Explaining Japanese direct investment flows into an enlarged Europe: A comparison of gravity and economic potential approaches

Cieślik, Andrzej; Ryan, Michael J.

doi:10.1016/j.jjie.2003.09.009

Cited by 46 publications

(32 citation statements)

References 30 publications

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“…On the one side, there is the so-called OLI approach based on Dunning (1993Dunning ( , 2001) theory according to which fi rms invest directly abroad to gain access to resources, markets, and make effi ciency gains. On the other side, there is the gravitational approach that, despite its limited theoretical foundations (Oguledo and MacPhee, 1994), has proved to be an effi cient tool for bilateral trade fl ow analysis, extended to foreign direct investments (Bergstrand, 1989;Resmini, 1999;Brenton, Di Mauro and Lücke, 1999;Altomonte, 2000;Cieślik and Ryan, 2004). Its application to foreign direct investments is implicit: if the countries are far from each other, then it is more convenient to produce abroad than to export, since the greater the distance the higher the transport costs.…”

Section: The Fdi Determinantsmentioning

confidence: 99%

New Evidence on FDI Determinants: An Appraisal Over the Transition Period

Gorbunova¹,

Infante

Smirnova³

2012

Prague Economic Papers

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Abstract:The aim of this work is to provide new evidence on the factors that determine the fl ow of FDI among transition countries. The analysis takes into consideration the period of most intense transition and post-transition (1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002) of 26 former socialist countries. The empirical estimates enable us to draw two main conclusions: fi rst classical locational FDI factors maintain their role in the context of transition countries, and, second, that FDI are infl uenced by specifi c market and institutional factors. Among market variables, relatively higher labour costs surprisingly do not constitute an obstacle for foreign investment. We fi nd that variables refl ecting market stabilising institutions play a more important role than those representing market creating institutions. Although, there is a certain tolerance of foreign investors towards weak institutional environment, we demonstrate that, to attract FDI, countries should reinforce their macroeconomic stability by focusing on market stabilising institutions.

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Section: The Fdi Determinantsmentioning

confidence: 99%

New Evidence on FDI Determinants: An Appraisal Over the Transition Period

Gorbunova¹,

Infante

Smirnova³

2012

Prague Economic Papers

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“…Initially, empirical studies for those countries were conducted treating all the countries in the whole region jointly. Examples of such studies include Lansbury et al (1996), Brenton et al (1999), Benacek et al (2000), Resmini (2000), Garibaldi et al (2001), Bevan and Estrin (2004), Carstensen and Toubal (2004), Cieślik and Ryan (2004), Baniak et al (2005), Gorbunova et al (2012), and most recently also Wach and Wojciechowski (2016). Subsequently, studies for individual CEECs started to appear.…”

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confidence: 99%

Determinants of MNE Activity in Poland: The Case of Firms from EU-15

Cieślik

2017

EBER

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A B S T R A C T Objective:The main purpose of this paper is to validate empirically the theoretical predictions of the modified knowledge capital model of multinational enterprise and identify the main reasons for undertaking international production in Poland by foreign firms from the EU-15 countries. Research Design & Methods: Our theoretical framework refers to the physical capital augmented knowledge capital model that combines both horizontal and vertical reasons for foreign direct investment. The empirical implementation of the theoretical framework is based on the negative binomial model and the bilateral dataset covering 15 old EU member states over the period 1989-2014 which yields a total of 390 observations. Findings: Our estimation results indicate that the extent of multinational activity in Poland is positively related to both differences in relative factor endowments and similarity in the relative country size which confirms the importance of both reasons for undertaking foreign direct investment in Poland. Implications & Recommendations:The empirical evidence confirms the predictions of the modified knowledge capital model and points to the horizontal as well as vertical motives for undertaking foreign direct investment in Poland. These findings suggest that government should not try to attract only one type of FDI. Contribution & Value Added: The originality of this work lies in the empirical implementation of the theoretical framework that allows distinguishing between horizontal and vertical reasons for foreign direct investment. Article type: research paper

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“…Authors have also linked FDI flow with risk level, particularly political risk. (Cieslik & Ryan, 2004) and Blonigen (2005) show that high political risk level tends to decrease FDI flows. Blonigen (2005) also shows that proper government institutions and appropriate legal protection (such as protection of intellectual property rights) are very important tools to promote FDI.…”

Section: Empirical Evidencementioning

confidence: 99%

Tax Policy and Foreign Direct Investment: Empirical Evidence from Mauritius

Digumber¹,

Soondram²,

Jugurnath³

2017

IBR

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This study demonstrates, through the use both qualitative and quantitative data, that there are several factors determining Foreign Direct Investment flows between two countries. A total of 180 accountants were surveyed in this study, whereby the majority of respondents agreed that Capital Gains Tax is an important factor determining FDI flow within a tax treaty but is not the only significant factor. The study also used regression analysis through a gravity equation to confirm the survey"s conclusion. Using Mauritius and a host of its tax treaty partners as proxies, it was found that Gross Domestic Product per capita, Capital Gains Tax, common language and distance were major factors affecting Foreign Direct Investment flow in a bilateral tax treaty. This study gives a good insight on the reasons why foreign investors use the Mauritian tax treaty network as a platform for investment. The main rationale for such investments was attributed to Mauritius offering a 0% Capital Gains Tax rate and being a low tax jurisdiction. However, this study sheds new light on this reasoning and provides evidence that investment does not depend solely on Capital Gains Tax levy but also a host of other important factors.

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Explaining Japanese direct investment flows into an enlarged Europe: A comparison of gravity and economic potential approaches

Cited by 46 publications

References 30 publications

New Evidence on FDI Determinants: An Appraisal Over the Transition Period

New Evidence on FDI Determinants: An Appraisal Over the Transition Period

Determinants of MNE Activity in Poland: The Case of Firms from EU-15

Tax Policy and Foreign Direct Investment: Empirical Evidence from Mauritius

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