The inflow of foreign direct investment to China: the impact of country-specific factors
|
|
- Esther Wright
- 5 years ago
- Views:
Transcription
1 Journal of Business Research 56 (2003) The inflow of foreign direct investment to China: the impact of country-specific factors Yigang Pan* York University, Toronto, Ontario, Canada The University of Hong Kong, Pokfulam Road, Hong Kong, China Abstract This study examines the impacts of source and host country factors on the inflow of foreign direct investment (FDI) into China between 1984 and Drawing upon the existing FDI literature, some findings related to Western countries are investigated for China. In addition, effects that are particularly salient to transitional economies, such as risk conditions in the host country, are hypothesized and tested. D 2003 Elsevier Science Inc. All rights reserved. Keywords: Foreign investment; Country-specific factors; Transitional economies; China 1. Introduction Research on foreign direct investment (FDI) has attracted the attention of scholars in the fields of international business and economics over the last decade. In particular, there is a sizeable body of knowledge regarding the inflow of FDI into the United States (Grosse and Trevino, 1996; Tallman, 1988). By comparison, less is understood about what drives FDI in transitional economies, such as China (Batra, 1997; Child and Tse, 2001). China is the second largest recipient of FDI in the world. FDI in China increased from less than US$10 billion in 1990 to US$42.6 billion in 1996 (Chadee and Qiu, 2001). By the end of 1996, Chinese authorities had approved 284,000 foreign enterprises, 140,000 of which had begun operation (China statistical yearbook, 1997). Foreign enterprises are estimated to employ more than 17.5 million people (about 10% of the country s nonrural labor force) and account for nearly half of China s total foreign trade volume. In short, FDI in China plays a pivotal role in the country s economy. Nonetheless, our understanding of the drivers of foreign investment in China is much weaker than our understanding for the developed world. * The University of Hong Kong, Pokfulam Road, Hong Kong, China. Tel.: ; fax: address: ypan@hkusua.hku.hk (Y. Pan). The goal of this study is to investigate the influence of several country-specific factors on the inflow of FDI in China. Drawing on existing literature, I propose that factors related to both the source country and the host country can be used to explain the inflow of FDI in China. Data on FDI into China from 30 countries, between 1984 and 1996, are used to investigate this issue. 2. Theoretical development and hypotheses Country-specific factors are macro-level environmental characteristics of the source and host countries that are presumed to affect firms investment activities (Kogut and Singh, 1988; Tallman, 1988). The factors addressed in this study reflect economic, political, and cultural considerations Exchange rate Previous research has shown relationships between exchange rate fluctuation and FDI. Examining the movement of FDI into the United States, Froot and Stein (1991) found dollar depreciation to be associated with additional FDI inflows during Pan (2002) noted that firms from countries with appreciating currencies tend to acquire higher equity levels in joint ventures in China. Caves (1988) also found that the strength of a /03/$ see front matter D 2003 Elsevier Science Inc. All rights reserved. doi: /s (02)
2 830 Y. Pan / Journal of Business Research 56 (2003) country s currency, relative to the dollar, is an important explanatory variable for its direct investment in the United States. Conceptually, exchange rate fluctuations affect FDI in two ways (Dewenter, 1995). First, the appreciation of a source country s currency against that of a host country means that the source country s investment increases in value when denominated into the host country s currency. This makes the investment cheaper from the source country s perspective (Ajami and Barniv, 1984; Cushman, 1985; Grosse and Trevino, 1996). Froot and Stein (1991) argued that currency appreciation increases the wealth position of firms denominated in foreign currencies, lowering their relative cost of capital and allowing them to invest more aggressively overseas [A case in point is the massive Japanese overseas investment in the late 1980s.]. Second, currency appreciation makes goods from the source country more expensive when denominated in the host country s currency, making exporting from the source country to the host country less cost-competitive. This motivates firms from the source country to relocate the production of goods to the host country (Froot and Stein, 1991). Both considerations mean that a currency appreciation in the source country should be associated with higher outward direct investment from firms in that country. Therefore, I H1: Source countries with an appreciating currency have a higher level of FDI in China Cost of borrowing Previous studies have shown that the cost of raising capital in a country affects its FDI outflow (e.g., Froot and Stein, 1991; Pan, 2002). Higher lending rates increase such costs, causing firms to earn higher profits to meet their expectations net of debt repayments. Domestically, it can be argued that firms compete on roughly equal footing, because they are faced with similar interest rates. Internationally, however, firms from source countries with high lending rates are at a cost disadvantage in raising capital, compared with those from countries with low lending rates (Grosse and Trevino, 1996). One might expect that, in a world with mobile capital, risk-adjusted expected returns on all international assets would be equalized, meaning that interest rate differences should have no bearing on FDI. In reality, capital mobility is not perfect. Only very large multinational corporations can raise capital internationally. In addition, complications such as hidden costs and exchange rate fluctuations work against raising capital in a third country. Grosse and Trevino (1996) found that the cost of borrowing at home did affect outward FDI into the United States. Firms from countries with low interest rates enjoy a cost advantage that enables them to raise more capital with a lower burden of interest payment. Holding other factors constant, such firms should be able to raise more capital for overseas investment. Thus, I expect: H2: Source countries with