Steven Globerman

Bio: Steven Globerman is an academic researcher from Western Washington University. The author has contributed to research in topics: Foreign direct investment & Corporate governance. The author has an hindex of 21, co-authored 48 publications receiving 4282 citations. Previous affiliations of Steven Globerman include Simon Fraser University.

Governance infrastructure and US foreign direct investment

Abstract: This paper examines the statistical importance of governance infrastructure as a determinant of US foreign direct investment (FDI). In broad terms, governance infrastructure represents attributes of legislation, regulation, and legal systems that condition freedom of transacting, security of property rights, and transparency of government and legal processes. Our econometric analysis uses a two-stage estimation procedure. In the first stage, the probability that a country is an FDI recipient is estimated. The results indicate that countries that fail to achieve a minimum threshold of effective governance are unlikely to receive any US FDI. Countries that receive no US FDI are typically countries that do not promote free and transparent markets, that have ineffective governments, and that often have legal systems that are not rooted in English common law. In the second stage, the analysis is restricted to those countries that did receive FDI flows. The estimated equations focus on the determinants of the amount of FDI received. Given that a country is a recipient of US FDI, governance infrastructure – including the nature of the legal system – is an important determinant of the amount received.

Foreign Direct Investment and `Spillover' Efficiency Benefits in Canadian Manufacturing Industries.

Abstract: The existence of indirect economic benefits of foreign direct investment in Canada is investigated for a sample of Canadian manufacturing industries. Estimates of labour productivity in domestically owned plants are constructed and employed as the dependent variable, and various measures of foreign ownership are included among the independent variables in the estimating equations. Labour productivity differences across Canadian-owned plants are found to be positively related to an industry's capital intensity, plant-scale economies, labour quality, average hours worked per employee, and the amount of foreign ownership in an industry. L'investissement direct en provenance de l'etranger et ses efjets de retombee benefiques sur l'efficacite de l'industrie manufacturiere canadienne. L'auteur examine un echantillon d'industries manufacturieres canadiennes pour decouvrir s'il existe trace de benefices economiques indirects de l'investissement direct en provenance de l'etranger. Certains estimes de productivite du travail dans des usines localisees au Canada et possedees par des Canadiens sont construits et utilises comme variables dependantes dans une serie d'equations oiu diverses mesures de propriete etrangere dans l'industrie sont utilisees comme variables independantes. I1 appert que les differuntiels de productivite entre les usines sous controle domestique sont lies directement au degre d'intensite capitalistique de l'industrie, aux economies d'echelle au niveau de l'usine, a la qualite du travail, a la moyenne d'heures de travail par employe et au degre de propriete etrangere dans l'industrie.

The Impact of Government Policies on Foreign Direct Investment: The Canadian Experience

Abstract: The purpose of this paper is to identify, using the framework of a statistical model, the extent to which policy changes in Canada specifically directed toward inward foreign direct investment (FDI) have influenced both capital outflows to Canada and capital outflows from Canada. The paper adds to the literature concerned with how public policies targeted specifically at FDI have altered capital inflows, and uniquely links such policies to outward direct investment (ODI). We examine specifically the effects of major policy changes toward FDI implemented by the Canadian government over the period 1950-1995. In Canada's case, free-trade agreements (FTA and NAFTA) appear to have significantly increased levels of inward and outward foreign direct investment; however, Canada's attempt to screen FDI via the Foreign Investment Review Agency (FIRA) had no significant effects on either FDI or ODI.

The Economic Performance of Foreign Affiliates in Canada

Abstract: This study compares the economic performance of foreign-owned and Canadian-owned establishments. The authors' results show that foreign affiliates have significantly higher value-added per worker and pay higher wages than do Canadian establishments but these differences vanish once they control for factors such as size and capital intensity. The authors find no significant differences in the performance of Canadian establishments owned by U.S., European, and Japanese firms. Their findings suggest that foreign investment may benefit Canada but do not provide support for country-specific investment promotion policies.

Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela

Abstract: Governments often promote inward foreign investment to encourage technology 'spillovers' from foreign to domestic firms. Using panel data on Venezuelan plants, the authors find that foreign equity participation is positively correlated with plant productivity (the 'own-plant' effect), but this relationship is only robust for small enterprises. They then test for spillovers from joint ventures to plants with no foreign investment. Foreign investment negatively affects the productivity of domestically owned plants. The net impact of foreign investment, taking into account these two offsetting effects, is quite small. The gains from foreign investment appear to be entirely captured by joint ventures.

Multinational Corporations and Spillovers

Abstract: The operations of multinational corporations continue to stir strong emotions, both in the home countries and abroad. In the major home countries, the debate on foreign direct investment has ranged from worries that outward FDI may substitute for domestic investment and erode technology leadership, to the argument that firms must invest abroad in order to stay competitive in an increasingly international environment. The attitudes towards MNCs have also been mixed in the host countries, although the proponents of FDI seem to have gained the upper hand since the late 1980s. Most host countries have liberalized their FDI regulations since the early 1980s — many are now actively trying to encourage foreign firms to invest — and the benefits of inward FDI on capital formation, employment, exports and technology are generally considered to dominate the costs of foreign ownership of local factors of production.

A transaction costs theory of equity joint ventures

Abstract: This paper presents a transaction costs theory of equity joint ventures. It distinguishes between ‘scale’ and ‘link’ JVs. Scale JVs arise when parents seek to internalize a failing market, but indivisibilities due to scale or scope economies make full ownership of the relevant assets inefficient. Link JVs result from the simultaneous failing of the markets for the services of two or more assets whenever these assets are firm-specific public goods, and acquisition of the firm holding them would entail significant management costs.

International Technology Diffusion

Abstract: This paper surveys what is known about the extent of international technology diffusion and channels through which technology spreads. Productivity differences explain much of the variation in incomes across countries, and technology plays a key role in determining productivity. The pattern of worldwide technical change is determined largely by international technology diffusion because a few rich countries account for most of the world's creation of new technology. Cross-country income convergence turns on whether technology diffusion is global or local. There is no indication that international diffusion is inevitable or automatic, but rather, domestic technology investments are necessary. Better understanding of what determines the effectiveness of technology diffusion sheds light on the pace at which the world's technology frontier may expand.