Foreign Direct Investment and International Trade

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: closed (15 January 2023) | Viewed by 9139

Special Issue Editor

School of Economics and Management, University of Porto, 4200-464 Porto, Portugal
Interests: determinants of exports; foreign direct investment; outsourcing (subcontracting); impacts of firms’ international involvement
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

This Special Issue will focus on original empirical research addressing the relationship between foreign direct investment (FDI) inflows and a host country’s exports. Although there is extensive literature on the subject, as evidenced by Kastratović (2020) in his recent meta-analysis, the effects of foreign direct investment on host country exports remain ambiguous, which justifies further investigation in this Special Issue. Kastratović (2020)’s main conclusion was that the mixed results found in empirical studies can be explained by specific characteristics of the research carried out, such as the country, industry, period studied, or even by the model’s specification. In this way, following Kastratović (2020)’s suggestions, this Special Issue will consider papers relying on time series or panel data, which focus on individual countries (such as Russia, India, and Brazil, which, according to UNCTAD (2020), were among the top 20 host economies in 2019) or on a relatively homogeneous sample of countries, i.e., with similar economic and political characteristics (such as Latin America or transition economies which saw an increase in FDI inflows in 2019 (UNCTAD, 2020)). Firm‐level studies focusing on individual sectors, notably the primary sector and services, are also welcome, particularly in the countries mentioned above. Moreover, since FDI can have direct and indirect effects on host country exports (Görg, H., & Greenaway, 2004), studies that address this issue (by differentiating between direct and indirect effects of FDI) are particularly encouraged.

References

Görg, H., & Greenaway, D. (2004). Much ado about nothing? Do domestic firms really benefit from foreign direct investment?. World Bank Research Observer, Vol. 19, Issue 2, pp. 171-198

Kastratović, R. (2020), The impact of foreign direct investment on host country exports: A meta‐analysis, The World Economy, article in press, doi.org/10.1111/twec.13011

UNCTAD (2020), World Investment Report 2020: International Production Beyond the Pandemic, New York: United Nations Publications.

Dr. Rosa Forte
Guest Editor

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Keywords

  • FDI
  • exports
  • FDI spillovers
  • absorptive capacity

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Published Papers (3 papers)

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Research

15 pages, 628 KiB  
Article
Does FDI Promote the Resource Curse in Nigeria?
by Olatunji Abdul Shobande
J. Risk Financial Manag. 2022, 15(9), 415; https://doi.org/10.3390/jrfm15090415 - 19 Sep 2022
Cited by 4 | Viewed by 2146
Abstract
This study investigated whether Foreign Direct Investment (FDI) supported the resource curse hypothesis in Nigeria. The precise methodological contribution was based on the Vector Error Correction and Granger causality test. The finding showed cointegration among the variables, whereas the speed of adjustment was [...] Read more.
This study investigated whether Foreign Direct Investment (FDI) supported the resource curse hypothesis in Nigeria. The precise methodological contribution was based on the Vector Error Correction and Granger causality test. The finding showed cointegration among the variables, whereas the speed of adjustment was slightly low. Similarly, natural resource to gross domestic product, FDI, and exchange rate unidirectionally Granger cause economic welfare, whereas bidirectional Granger causality is observed between indicators of natural resources to export, trade, and economic welfare. The results clearly indicate that FDI and natural resource management could improve economic wellbeing, although with a cost of volatility in the exchange rate and utilisation of resources. Thus, the study recommends the urgent need for effective and efficient management of the country’s natural resources to attract foreign direct investment and generate growth that can contribute meaningfully to the welfare of the citizens. Likewise, there is a need to diversify oil resources to other non-natural resources for the economy to stimulate growth and reduce the vulnerability of the economy to external shocks. Full article
(This article belongs to the Special Issue Foreign Direct Investment and International Trade)
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22 pages, 1559 KiB  
Article
The Determinants of Outward Foreign Direct Investment from Latin America and the Caribbean: An Integrated Entropy-Based TOPSIS Multiple Regression Analysis Framework
by Henrique Correa da Cunha, Vikkram Singh and Shengkun Xie
J. Risk Financial Manag. 2022, 15(3), 130; https://doi.org/10.3390/jrfm15030130 - 9 Mar 2022
Cited by 9 | Viewed by 3320
Abstract
Given that home country factors play a major role in the internationalization of emerging market firms, there is an ever-growing debate on how they influence the intensity of outward foreign direct investment (OFDI) from these regions. This study investigates how home country factors [...] Read more.
Given that home country factors play a major role in the internationalization of emerging market firms, there is an ever-growing debate on how they influence the intensity of outward foreign direct investment (OFDI) from these regions. This study investigates how home country factors affect the OFDI intensity in Latin America and Caribbean (LAC) countries. We use the entropy weight method, which uses the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method and a balanced panel data consisting of 19 countries from 2007 to 2016. The results show a positive association between macroeconomic performance, formal institutions, infrastructure, technology and the OFDI intensity. Furthermore, we find that robust formal institutions, along with the quality of infrastructure and technology, positively moderate the relationship between macroeconomic performance and the OFDI intensity. These findings show that the internationalization of LAC firms is highly dependent on the contextual conditions in their markets. Full article
(This article belongs to the Special Issue Foreign Direct Investment and International Trade)
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26 pages, 3620 KiB  
Article
Factor Endowments, Economic Integration, Round-Tripping, and Inward FDI: Evidence from the Baltic Economies
by Andrzej Cieślik and Oleg Gurshev
J. Risk Financial Manag. 2021, 14(8), 348; https://doi.org/10.3390/jrfm14080348 - 29 Jul 2021
Cited by 7 | Viewed by 3226
Abstract
This paper studies the location choice of foreign multinational firms in the Baltic economies of Estonia, Latvia, and Lithuania using a knowledge-and-physical capital model across 2004–2017. We used the Bayesian model averaging estimation method to investigate a set of possible factors that drive [...] Read more.
This paper studies the location choice of foreign multinational firms in the Baltic economies of Estonia, Latvia, and Lithuania using a knowledge-and-physical capital model across 2004–2017. We used the Bayesian model averaging estimation method to investigate a set of possible factors that drive inward FDI. Our analysis demonstrates that factor endowments play a dominant role in driving vertical foreign direct investment, while external market barriers generate “tariff-jumping” FDI. Our analysis quantifies the effects of round-trip FDI, European integration, and external bilateral free trade agreements vis-à-vis inward FDI in the Baltics. Full article
(This article belongs to the Special Issue Foreign Direct Investment and International Trade)
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