lower lending rates have a higher level of FDI in China Size of source country The existing literature suggests source country size has a positive impact on the outflow of FDI (Ajami and Barniv, 1984; Tallman, 1988; Grosse and Trevino, 1996). It is easier for firms from a large home country to raise the capital needed to invest overseas. Because larger countries tend to have more firms that can expand into international markets aggressively and on a larger scale, I hypothesize the following: H3: Source countries with higher GDP have a higher level of FDI in China Reliance of source country on external trade A country s ability to engage in external trade is expected to affect its ability to undertake FDI (Ajami and Barniv, 1984; Grosse and Trevino, 1996). Firms in countries with a heavy reliance on external trade are more accustomed to learning and operating in a foreign environment. They know more about how to compete on the world market, and should be more likely to invest in a foreign host country. In addition to overall world trade positions, the level of bilateral trade between the source and the host countries is of interest. Following the same logic, I expect that the higher the volume of bilateral trade, the higher the volume of FDI from the source country to the host country. Thus, I H4: Source countries with higher volumes of external trade and bilateral trade with China have higher levels of FDI in China Risk conditions in host country Past studies have proposed that, when a host country is riskier, foreign firms are less likely to invest nonredeployable assets there (Erramilli and Rao, 1993; Kim and Hwang, 1992). However, Pan (1996) found the reverse, considering the risk situation and foreign equity ownership in China. Foreign firms investing during riskier times may place importance on acquiring a higher level of equity, in order to have control of the venture. This is particularly salient in a transitional economy like China. When the broad-based country risk deteriorates, state-owned local firms tend to be mired in trouble, forcing foreign firms to take control if they want to invest in China at all (Pan and Li, 2000). Nonetheless, because previous studies on the macro-level inflow of FDI point to the pattern that it is affected negatively
3 Y. Pan / Journal of Business Research 56 (2003) by deteriorating risk conditions in the host country (Grosse and Trevino, 1996), I hypothesize as follows: H5: The level of FDI into China increases as the risk conditions in China improve Closeness between source and host countries The attractiveness of a host country differs in the eyes of firms from different nations. Previous studies have indicated that firms prefer to invest in countries that are culturally similar to their own (Kogut and Singh, 1988). If they are culturally close to a host country, investing firms are likely to have better knowledge of the local market, customers, and business networks. Two indicators have been used to assess the closeness between two countries. One is the length of diplomatic ties (Tse et al., 1997). Studies suggest that countries with longer diplomatic relationships tend to be closer economically. An existing diplomatic relationship offers businesses formal channels of communication, exchange, and protection. The longer the diplomatic relationship, the longer the history of exchange between firms in the two countries. Thus, I expect that the inflow of FDI into China will be higher from source countries with longer diplomatic ties with China. The second measure is the geographic distance between two countries. Larger geographic distance is presumed to make conducting business more inconvenient. Thus, I H6: The level of FDI into China increases as the length of diplomatic ties increases and the geographic distance decreases between China and the source country Management orientation of host country The attractiveness of a host country also depends on its similarities to the source country, in terms of business practices. Large differences make it harder for investors to acquire information and to monitor, evaluate, and control their overseas operations (Kogut and Singh, 1988). One important managerial distinction between countries is due to risk orientation, or uncertainty avoidance (Hofstede, 1994). This is the extent to which people of a culture feel threatened by uncertain situations. In low uncertainty avoidance countries, firms tend to be more risk taking and less worried about a lack of predictability. Such firms are likely to be more willing to engage in FDI, compared to firms from source countries with high uncertainty avoidance. Another cultural difference relates to power distance (Hofstede, 1994), which is the extent to which the less powerful members of institutions within a culture accept that power is distributed unequally. Small power distance means that people in a society see themselves as relatively equal to others. Large power distance implies that people accept more unequal relationships among individuals, in terms of social and business hierarchies. Firms from source countries characterized by large power distance may prefer to maintain hierarchical relationships in their overseas investments, making them more likely to pursue FDI, rather than other, more cooperative types of ventures. Thus, I H7: The level of FDI into China is higher from source countries with low uncertainty avoidance and with high power distance. 3. Method 3.1. Dependent variable The dependent variable is the annual FDI inflow into China from each of 30 countries between 1984 and 1996, from the Almanac of Foreign Economic Relations and Trade of China ( ). The data represent utilized, as opposed to contracted, FDI Independent variables Data for several of the independent variables are sourced from the International Financial Statistics ( ), published by the International Monetary Fund ( ). Exchange rates are measured by the ratio of RMB to the currency of each source country, in US dollars, for each year. Lending rates are used to reflect the cost of borrowing and GDP represents size. Reliance on external trade is measured by each country s volumes of import and export. Bilateral trade between the source country and China is obtained from the Almanac of Foreign Economic Relations and Trade of China ( ). Risk conditions in China are measured in two ways. The first is an annual risk assessment reported by Euromoney ( ); this is on a scale of 0 100, with 100 indicating a risk-free environment. The second measure is a dummy variable to capture the impact of 1989 Tiananmen Square incident, coded as 1 for 1989 and 1990, and 0 for other years. The length of diplomatic ties is operationalized as the number of years since the source country established diplomatic relationships with China. Geographic distance is measured using a categorical variable, with a larger number indicating farther distance from China; Hong Kong = 1, South East Asia = 2, Japan and South Korea = 3, US and Canada = 4, and Europe = 5. The data for uncertainty avoidance and power distance are from Hofstede (1994). 4. Results Table 1 reports the annual inflows of FDI to China from six major sources: Hong Kong, Japan, US, Germany, UK,
