation filed a $250 million claim against Canada under Chapter 11 regarding a gasoline additive they produced called MMT. Background • Methylcyclopentadienyl manganese tricarbonyl (MMT) MMT is an octane-improving fuel additive. The chemical compound was developed in the 1950s by what became the Ethyl Corporation (today part of the Afton Chemical Corporation, but hereinafter referred to as “Ethyl”).[ii] MMT was widely used in the United States and Canada, during the 1960s and 1970s in leaded gasoline. However, due to public health concerns, MMT was banned in the late 1970s by the U.S. Environmental Protection Agency (EPA).[iii] The health effects of exposure to manganese through its use in MMT are under research. Manganese, the main component of MMT, is a common element of our diets in low levels....
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...Topic: “Foreign Direct Investment and Country Risk: What kind of Interaction?” Supervisor: Professor D. Kyrkilis Stavroula Samara stav_samara@windowslive.com Foreign Direct Investment and Country Risk Table of Contents Abstract…………………………………………………………………………………………………………………….4 Introduction………………………………………………………………………………………………………………4 Foreign Direct Investment…………………………………………………………………………………………6 The Definition……………………………………………………………………………………………………………6 The Types………………………………………………………………………………………………………………….8 The Multinational Corporations………………………………………………………………………………..9 The Effects………………………………………………………………………………………………………………11 The Final Remarks…………………………………………………………………………………………………..13 Country Risk……………………………………………………………………………………………………………14 The Definition………………………………………………………………………………………………………….15 Various approaches of the literature on country risk (table)……………………………………17 The Historical Background………………………………………………………………………………………17 Country Risk Types and Measurements…………………………………………………………………..18 The Factors……………………………………………………………………………………………………………..22 Country Risk Assessment…………………………………………………………………………………………23 Risk Measures (table)………………………………………………………………………………………………25 The Methods…………………………………………………………………………………………………………..27 How does Country Risk matter for FDI?.......................................................................29 FDI and Country Risk: A Research……………………………………………………………………………33 The Data…………………………………………………………………………………………………………………33 2 Foreign Direct Investment...
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...(Daniels, Radebaugh & Sullivan, 2011). Cavusgil (2012) promote a discussion on globalization international business among an activist, government trade official and a business executive, which concluded their arguments towards the implementation of international business. The activist argues that international business isn’t in accordance to human rights and doesn’t hold true to the same labor standards that of other countries. The activist believed that unrestricted global trading will contribute to inequality with countries that are developing and those countries that are developed. On the other hand, the trade official argues that having trade agreements will unite environmental concerns such as; poverty, standard of living and employment. The interpretation of the trade official is that in order for foreign capital and trade to have justifiable growth, governments must dispense and surrender strong economic management and stability (political) to workers. Finally, the business executive argues that international business is a good concept to diminish low living...
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