Foreign Infrastructure Investment in Developing Countries: A Dynamic Panel Data Model of Political Risk Impacts

Jiang, Weiling; Martek, Igor; Hosseini, M. Reza; Tamošaitienė, Jolanta; Chen, Chuan

doi:10.3846/tede.2019.7632

Cited by 16 publications

(20 citation statements)

References 87 publications

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“…Unbiased berarti nilai rata-rata dari estimator sampel E(β ̂ ) sama dengan nilai sebenarnya β. Pembuktian masalah CLRM dan BLUE dapat menggunakan uji asumsi klasik. Uji asumsi klasik terdiri dari uji multikolinieritas, uji heteroskedastisitas, dan uji autokorelasi (Jiang et al, 2019).…”

Section: Metode Penelitianunclassified

Analisis Pengaruh Tenaga Kerja dan Pengeluaran Pemerintah (Infrastruktur) terhadap Investasi di Indonesia

Noviani¹,

Istifadah²

2020

Mediatrend

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This study aims to determine how the influence of labor and government spending on investment in Indonesia. The type of research used is quantitative with secondary data, using the OLS (Ordinary Least Square) analysis method in order to see the effect of the independent variable, namely investment with the dependent variable on labor and government spending. The results show that the variable labor and government have a significant effect on a significant investment. The estimation results of the variables of labor and government expenditure are significant and have a positive impact on investment in Indonesia. Estimated results for government expenditure variables have a significant and positive impact on investment that will affect economic growth in Indonesia.

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Section: Metode Penelitianunclassified

Analisis Pengaruh Tenaga Kerja dan Pengeluaran Pemerintah (Infrastruktur) terhadap Investasi di Indonesia

Noviani¹,

Istifadah²

2020

Mediatrend

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“…Infrastructure has been characterized by a longer maturity period, fixed and low (but positive) returns, long sunk costs, political salience, high-risk portfolios, long gestation periods, illiquid returns, high capital outlays, uncertain valuations due to taxation, pricing rules, complex nature and involvement of government and the public as clients (Ramamurti and Doh, 2004; Kumari and Kumar Sharma, 2017). These infrastructure characteristics make it more sensitive to political risk (Ramamurti and Doh, 2004; Jiang et al , 2019).…”

Section: Theoretical Conceptsmentioning

confidence: 99%

“…Given by these characteristics, FDII in developing countries would be faced with higher political risk (Jiang et al , 2019). Therefore, effectively managing the political risk of FDII in developing countries becomes important for both academics and practitioners in the FDII industry, which can help government to attract more FDI flows into their own countries, and also assist investors with mitigating political risk in host countries.…”

Section: Theoretical Conceptsmentioning

confidence: 99%

“…If government is to attract foreign investment, it is incumbent to offer effective strategies and mechanisms for political risk management (PRM) (Jakobsen, 2010). While there exists a large body of research on PRM in international business, specifically in FDI generally and in international market entry mode (Deng, Pheng and Zhao, 2014), the literature with regard to PRM in FDII, in developing counties, is relatively limited and unmapped (Jiang et al , 2019).…”

Section: Introductionmentioning

confidence: 99%

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Political risk management of foreign direct investment in infrastructure projects

Jiang

Martek

Hosseini

et al. 2019

ECAM

Self Cite

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Purpose Foreign direct investment in the infrastructure (FDII) of developing countries has a history of at least four decades. Bullish demand for foreign infrastructure services in developing countries, in combination with unstable political environments, has buoyed attention in political risk management (PRM). Even so, research into PRM of FDII remains fragmented and unmapped. Thus, the purpose of this paper is to identify the current body of knowledge in this area, uncover deficiencies and lay the foundation for further practical PRM research in FDII. Design/methodology/approach This paper offers a bibliometric-qualitative review of current literature on political risk in foreign infrastructure in developing countries. A 36-year period is identified, from 1983 to 2018. Publication year, area of focus, author(s), institution and country are classified and analyzed through the medium of social network analysis. The tools used are VOSviewer, CiteSpace and Gephi to analyze citation networks of 345 published papers. Out of 345 papers, 94 highly related studies were selected for further content analysis. Findings The study identified the research trends in related areas of PRM in infrastructure (e.g. PRM in international construction and foreign direct investment) by bibliometric analysis, which includes scattered researcher collaboration, wide-ranging and unfocused journal selection, unsystematic and discontinuous research themes. The specific research weakness in PRM in FDII is recognized by qualitative analysis from the perspective of PRM process, which reveals a lack of understanding of the impact of political risk factors, subjective risk estimations, lacking application of mature political risk database in FDII, combined with a shortage of complete and effective strategies for PRM in FDII in developing countries. Originality/value This paper is the first of its kind, providing a comprehensive benchmark survey of the research to date in PRM in foreign infrastructure investment in developing countries. It proposes a framework of future research agenda on PRM in FDII, including special issues on this topic, identification and assessment of political risk factors with objective methods, proposition of PRM strategies on FDII with proactive and active approaches, completing strategies of PRM with reactive strategies from the perspectives of whole life cycle of infrastructure projects, political risk factors and stakeholders. It also addressed the need to investigate the suitable literature databases for researching in this area.

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“…Empirical research on the FDI, economic growth and productivity nexus is also inconclusive. FDI's role is often found to be conditioned on additional factors like the abovementioned absorptive capacity (see, e.g., Durham, 2004;Alfaro et al, 2009;Azman et al, 2010;Wach & Wojciechowski, 2016a, 2016bOrlic et al, 2018;Li & Tanna, 2019), or even political risk assessment (Jiang et al, 2019). In general, one can distinguish two "channels" through which FDI can affect growth: (i) a direct one via accumulation of input factors (e.g., investments which lead to domestic capital formation; see, e.g., Mallick & Moore, 2008) and (ii) an indirect one via total factor productivity (TFP) growth (increased productivity, new technologies, know-how, etc.).…”

Section: Introductionmentioning

confidence: 99%

Effectiveness of Fdi, Technological Gap and Sectoral Level Productivity in the Visegrad Group

Makieła

Wojciechowski

Wach

2020

Technological and Economic Development of Economy

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The objective of this paper is to investigate the impact of foreign direct investment (FDI) on economic growth and productivity in sectors of the Visegrad Group one decade after their accession to the EU. In order to account for sample heterogeneity, as well as productivity differences, we construct a generalized true random-effects model with varying efficiency distribution. We find that FDI has a positive impact on the Visegrad Group’s sectors and that its effectiveness depends upon the technological gap between the host and home economy. There are three sources of this positive impact: (i) sectoral output and labour productivity growth, (ii) more effective use of input factors, and via (iii) higher efficiency component of the total factor productivity (TFP). These sources form a three-way transmission mechanism through which FDI can impact economic growth conditioned upon FDI effectiveness due to the technological gap.

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Foreign Infrastructure Investment in Developing Countries: A Dynamic Panel Data Model of Political Risk Impacts

Cited by 16 publications

References 87 publications

Analisis Pengaruh Tenaga Kerja dan Pengeluaran Pemerintah (Infrastruktur) terhadap Investasi di Indonesia

Analisis Pengaruh Tenaga Kerja dan Pengeluaran Pemerintah (Infrastruktur) terhadap Investasi di Indonesia

Political risk management of foreign direct investment in infrastructure projects

Effectiveness of Fdi, Technological Gap and Sectoral Level Productivity in the Visegrad Group

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