4 832 Y. Pan / Journal of Business Research 56 (2003) Table 1 Annual inflow of foreign direct investment in China (in million US dollars) Year Hong Kong Japan USA Germany UK France , , , , , Data source is the Almanac of Foreign Economic Relations and Trade of China ( ). and France. Hong Kong is the largest investor, with levels of over US$20 billion in 1995 and The pattern of FDI inflow reflects changes in the Chinese investment environment. As the legal framework, market systems, and infrastructures are improving in China, the volume of FDI has tended to increase. However, 1989 saw a dramatic downturn in FDI inflow. Interestingly, FDI from Hong Kong and Japan was reduced dramatically after the 1989 Tiananmen incident, while investment from the US, Germany, and Britain was less immediately affected. The high investments of Hong Kong, Japan, Germany, and the US in 1991 probably pent-up demand from firms on hold after the Tiananmen incident Regression results Two regressions were run (Models I and II) to allow for a more complete assessment of the hypotheses (see Table 2) Exchange rate Exchange rate is not found to be a significant determinant for aggregate FDI inflow in China in either Model I or Model II. Thus, H1 is not supported [It is interesting to note the changes in the Chinese currency over the period of this study. The RMB was devalued gradually from 1.5 per U.S. dollar in the early 1980s to 3.8 in It dropped to 4.8 in 1990, and to around 5.5 during In 1994, it nosedived to 8.6, and has since been hovering at around that level.] Cost of borrowing The cost of borrowing in the source country has a negative association with its inflow of FDI to China, supporting H2. In line with the existing literature, firms from source countries with lower lending rates are more likely to invest in China Size of source country Source country GDP has a significant impact on FDI in China, but a negative one. Contradicting H3, this result indicates that the smaller the size of source country, the more FDI in China it tends to have. It is possible that smaller countries are more eager to explore the newly opened transitional economy. It is also possible that this finding was driven by the heavy investments from Hong Kong and Singapore Reliance on external trade Supporting H4, higher levels of both external trade in source countries and bilateral trade with China are associated with higher inflows of FDI into China Risk condition of China The support for H5 is mixed. The coefficient for the Tiananmen Square incident dummy variable was negative and significant, indicating that 1989 and 1990 saw a decline in FDI inflow. However, the Euromoney ( ) risk variable revealed counter-intuitive results, showing that more favorable risk assessments were associated with smaller inflows of FDI [The risk assessments by Institutional Investor yielded similar results.] Closeness to host country Neither the length of diplomatic ties nor geographic distance plays a significant role in predicting the inflow of FDI into China, so H6 receives no support Managerial orientation Both the risk avoidance and power distance portions of H7 are supported. The results indicate that firms from high risk avoidance countries have lower FDI in China, while those from high power distance countries have higher FDI. Table 2 Determinants of foreign direct investment in China Independent variables Model I Model II Intercept (0.775)* * * (1.677) Exchange rate (0.078) (0.065) Lending rate (0.039)* * * (0.030) Uncertainty avoidance (0.008)* * * (0.008) Power distance (0.009)* * * (0.009) Source Country GDP (0.000)* * * Source Country Trade (0.001)* * * Country risk (China) (0.014)* * * 1989 Tiananmen incident (0.326) * * Bilateral trade volume (0.019)* * * Bilateral diplomatic tie (0.015) Geographic distance (0.231) Model R N The numbers in parentheses are standard errors. ** P <.05. *** P <.01.
5 Y. Pan / Journal of Business Research 56 (2003) Discussion Source country characteristics can be seen as push factors for overseas investment. Such factors have been well documented in previous research on macro-level flows of FDI. However, existing studies are largely based on data from developed countries. In this study, I have verified some earlier findings in the transitional economy of China. Not all of the hypothesized relationships (e.g., exchange rates and source country size) were supported, implying that some of the FDI patterns observed in developed countries cannot be generalized to transitional economies. Based on the empirical evidence, it is possible to speculate on the motivations of foreign firms investing in China. It is likely that a substantial proportion of the FDI in China has been aimed at tapping China s domestic market. Under this assumption, we can understand why some factors did not play their expected roles. Exchange rates may not be important considerations because foreign firms are not planning to take profits out of China in the short term. When investing in developed countries, firms tend to plan for capital movements into and out of the host country. In this transitional economy, foreign investment may be for a longer duration, reducing the importance of exchange rates as a consideration. Even though Pan (2002) found that foreign firms from a source country with an appreciating currency hold more equity ownership in joint ventures in China, this study does not find that the appreciating currency is associated with a larger amount of FDI in China. Evidently, foreign investment in joint ventures is only part of the aggregate FDI. In other words, future research should explore the relationship between exchange rate of a source country and its overseas