FDI according to ultimate versus immediate investor countries: which dataset performs better?

Fertő, Imre; Sass, Magdolna

doi:10.1080/13504851.2019.1659925

Cited by 5 publications

(2 citation statements)

References 9 publications

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“…The introduction of the OECD BMD4 data brought new insights into the FDI literature. The new OECD dataset gives better results when analysing main FDI drivers (distance, relative country size and trade costs; Fertő & Sass, 2020 ). It shows huge discrepancies between FDI linkages reported by countries and ‘true’ FDI linkages (Dellis et al, 2020 ; Saprikina et al, 2020 ; Szunomár, 2020 ).…”

Section: Literature Reviewmentioning

confidence: 99%

Tax effects on foreign direct investment—Just a rerouting

Erokhin

2023

World Economy

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This paper investigates tax‐related determinants of indirect foreign direct investment (FDI). In particular, it studies the effects of bilateral effective average tax rates, the strength of anti‐tax avoidance rules in host countries and tax haven status of home countries on the volume of indirect FDI host countries receive. The paper uses the fourth edition of the OECD Benchmark Definition of Foreign Direct Investment (BMD4) database, which distinguishes between ultimate and immediate FDI. Methodologically, the paper relies on the standard gravity equation for FDI and applies the Poisson pseudo‐maximum likelihood estimation model. The paper shows that ultimate FDI is not influenced by tax‐related factors but only real economic determinants, whereas tax rates affect immediate FDI. This finding suggests that previous research may have overestimated the tax elasticity of FDI, and taxes do not have an impact on location decisions of FDI, but rather the route of investing—direct or indirect. The paper defines indirect FDI as the difference between ultimate and immediate FDI and finds that high bilateral effective average tax rates encourage indirect FDI. The finding is robust under different specifications.

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Section: Literature Reviewmentioning

confidence: 99%

Tax effects on foreign direct investment—Just a rerouting

Erokhin

2023

World Economy

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“…However, foreign companies must struggle to understand the context of the local market (Singh, 2012). Hence, some authors propose the existence of a psychic distance effect, that foreign companies are more likely to invest successfully in a more culturally closer country (Evans, Mavondo, & Bridson, 2008;Fertő & Sass, 2020;Vaccarini, 2015). From the perspective of N-OLI, the theory of psychic distance could be explained as the desire of foreign companies to gain location advantage that they naturally did not have.…”

Section: Literature Reviewmentioning

confidence: 99%

Foreign Direct Investment and the Performance of Indonesian Marketplace E-Commerce Corporation: An Application of Network, Ownership, Location and Internalisation Framework

Kaukab

Aryanto

2020

Malaysian Management Journal

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Data on real-time marketing performance from micro, small and medium enterprises (MSMEs) selling their products in marketplace e-commerce corporations (MECCs) is a big challenge for researchers studying the performance of MECCs capital structure. This article explores the use of Google Trends to determine the impact of Foreign Direct Investment (FDI) on MECCs’ performance. The findings of the trend analysis are explained using the N-OLI framework. It is found that there was a sharp trend decrease in MECCs with partial FDI (Tokopedia and Bukalapak) and full domestic investment (Blibli).On the other hand, there was a sharp increase in MECCs full FDI (Shopee). Other MECCs with full FDI, namely Lazada, has experienced a decrease but it is not as consistent as that of partial FDI. An increase trend in Shopee has negative correlation with a decline trend in Bukalapak. However, after being grouped, partial FDI has a significantly higher mean score compared to full FDI, and MECCs without FDI has the lowest mean score. This finding shows that in the case of Indonesia, FDI plays a role in encouraging the success of MSMEs, especially in MECCs, which have a combination of FDI and domestic investment.

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Decision making framework for foreign direct investment: Analytic hierarchy process and weighted aggregated sum product assessment integrated approach

Gupta

Jha

Singh

2021

Journal of Public Affairs

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Foreign direct investment (FDI) plays a paramount role in economic and social growth of every country. FDI acts as a source of external capital and helps in economic growth of the host country. Making decision for FDI during uncertain business environment is a challenge for all stakeholders. Therefore, in this study, we are proposing a decision making framework for FDI. Through literature review, we have identified the factors, on which FDI depends. A process‐based, multi‐criterion, integrated hierarchical approach for deciding about FDI, has been illustrated. In this study, five sectors are considered, that is, petroleum and natural resource, retailing and e‐commerce, healthcare, information technology, and road and highways for illustrating the proposed framework. It is observed that information technology sector has got top priority for FDI followed by retailing and e‐commerce and health care sector. Findings will help in taking appropriate decision by stakeholders for FDI. Ultimately it will also help in creating employment, economic growth, and welfare of society at large in the host country.

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FDI according to ultimate versus immediate investor countries: which dataset performs better?

Cited by 5 publications

References 9 publications

Tax effects on foreign direct investment—Just a rerouting

Tax effects on foreign direct investment—Just a rerouting

Foreign Direct Investment and the Performance of Indonesian Marketplace E-Commerce Corporation: An Application of Network, Ownership, Location and Internalisation Framework

Decision making framework for foreign direct investment: Analytic hierarchy process and weighted aggregated sum product assessment integrated approach

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