Foreign Direct Investments and Economic Development

A special issue of Economies (ISSN 2227-7099).

Deadline for manuscript submissions: closed (8 August 2024) | Viewed by 13108

Special Issue Editor


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Guest Editor
Department of Business and Law, University of Milano-Bicocca, Milan, Italy
Interests: international economics; foreign direct investments; spillovers; global production networks; multinational enterprises (MNEs)

Special Issue Information

Dear Colleagues,

FDIs are a significant catalyst for development and growth. However, their benefits do not accrue automatically and evenly across sectors and over space because of the role of national and international policy instruments in enhancing FDI flows and ensuring the reaping of the full benefits of FDI for development. The challenges impact both the host countries, which need to establish a transparent and effective economic and institutional environment for FDI, and the home countries, which can facilitate emerging and less developed countries’ and regions’ access to international markets and technology through the participation in global value chains.

This Special Issue aims to provide an overview of the current knowledge about the FDI and development nexus from different perspectives. Some of the topics that this Special Issue might address include, but are not limited to, the contribution of FDI to economic growth and development; FDI and the SDGs; FDI and technology and knowledge diffusion; spillovers; FDI promotion policies; investment liberation policies; and GVCs and development.

Dr. Laura Resmini
Guest Editor

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Keywords

  • foreign direct investment and sustainable development
  • FDI and growth nexus
  • spillovers effects
  • MNEs and global value chains
  • MNEs and the ESGs
  • MNEs and SDGs
  • MNEs and CSR
  • MNEs and human rights
  • FDI promotion policies
  • international agreements and FDI
  • MNEs from emerging countries

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Published Papers (3 papers)

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Research

23 pages, 1666 KiB  
Article
Do Free Trade Agreements Facilitate FDI Spillover Effects on Domestic Firms? Empirical Evidence from Oman
by Ashraf Mishrif and Asharul Khan
Economies 2024, 12(6), 141; https://doi.org/10.3390/economies12060141 - 6 Jun 2024
Cited by 1 | Viewed by 1778
Abstract
This paper underlines the significance of free trade agreements in attracting foreign direct investment and their impact on the operational capacities of local firms in host countries. It argues that free trade agreements do not only eliminate barriers to trade, but they also [...] Read more.
This paper underlines the significance of free trade agreements in attracting foreign direct investment and their impact on the operational capacities of local firms in host countries. It argues that free trade agreements do not only eliminate barriers to trade, but they also increase the size of the regional market and improve the business environment, making it more attractive to foreign direct investment, along with all the attributes and spillover effects associated with it. While determining the type of spillover effects of foreign direct investment associated with Oman’s trade agreements, this paper uses the Kruskal–Wallis H-test and 438 samples from companies surveyed between 1 August and 31 October 2023 to assess the impact of spillovers on the performance of the surveyed companies. The results reveal that technology transfer, knowledge transfer, labour productivity, product efficiency, capital investments, and job creation have positive effects on the firms’ operational capacities, with technology transfer having the highest impact (27%), followed by labour productivity and job creation (18%). The spillover effects are almost the same for company size and percentage of ownership. They also identified manufacturing and tourism as priority sectors and the availability of a skilled workforce as a major challenge. These findings make original contribution to the field as this is probably the first study to produce a firm-level analysis of spillover effects of foreign direct investment and trade agreements in the context of Oman and the wider Gulf region. The paper concludes with practical implications for policy makers when negotiating trade agreements and designing investment policies to optimize spillover effects on the performance of their domestic firms. Full article
(This article belongs to the Special Issue Foreign Direct Investments and Economic Development)
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16 pages, 278 KiB  
Article
Does Chinese Investment into Europe Facilitate Strategic Asset Growth in the Chinese Parent Company? The Role of Entry Mode
by John Anderson, Dylan Sutherland and Sean Severe
Economies 2024, 12(3), 56; https://doi.org/10.3390/economies12030056 - 25 Feb 2024
Viewed by 1893
Abstract
Strategic asset seeking foreign direct investment has undergone tremendous growth over the past decade. This paper first attempts to evaluate the location choice of such investments in Europe. We find that Chinese companies target strategic assets in Europe. The paper then moves to [...] Read more.
Strategic asset seeking foreign direct investment has undergone tremendous growth over the past decade. This paper first attempts to evaluate the location choice of such investments in Europe. We find that Chinese companies target strategic assets in Europe. The paper then moves to understand the efficacy of these investments in terms of the creation of strategic assets in the Chinese parent company. Our results show the intangible assets of Chinese domestic parent firms significantly increase in the wake of their investments. For greenfield investments, there is a longer time-lag in creation of intangible strategic assets than for acquisitions. However, greenfield investments result in a larger increase in intangible asset creation than acquisition investments. Full article
(This article belongs to the Special Issue Foreign Direct Investments and Economic Development)
15 pages, 588 KiB  
Article
How Does Foreign Direct Investment Drive Employment Growth in Vietnam’s Formal Economy?
by Thi Bich Thuy Dao, Van Quy Khuc, Manh Cuong Dong and Thuy Linh Cao
Economies 2023, 11(11), 266; https://doi.org/10.3390/economies11110266 - 26 Oct 2023
Cited by 3 | Viewed by 8697
Abstract
Over the last three decades, Vietnam has undergone economic reforms and achieved rapid economic growth. However, the country is still facing numerous challenges linked to a relatively high share of employment in an informal economic sector, which could prevent Vietnam from escaping from [...] Read more.
Over the last three decades, Vietnam has undergone economic reforms and achieved rapid economic growth. However, the country is still facing numerous challenges linked to a relatively high share of employment in an informal economic sector, which could prevent Vietnam from escaping from the middle-income trap and becoming a high-income country. This research explores the effect of foreign direct investment (FDI) on job creation in the formal economic sector of Vietnam. A subnational dataset of 63 cities/provinces from 2006 to 2020 was analyzed using an instrumental variable two-stage least-squares fixed-effect model. The results show that FDI is an employment growth-enhancing factor in the formal economic sector. Specifically, FDI enterprises are found to be more capable than domestic enterprises in creating employment, and there is a positive employment spillover from the foreign to the domestic sector, although the magnitude of the effect remains small. Apart from FDI, firm agglomeration, capital resource productivity, and government support for sector development spur employment growth. Labor quality, profitability and foreign industrial agglomeration are identified to be determinants of FDI. Furthermore, the impact mechanism of FDI on the formal sector’s employment is further discussed using mindspongeconomics, the SM3D knowledge management system, and the culture tower. Full article
(This article belongs to the Special Issue Foreign Direct Investments and Economic Development)
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