investment using different modes of entry. Similarly, proximity to the host country may be more important for firms engaging in sourcing activities, instead of market seeking activities. When aiming at penetrating the Chinese market, firms from more distant source countries may have more incentive to establish the investment in China, reducing transportation costs. There are limitations in this study that should be addressed in future research. The study is based on archival data. While the size of the archival data set and its longitudinal nature are strong points, it lacks the richness to study firm-level decision processes. Another limitation is the lack of some measures (e.g., relative rate of return) used in previous studies, preventing the full replication of studies related to FDI in developed countries. This study shows that FDI in China bears some similarities to FDI in developed countries. More importantly, there are some dissimilarities, which may reveal unique characteristics of FDI in transitional economies. This study raises the need for further research to investigate the differences in FDI in developed countries and transitional economies. References Ajami RA, Barniv R. Utilizing economic indicators in explaining foreign direct investment in the U.S. Manage Int Rev 1984;24(4): Batra R. Executive insight: marketing issues and challenges in transitional economies. J Int Mark 1997;5(4): Caves RE. Exchange rate movements and foreign direct investment in the United States. Harvard Institute of Economic Research, Chadee DD, Qiu F. Foreign ownership of equity joint ventures in China: a pooled cross section time series analysis. J Bus Res 2001;52(2): Child J, Tse DK. China s transition and its implications for international business. J Int Bus Stud 2001;32(1):5 21. China Ministry of Foreign Economic Relations and Trade. Almanac of foreign economic relations and trade of China, Beijing. China Statistical Information and Consultancy Service Centre. China statistical yearbook, Beijing. Cushman DO. Real exchange rate risk: expectations and the level of direct investment. Rev Econ Stat 1985;67: [May]. Dewenter KL. Do exchange rate changes drive foreign direct investment? J Bus 1995;68(3): Erramilli MK, Rao CP. Service firms international entry-mode choice: a modified transaction cost analysis approach. J Mark 1993;57:19 38 [July]. Euromoney Publications. Euromoney London. Froot KA, Stein JC. Exchange rates and foreign direct investment: an imperfect capital markets approach. Q J Econ 1991;106: [November]. Grosse R, Trevino LJ. Foreign direct investment in the United States: an analysis by country of origin. J Int Bus Stud 1996;27(1): Hofstede G. Management scientists are human. Manage Sci 1994;40(1): International Monetary Fund. International Financial Statistics, Washington, DC. Kim WC, Hwang P. Global strategy and multinationals entry mode choice. J Int Bus Stud 1992;23:29 53 [Spring]. Kogut B, Singh H. The effect of national culture on the choice of entry mode. J Int Bus Stud 1988;19: [Fall]. Pan Y. Influences on foreign equity ownership level in joint ventures in China. J Int Bus Stud 1996;27(1):1 26. Pan Y. Equity ownership in international joint ventures: the impact of source country factors. J Int Bus Stud 2002;33(2): Pan Y, Li X. Joint venture formation strategies of very large multinational firms. J Int Bus Stud 2000;31(1): Tallman SB. Home country political risk and foreign direct investment in the United States. J Int Bus Stud 1988;19(2): Tse DK, Pan Y, Au KY. How MNCs choose entry modes and form alliances: the China experience. J Int Bus Stud 1997;28(4):
Chapter 5: Internationalization & Industrialization
Chapter 5: Internationalization & Industrialization Chapter 5: Internationalization & Industrialization... 1 5.1 THEORY OF INVESTMENT... 4 5.2 AN OPEN ECONOMY: IMPORT-EXPORT-LED GROWTH MODEL... 6 5.3 FOREIGN
More informationAmerica in the Global Economy
America in the Global Economy By Steven L. Rosen What Is Globalization? Definition: Globalization is a process of interaction and integration 統合 It includes: people, companies, and governments It is historically
More informationThe Location Decision of Foreign Direct Investment with a Special Reference to Ethnic Network
The Location Decision of Foreign Direct Investment with a Special Reference to Ethnic Network Yin-Lin Tsai, Ph.D., Assistant Professor, National Chi Nan University, Taiwan ABSTRACT The location decision
More informationPOLICY BRIEF. Going Global: Can the People s Republic of china. Flows? Introduction. 2. The PRC s Rise as an Emerging Global Investor APRIL 2014
NO. 13 APRIL 2014 POLICY BRIEF KEY Points In 2012, the People s Republic of China (PRC) emerged as the third largest foreign direct investor in the world. This represented a continuation of the recent
More informationThe Chinese Economy. Elliott Parker, Ph.D. Professor of Economics University of Nevada, Reno
The Chinese Economy Elliott Parker, Ph.D. Professor of Economics University of Nevada, Reno The People s s Republic of China is currently the sixth (or possibly even the second) largest economy in the
More informationChapter 1 Introduction
Chapter 1 Introduction Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity. Adam Smith,
More informationExplaining Asian Outward FDI
Explaining Asian Outward FDI Rashmi Banga UNCTAD-India ARTNeT Consultative Meeting on Trade and Investment Policy Coordination 16 17 July 2007, Bangkok SOME FACTS Outward FDI -phenomenon of the developed
More informationASIAN CURRENCY CRISES IMPACT ON THAILAND, INDONESIA& SOUTH KOREA
ISSN: 2394-277, Impact Factor: 4.878, Volume 5 Issue 1, March 218, Pages: 79-88 ASIAN CURRENCY CRISES IMPACT ON THAILAND, INDONESIA& SOUTH KOREA 1 Rohan Regi, 2 Ajay S. George, 3 Ananthu Sreeram 1, 2,
More informationTRENDS AND PROSPECTS OF KOREAN ECONOMIC DEVELOPMENT: FROM AN INTELLECTUAL POINTS OF VIEW
TRENDS AND PROSPECTS OF KOREAN ECONOMIC DEVELOPMENT: FROM AN INTELLECTUAL POINTS OF VIEW FANOWEDY SAMARA (Seoul, South Korea) Comment on fanowedy@gmail.com On this article, I will share you the key factors
More information5. Destination Consumption
5. Destination Consumption Enabling migrants propensity to consume Meiyan Wang and Cai Fang Introduction The 2014 Central Economic Working Conference emphasised that China s economy has a new normal, characterised
More informationProcedia - Social and Behavioral Sciences 109 ( 2014 ) The East Asian Model of Economic Development and Developing Countries
