Determinants of FDI in ASEAN Countries
Outward Foreign Direct Investment (OFDI) has been utilized by developed economies to enter developing markets for competitive advantages. However, recent boom in OFDI from emerging economies has prompted the question as to why these economies are investing abroad? A modest amount of literature exists regarding China and India, however, Turkey being an emerging economy has been largely untapped when it comes to determinants of OFDI. This study uses the Global Competitiveness Index (GCI) to find host and home country factors which have led to OFDI from Turkey to their top 10 investment destinations for the past 10 years. The host country factors found to be significantly correlated with Turkish OFDI are innovation (Netherlands and Russia), technological readiness (Russia and UK), labor market efficiency (Netherlands), infrastructure (Netherlands), domestic market size (Germany), and exports (UK). The home factors found to be significantly correlated with Turkish OFDI are infrastructure and domestic competition.
Direct foreign investment plays an important role in the world economy. Between the countries there is a huge competition for their involvement as they positively affect the economy of a recipient country. In addition to the direct effects, such as GDP growth, budget revenues, reducing unemployment, direct foreign investment positively impacts a host country indirectly in the form of new knowledge, transfer of experience, technology propagation, etc. The aim of the study is to identify and assess factors (determinants) that affect the inflow of direct foreign investment into the regions of the Russian Federation. The paper examines factors that have a significant impact on the volume of direct foreign investment according to the results of previous studies by other authors. The hypotheses of the research are the following assumptions: 1) the choice of a region for investment is influenced by the quality of the infrastructure, including transport infrastructure; 2) the volume of direct foreign investment is influenced by the state of institutions, the "quality" of civil society, the culture of the population; 4) the level of unemployment in the region influences the flows of direct foreign investment; 4) the potential investor considers the geographic characteristics of the region. For the verification of the hypotheses, an economic-mathematical model with fixed effects has been used. At the same time, such factors as availability of natural resources and extraction of minerals have not been considered while modeling the direct foreign investment inflows due to the lack of statistical data. The results of econometric modeling have revealed the presence of a statistically significant positive relationship between the inflow of direct foreign investment and the following indicators chosen to verify the hypotheses: the density of public roads with hard coating; the number of crimes registered by law enforcement agencies during a year per 100 thousand people in a region; the number of museum visits per 1000 population; availability of a port in a region. In addition to the control parameters, the research has revealed other determinants that significantly affect the volume of direct foreign investment in the regions of the Russian Federation. They are market size, urbanization level, and the proportion of unprofitable enterprises in the regions. The research is based on social, economic, political, civil, environmental and other development indicators of 80 subjects of the Russian
Federation for 2000–2016. The obtained data and results will be useful for the regional authorities in order to develop and improve investment policy for a significant increase in direct foreign investment inflows.
The aim of this research is to examine the reasons of the level of FDI inflow differences among countries and try to understand why some countries are more attractive for investors. The research used a dataset of 103 countries for due to data availability and created a FDI Inflow Index for 2016. Principal Components Analysis was used to analyze and construct the FDI Index. The results show that even there are substantial improvements in the conditions of developing economies for higher FDI levels, still, the macroeconomic conditions, business and legal environment and agglomeration effects are better situated in developed economies which make them more attractive for investors.
This article presents a study of the dynamics of the distribution of Chinese direct investment in high-tech industries within the EU. The influence of Chinese FDI on the EU regulatory policy and the specifics of bilateral relations between the PRC and the EU member states in the field of high technologies was also studied. In addition, the paper presents a brief forecast of the development of investment relations between the EU and the PRC. Based on data from the China Global Investment Tracker, the article analyzes the dynamics of Chinese investment flows to the EU in the time interval from 2005 to 2019. The distribution of Chinese investments by EU member states and sectors of national economies before and after the creation and implementation of China's strategy of economic development "One Belt - One Road". Using a structured semi-formalized online survey of employees of high-tech companies located in the EU, the paper describes the specifics of cooperation with Chinese investors, the personal attitude of survey participants to the growth of Chinese investment capital in the EU and the respondents' opinion on the prospects for the development of investment relations between the EU and PRC. Based on the results of the empirical analysis, the following conclusions were formed: China seeks to increase the export of capital to the EU, especially in the high-tech and infrastructure sectors. The EU's strategic response is to develop common regulatory rules. However, the countries of Central and Eastern Europe are interested in increasing Chinese investment inflows much more than their western neighbors, than they are increasing differentiation within the integration union. In addition, the implementation of the "One Belt - One Road" program in recent years has strengthened the positions of such southern European states as Italy, Greece, Portugal, as global information technology and infrastructure hubs within the framework of China-EU investment relations. At the same time, the consequences of Brexit, the global pandemic and the growth of protectionist sentiments of the EU leadership towards Chinese FDI will certainly have a negative impact on the volume of investment flows from China to the EU in the short term.