Available online at www.sciencedirect.com ScienceDirect Procedia - Social and Behavioral Sciences 109 ( 2014 ) 1168 1173 2 nd World Conference On Business, Economics And Management - WCBEM 2013 The East
More informationTHE GLOBAL ECONOMIC CRISIS DEVELOPING ECONOMIES AND THE ROLE OF MULTILATERAL DEVELOPMENT BANKS
THE GLOBAL ECONOMIC CRISIS DEVELOPING ECONOMIES AND THE ROLE OF MULTILATERAL DEVELOPMENT BANKS ADDRESS by PROFESSOR COMPTON BOURNE, PH.D, O.E. PRESIDENT CARIBBEAN DEVELOPMENT BANK TO THE INTERNATIONAL
More informationComparative corporate strategies: What determines Chinese outward FDI?
Comparative corporate strategies: What determines Chinese outward FDI? Ivar Kolstad and Arne Wiig, Chr. Michelsen Institute CEIC-CMI conference, 30 June 2009 Main result Brief background: The Economist:
More informationFinal exam: Political Economy of Development. Question 2:
Question 2: Since the 1970s the concept of the Third World has been widely criticized for not capturing the increasing differentiation among developing countries. Consider the figure below (Norman & Stiglitz
More informationInternational Business 9e
International Business 9e By Charles W.L. Hill McGraw Hill/Irwin Copyright 2013 by The McGraw Hill Companies, Inc. All rights reserved. Chapter 3 Political Economy and Economic Development What Determines
More informationMain Tables and Additional Tables accompanying The Effect of FDI on Job Separation
Main Tables and Additional Tables accompanying The Effect of FDI on Job Separation Sascha O. Becker U Munich, CESifo and IZA Marc-Andreas Muendler UC San Diego and CESifo November 13, 2006 Abstract A novel
More informationDetermining factors of inbound travel to Japan A stronger yen matters more for the NIEs than China
Mizuho Economic Outlook & Analysis February 19, 216 Determining factors of inbound travel to Japan A stronger yen matters more for the NIEs than < Summary > To analyze the sustainability of inbound travel
More informationInternational Journal of Humanities & Applied Social Sciences (IJHASS)
Governance Institutions and FDI: An empirical study of top 30 FDI recipient countries ABSTRACT Bhavna Seth Assistant Professor in Economics Dyal Singh College, New Delhi E-mail: bhavna.seth255@gmail.com
More informationNetworks and Innovation: Accounting for Structural and Institutional Sources of Recombination in Brokerage Triads
1 Online Appendix for Networks and Innovation: Accounting for Structural and Institutional Sources of Recombination in Brokerage Triads Sarath Balachandran Exequiel Hernandez This appendix presents a descriptive
More informationDeterminants of Outward FDI for Thai Firms
Southeast Asian Journal of Economics 3(2), December 2015: 43-59 Determinants of Outward FDI for Thai Firms Tanapong Potipiti Assistant professor, Faculty of Economics, Chulalongkorn University, Bangkok,
More informationTwo-dimensional Fragmentation in East Asia: Conceptual Framework and Empirics =
Two-dimensional Fragmentation in East Asia: Conceptual Framework and Empirics = Fukunari Kimura and Mitsuyo Ando Faculty of Economics, Keio University Tokyo, Japan (fkimura@econ.keio.ac.jp; m-ando@mbj.nifty.com)
More informationThe Gravity Model on EU Countries An Econometric Approach
European Journal of Sustainable Development (2014), 3, 3, 149-158 ISSN: 2239-5938 Doi: 10.14207/ejsd.2014.v3n3p149 The Gravity Model on EU Countries An Econometric Approach Marku Megi 1 ABSTRACT Foreign
More informationAn Empirical Analysis of Pakistan s Bilateral Trade: A Gravity Model Approach
103 An Empirical Analysis of Pakistan s Bilateral Trade: A Gravity Model Approach Shaista Khan 1 Ihtisham ul Haq 2 Dilawar Khan 3 This study aimed to investigate Pakistan s bilateral trade flows with major
More informationWORLD ECONOMIC EXPANSION in the first half of the 1960's has
Chapter 5 Growth and Balance in the World Economy WORLD ECONOMIC EXPANSION in the first half of the 1960's has been sustained and rapid. The pace has probably been surpassed only during the period of recovery
More informationFinance and the Rise of Neoliberalism. Dr Bruce Cronin University of Greenwich Business School, London
Finance and the Rise of Neoliberalism Dr Bruce Cronin University of Greenwich Business School, London Bruce Cronin 2004 The Rise of Financial Capital Creation of Reserve Banks Repeated banking crises 30s
More informationAssessing Barriers to Trade in Education Services in Developing ESCAP Countries: An Empirical Exercise WTO/ARTNeT Short-term Research Project
Assessing Barriers to Trade in Education Services in Developing ESCAP Countries: An Empirical Exercise WTO/ARTNeT Short-term Research Project Ajitava Raychaudhuri, Jadavpur University Kolkata, India And
More informationForeign Finance, Investment, and. Aid: Controversies and Opportunities
Chapter 10 Foreign Finance, Investment, and Aid: Controversies and Opportunities Problems and Policies: international and macro 1 The International Flow of Financial Resources A majority of developing
More informationChapter 4 Specific Factors and Income Distribution
Chapter 4 Specific Factors and Income Distribution Chapter Organization Introduction The Specific Factors Model International Trade in the Specific Factors Model Income Distribution and the Gains from
More informationCan Japan Take Standpoint Promoting Establishment of Common Currency in East Asia?
Far Eastern Studies Vol.8 March 2009 Center for Far Eastern Studies, University of Toyama Can Japan Take Standpoint Promoting Establishment of Common Currency in East Asia? Takaaki HATTORI * 1 Introduction
More informationINTRODUCTION EB434 ENTERPRISE + GOVERNANCE
INTRODUCTION EB434 ENTERPRISE + GOVERNANCE why study the company? Corporations play a leading role in most societies Recent corporate failures have had a major social impact and highlighted the importance
More informationChina: The Dragon's Effect on Southeast Asia
Research Brief China: The Dragon's Effect on Southeast Asia Abstract: The rise of China as a manufacturing giant is claiming some victims, particularly among Southeast Asian markets, which are scrambling
More informationCHAPTER 10: Fundamentals of International Political Economy
1. China s economy now ranks as what number in terms of size? a. First b. Second c. Third d. Fourth 2. China s economy has grown by what factor each year since 1980? a. Three b. Five c. Seven d. Ten 3.
More informationTrade, Border Effects, and Regional Integration between Russia s Far East and Northeast Asia
Trade, Border Effects, and Regional Integration between Russia s Far East and Northeast Asia Russia s Far East (RFE) is set to benefit from Russia s growing economic cooperation with China in the face
More informationEast Asian Currency Union
East Asian Currency Union October 2006 Jong-Wha Lee Korea University and Robert J. Barro Harvard University Motivation Are Current Exchange Rate Arrangements in East Asia Appropriate? Before the crisis,
More informationSummary of Democratic Commissioners Views
Summary of Democratic Commissioners' Views and Recommendations The six Democratic Commissioners, representing half of the Commission, greatly appreciate the painstaking efforts of the Chairman to find
More informationHigher education global trends and emerging opportunities to Kevin Van-Cauter Higher Education Adviser The British Council
Higher education global trends and emerging opportunities to 2020 Kevin Van-Cauter Higher Education Adviser The British Council Outline Where are international students coming from? Trends in Engineering
More informationChapter Ten Growth, Immigration, and Multinationals
Chapter Ten Growth, Immigration, and Multinationals 2003 South-Western/Thomson Learning Chapter Ten Outline 1. What if Factors Can Move? 2 What if Factors Can Move? Welfare analysis of factor movements
More informationWestern Balkans Countries In Focus Of Global Economic Crisis
Economy Transdisciplinarity Cognition www.ugb.ro/etc Vol. XIV, Issue 1/2011 176-186 Western Balkans Countries In Focus Of Global Economic Crisis ENGJELL PERE European University of Tirana engjell.pere@uet.edu.al
More informationGDP Per Capita. Constant 2000 US$
GDP Per Capita Constant 2000 US$ Country US$ Japan 38,609 United States 36,655 United Kingdom 26,363 Canada 24,688 Germany 23,705 France 23,432 Mexico 5,968 Russian Federation 2,286 China 1,323 India 538
More informationTRADE IN THE GLOBAL ECONOMY
TRADE IN THE GLOBAL ECONOMY Learning Objectives Understand basic terms and concepts as applied to international trade. Understand basic ideas of why countries trade. Understand basic facts for trade Understand
More informationGERMANY, JAPAN AND INTERNATIONAL PAYMENT IMBALANCES
Articles Articles Articles Articles Articles CENTRAL EUROPEAN REVIEW OF ECONOMICS & FINANCE Vol. 2, No. 1 (2012) pp. 5-18 Slawomir I. Bukowski* GERMANY, JAPAN AND INTERNATIONAL PAYMENT IMBALANCES Abstract
More informationInternational Trade Theory College of International Studies University of Tsukuba Hisahiro Naito
International Trade Theory College of International Studies University of Tsukuba Hisahiro Naito The specific factors model allows trade to affect income distribution as in H-O model. Assumptions of the
More informationPoverty Reduction and Economic Growth: The Asian Experience Peter Warr
Poverty Reduction and Economic Growth: The Asian Experience Peter Warr Abstract. The Asian experience of poverty reduction has varied widely. Over recent decades the economies of East and Southeast Asia
More informationGlobalization GLOBALIZATION REGIONAL TABLES. Introduction. Key Trends. Key Indicators for Asia and the Pacific 2009
GLOBALIZATION 217 Globalization The People s Republic of China (PRC) has by far the biggest share of merchandise exports in the region and has replaced Japan as the top exporter. The largest part of Asia
More informationGENDER EQUALITY IN THE LABOUR MARKET AND FOREIGN DIRECT INVESTMENT
THE STUDENT ECONOMIC REVIEWVOL. XXIX GENDER EQUALITY IN THE LABOUR MARKET AND FOREIGN DIRECT INVESTMENT CIÁN MC LEOD Senior Sophister With Southeast Asia attracting more foreign direct investment than
More informationGeneral Discussion: Cross-Border Macroeconomic Implications of Demographic Change
General Discussion: Cross-Border Macroeconomic Implications of Demographic Change Chair: Lawrence H. Summers Mr. Sinai: Not much attention has been paid so far to the demographics of immigration and its
More informationOne Belt and One Road and Free Trade Zones China s New Opening-up Initiatives 1
Front. Econ. China 2015, 10(4): 585 590 DOI 10.3868/s060-004-015-0026-0 OPINION ARTICLE Justin Yifu Lin One Belt and One Road and Free Trade Zones China s New Opening-up Initiatives 1 Abstract One Belt
More informationRELIGIOUS FREEDOM AND ECONOMIC PROSPERITY Ilan Alon and Gregory Chase
RELIGIOUS FREEDOM AND ECONOMIC PROSPERITY Ilan Alon and Gregory Chase Let there be no compulsion in religion. The Qu ran, Surah 2, verse 256 The basic notion that an individual s freedom to choose will
More informationPOLICY OPTIONS AND CHALLENGES FOR DEVELOPING ASIA PERSPECTIVES FROM THE IMF AND ASIA APRIL 19-20, 2007 TOKYO
POLICY OPTIONS AND CHALLENGES FOR DEVELOPING ASIA PERSPECTIVES FROM THE IMF AND ASIA APRIL 19-20, 2007 TOKYO RISING INEQUALITY AND POLARIZATION IN ASIA ERIK LUETH INTERNATIONAL MONETARY FUND Paper presented
More informationWhat has changed about the global economic structure
The A European insider surveys the scene. State of Globalization B Y J ÜRGEN S TARK THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY 888 16th Street, N.W. Suite 740 Washington, D.C. 20006 Phone: 202-861-0791
More informationDoes Korea Follow Japan in Foreign Aid? Relationships between Aid and FDI
Does Korea Follow Japan in Foreign Aid? Relationships between Aid and FDI Japan and the World Economy (Forthcoming) Sung Jin Kang, Korea Univ. Hongshik Lee, Korea Univ. Bokyeong Park, KIEP 1 Korea and
More informationSTATISTICS BRIEF URBAN PUBLIC TRANSPORT IN THE 21 ST CENTURY
STATISTICS BRIEF URBAN PUBLIC TRANSPORT IN THE 21 ST CENTURY This Statistics Brief is an abridged version of the extensive report, Urban Public Transport in the 21 st Century, available on the UITP MyLibrary
More informationCHAPTER 12: The Problem of Global Inequality
1. Self-interest is an important motive for countries who express concern that poverty may be linked to a rise in a. religious activity. b. environmental deterioration. c. terrorist events. d. capitalist
More informationEuropean Tourism Trends & Prospects Executive Summary
European Tourism Trends & Prospects Executive Summary European tourism growth in 2018 European tourism demand remained on solid footing with a 6% upswing in international tourist arrivals in 2018 over
More informationEconomic Globalization and Its Consequences
Economic Globalization and Its Consequences PROF. WERNER ANTWEILER Faculty of Commerce and Business Administration http://pacific.commerce.ubc.ca/antweiler/apsc450/ 1. Definition: What is Globalization?
More informationTrends in inequality worldwide (Gini coefficients)
Section 2 Impact of trade on income inequality As described above, it has been theoretically and empirically proved that the progress of globalization as represented by trade brings benefits in the form
More informationIf You Build It, Will They Come? Foreign Aid s Effects on Foreign Direct Investment
If You Build It, Will They Come? Foreign Aid s Effects on Foreign Direct Investment Steve Kapfer, Rich Nielsen, and Daniel Nielson Paper prepared for the 65 th MPSA National Conference 14 April 2007 Abstract
More informationCOMMERCIAL INTERESTS, POLITICAL INFLUENCE, AND THE ARMS TRADE
COMMERCIAL INTERESTS, POLITICAL INFLUENCE, AND THE ARMS TRADE Abstract Given the importance of the global defense trade to geopolitics, the global economy, and international relations at large, this paper
More informationPush and Pull Factors for Japanese Manufacturing Companies Moving Production Overseas
Push and Pull Factors for Japanese Manufacturing Companies Moving Production Overseas February 20, 2013 Tsunehiko Yanagihara Mitsubishi International Corporation/Washington Office OUTLINE 1. Hollowing-Out
More informationPOLI 12D: International Relations Sections 1, 6
POLI 12D: International Relations Sections 1, 6 Spring 2017 TA: Clara Suong Chapter 10 Development: Causes of the Wealth and Poverty of Nations The realities of contemporary economic development: Billions
More informationAreas for economic and financial cooperation in Sino-European relations Central Bank Roundtable Shanghai Forum, May 27, 2017
Areas for economic and financial cooperation in Sino-European relations Central Bank Roundtable Shanghai Forum, May 27, 2017 Peter Mooslechner Executive Director Oesterreichische Nationalbank, Vienna,
More informationREMITTANCE TRANSFERS TO ARMENIA: PRELIMINARY SURVEY DATA ANALYSIS
REMITTANCE TRANSFERS TO ARMENIA: PRELIMINARY SURVEY DATA ANALYSIS microreport# 117 SEPTEMBER 2008 This publication was produced for review by the United States Agency for International Development. It
More informationNeo-liberalism and the Asian Financial Crisis
Neo-liberalism and the Asian Financial Crisis Today s Agenda Review the families of Political Economy theories Back to Taiwan: Did Economic development lead to political changes? The Asian Financial Crisis
More informationINTERNATIONAL ECONOMICS, FINANCE AND TRADE Vol. II - Globalization and the Evolution of Trade - Pasquale M. Sgro
GLOBALIZATION AND THE EVOLUTION OF TRADE Pasquale M. School of Economics, Deakin University, Melbourne, Australia Keywords: Accountability, capital flow, certification, competition policy, core regions,
More informationEconomic Trends Across the Asia Pacific Region. Pansy Yau Deputy Director of Research
Economic Trends Across the Asia Pacific Region Pansy Yau Deputy Director of Research 2 Rebalancing of the World Economy % 70.00 65.00 60.00 55.00 50.00 45.00 40.00 35.00 Share of world total GDP (PPP)
More information11/7/2011. Section 1: Answering the Three Economic Questions. Section 2: The Free Market
Essential Question Chapter 6: Economic Systems Opener How does a society decide who gets what goods and services? Chapter 6, Opener Slide 2 Guiding Questions Section 1: Answering the Three Economic Questions
More informationSchool of International Education, UIBE. China in the Global Economy. Syllabus
School of International Education, UIBE China in the Global Economy Syllabus Instructor: Prof. Ding Dou, Economics Ph.D. E-mail: dingdou@vip.sina.com Office hour: Tel: (86)13520101540 Lecture hours: Venue:
More informationThe impacts of minimum wage policy in china
The impacts of minimum wage policy in china Mixed results for women, youth and migrants Li Shi and Carl Lin With support from: The chapter is submitted by guest contributors. Carl Lin is the Assistant
More informationREMITTANCE PRICES W O R L D W I D E
Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized REMITTANCE PRICES W O R L D W I D E PAYMENT SYSTEMS DEVELOPMENT GROUP FINANCIAL AND PRIVATE
More informationIt s Time to Begin An Adult Conversation on PISA. CTF Research and Information December 2013
It s Time to Begin An Adult Conversation on PISA CTF Research and Information December 2013 1 It s Time to Begin an Adult Conversation about PISA Myles Ellis, Acting Deputy Secretary General Another round
More informationA STATISTICAL MEASUREMENT OF HONG KONG S ECONOMIC IMPACT ON CHINA
Proceedings of ASBBS Volume 2 Number 1 A STATISTICAL MEASUREMENT OF HONG KONG S ECONOMIC IMPACT ON CHINA Mavrokordatos, Pete Tarrant County College/Intercollege Larnaca, Cyprus Stascinsky, Stan Tarrant
More informationMaster Thesis. Home-country determinants of outward FDI: Evidence from BRICS economies and five developed countries
Master Thesis Home-country determinants of outward FDI: Evidence from BRICS economies and five developed countries Msc International Financial Management Msc Business and Economics Faculty of Economics
More informationattract promising foreign enterprises with reference to the management strategies of individual companies, adopting a mindset similar to that of execu
Chapter 3 Promoting inward direct investment The expansion of inward direct investment will assist in improving productivity and creating employment in Japan, through inflows of management resources such
More informationIs Economic Development Good for Gender Equality? Income Growth and Poverty
Is Economic Development Good for Gender Equality? February 25 and 27, 2003 Income Growth and Poverty Evidence from many countries shows that while economic growth has not eliminated poverty, the share
More informationImpact of Japan s ODA Loan on Asian Economic Developments
Impact of Japan s ODA Loan on Asian Economic Developments Ken-ichi RIETI/MoFA, Japan June 2001 4th GTAP Annual Conference Table of Contents Japanese Official Development Assistance (ODA) Aid Philosophy
More information1 Introduction. The rise of China in the world economy
1 Introduction Let China sleep, for when she wakes she will shake the world. Napoleon Bonaparte Some 2 years after Napoleon Bonaparte, the brilliant general who became emperor of France, made the above
More informationDeterminants of Intra-Industry Trade between Zimbabwe and its Trading Partners in the Southern African Development Community Region ( )
Journal of Social Sciences 5(1): 16-21, 2009 ISSN 1549-3652 2009 Science Publications Determinants of Intra-Industry Trade between Zimbabwe and its Trading Partners in the Southern African Development
More informationThe Asian Development Bank. Transportation Infrastructure in Asia and the Pacific
The Transportation Infrastructure in Asia and the Pacific NCSL Legislative Summit July 22-26, 2008 New Orleans, Louisiana Transportation Committee North American Representative Office (ADB) July 2008 1
More informationRemittances and the Brain Drain: Evidence from Microdata for Sub-Saharan Africa
Remittances and the Brain Drain: Evidence from Microdata for Sub-Saharan Africa Julia Bredtmann 1, Fernanda Martinez Flores 1,2, and Sebastian Otten 1,2,3 1 RWI, Rheinisch-Westfälisches Institut für Wirtschaftsforschung
More informationSurvey on International Operations of Japanese Firms (FY2007)
on International Operations of Japanese Firms () March 26 (JETRO) Contents I. outline; profile of respondent firms 3 China now the top site for overseas R&D bases 4 5 (1) More plan overseas than domestic
More informationAn Overview of the Chinese Economy Foundation Part: Macro-economy of the Mainland
Core Module 15 An Overview of the Chinese Economy Foundation Part: Macro-economy of the Mainland The Chinese economy has been growing rapidly for years. Has it reached the level of the developed countries?
More informationSPECIAL REPORT ECONOMIC RESEARCH. Chinese Outbound Tourism Resembling Japan in the 1980s?
ECONOMIC RESEARCH March 3th, 16 Alicia Garcia Herrero, (8) 39-868, alicia.garcia-herrero@ap.natixis.com Kohei Iwahara, (81) 3-79-1, kohei.iwahara@ap.natixis.com Chinese Outbound Tourism Resembling Japan
More informationEconomic Development: Miracle, Crisis and Regionalism
Economic Development: Miracle, Crisis and Regionalism Min Shu School of International Liberal Studies Waseda University 18 Dec 2017 IR of Southeast Asia 1 Outline of the Lecture Southeast Asian economies
More informationFOREIGN TRADE DEPENDENCE AND INTERDEPENDENCE: AN INFLUENCE ON THE RESILIENCE OF THE NATIONAL ECONOMY
FOREIGN TRADE DEPENDENCE AND INTERDEPENDENCE: AN INFLUENCE ON THE RESILIENCE OF THE NATIONAL ECONOMY Alina BOYKO ABSTRACT Globalization leads to a convergence of the regulation mechanisms of economic relations
More informationVENEZUELA: Oil, Inflation and Prospects for Long-Term Growth
VENEZUELA: Oil, Inflation and Prospects for Long-Term Growth Melody Chen and Maggie Gebhard 9 April 2007 BACKGROUND The economic history of Venezuela is unique not only among its neighbors, but also among
More informationGLOBALIZATION S CHALLENGES FOR THE DEVELOPED COUNTRIES
GLOBALIZATION S CHALLENGES FOR THE DEVELOPED COUNTRIES Shreekant G. Joag St. John s University New York INTRODUCTION By the end of the World War II, US and Europe, having experienced the disastrous consequences
More informationEnglish Australia. Survey of major ELICOS regional markets in 2014
English Australia Survey of major ELICOS regional markets in 2014 May 2015 Executive Summary of a report prepared for English Australia by Environmetrics May 2015 English Australia contact: Sue Blundell
More informationGrowth and Migration to a Third Country: The Case of Korean Migrants in Latin America
JOURNAL OF INTERNATIONAL AND AREA STUDIES Volume 23, Number 2, 2016, pp.77-87 77 Growth and Migration to a Third Country: The Case of Korean Migrants in Latin America Chong-Sup Kim and Eunsuk Lee* This
More informationPOS 335 Andreas Syz February 17, 2004
Multinational Corporations (MNCs), International Investment and Trade POS 335 Andreas Syz February 17, 2004 Multinational Corporations MNCs are networks of firms, linked together by ties of ownership and
More informationHonors General Exam Part 1: Microeconomics (33 points) Harvard University
Honors General Exam Part 1: Microeconomics (33 points) Harvard University April 9, 2014 QUESTION 1. (6 points) The inverse demand function for apples is defined by the equation p = 214 5q, where q is the
More informationIntervista a Piyanuj Ratprasatporn,
Intervista a Piyanuj Ratprasatporn, Partner and Director of the Corporate and Commercial Department of Tilleke & Gibbins Contributors: Anake Rattanajitbanjong, Attorney-at-Law and Michael C. Yukubousky,
More informationHigh Level Forum Globalization and Global Crisis: The Role of Official Statistics Monday, 23 February 2009 ECOSOC Chamber 3:00-6:00 pm
High Level Forum Globalization and Global Crisis: The Role of Official Statistics Monday, 23 February 2009 ECOSOC Chamber 3:00-6:00 pm UN High-Level Forum on Globalization and Global Crisis: The Role of
More informationWorld Bank Employment Policy Primer March 2008 No. 9
Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized World Bank Employment Policy Primer March 2008 No. 9 THE EFFECTS OF GLOBALIZATION ON
More informationInternational Business & Economics Research Journal September 2009 Volume 8, Number 9
The Demand For Tourism: Japanese Visitors In The United States Akinori Tomohara, University of California, Los Angeles, USA Molly Sherlock, Skidmore College, USA ABSTRACT This paper uses the supply-and-demand
More informationIncome Distributions and the Relative Representation of Rich and Poor Citizens
Income Distributions and the Relative Representation of Rich and Poor Citizens Eric Guntermann Mikael Persson University of Gothenburg April 1, 2017 Abstract In this paper, we consider the impact of the
More informationAsianBondsOnline WEEKLY DEBT HIGHLIGHTS
AsianBondsOnline WEEKLY November 6 Key Developments in Asian Local Currency Markets Japan s real gross domestic product (GDP) growth accelerated to.% quarter-on-quarter in the third quarter (Q) of 6 from.%
More informationPRIVATE CAPITAL FLOWS RETURN TO A FEW DEVELOPING COUNTRIES AS AID FLOWS TO POOREST RISE ONLY SLIGHTLY
The World Bank News Release No. 2004/284/S Contacts: Christopher Neal (202) 473-7229 Cneal1@worldbank.org Karina Manaseh (202) 473-1729 Kmanasseh@worldbank.org TV/Radio: Cynthia Case (202) 473-2243 Ccase@worldbank.org
More informationGDP per capita was lowest in the Czech Republic and the Republic of Korea. For more details, see page 3.
International Comparisons of GDP per Capita and per Hour, 1960 9 Division of International Labor Comparisons October 21, 2010 Table of Contents Introduction.2 Charts...3 Tables...9 Technical Notes.. 18
More informationSupplementary Material for Preventing Civil War: How the potential for international intervention can deter conflict onset.
Supplementary Material for Preventing Civil War: How the potential for international intervention can deter conflict onset. World Politics, vol. 68, no. 2, April 2016.* David E. Cunningham University of
More informationSome Thoughts on the Development of the Tianjin Binhai New Area
Some Thoughts on the Development of the Tianjin Binhai New Area Lawrence J. Lau, Ph. D., D. Soc. Sc. (hon.) Vice-Chancellor, The Chinese University of Hong Kong and Kwoh-Ting Li Professor of Economic Development,
More information