Showing papers on "Foreign portfolio investment published in 1988"
TL;DR: In this article, the authors investigated the impact of several factors on the foreign investment of U.S. advertising agencies by using the theories on the determinants of foreign direct investment by manufacturing firms.
Abstract: This paper investigates the impact of several factors on the foreign investment of U.S. advertising agencies by using the theories on the determinants of foreign direct investment by manufacturing firms. For the two years examined, the hypotheses about the impact of host country market size, host country geographic proximity, firm size, firm's international operations experience, oligopolistic reaction, and presence of home country customers abroad are all confirmed. This paper also investigates the impact of oligopolistic reaction among the top ten and the second ten largest agencies and finds a stronger impact for the former.
423 citations
152 citations
TL;DR: In this paper, an analysis of the regional effects of inward foreign direct investment, a particularly dynamic component of the internationalization process, is presented, with the locations of foreign operations becoming more like those of U.S. firms.
Abstract: The internationalization of the U.S. economy over the past fifteen years has had a discernible impact on regional development. This paper is an analysis of the regional effects of inward foreign direct investment, a particularly dynamic component of the internationalization process. Foreign direct investment dispersed over time, with the locations of foreign operations becoming more like those of U.S. firms. Regression results demonstrate that the location of foreign-owned property, plant, and equipment can be explained by variables representing: energy costs, infrastructure/transportation, and labor climate.
140 citations
TL;DR: In this paper, the authors investigated the effect of home country political risk factors on foreign direct investment in the U.S. and found that investment activity from the ICs is dependent on home country economic and political conditions.
Abstract: This study investigates the proposition that home country political risk factors influence outward foreign direct investment. Investment data from the U.S. Department of Commerce is used to model investment activity in the United States from various industrialized source countries. Foreign direct investment is regressed on home country domestic and international economic and political risk measures for the Western industrial countries. Results indicate that investment activity from the ICs in the U.S. is dependent on home country economic and political conditions.
140 citations
TL;DR: In this paper, the effects of domestic taxes and rates of return on foreign direct investment in the United States were analyzed, and the results showed that whereas foreign direct direct investment was not negatively affected by domestic taxes, it was positively affected by international taxes.
Abstract: This paper provides an analysis of the effects of domestic taxes and rates of return on foreign direct investment in the United States. The results show that, whereas foreign direct investment thro...
113 citations
26 citations
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29 Jun 1988
TL;DR: In this paper, the authors use portfolio theory to evaluate the risk of non-financial investment decisions in firms and propose that, when making internal resource allocations, firms seek not only to earn profits but also to minimize total firm investment risk.
Abstract: "Investment Choices in Industry" lays the groundwork for increasingly broader and more varied application of portfolio theory to the making of operating decisions in firms. Portfolio theory until now has been used mainly to allocate investments in financial assets such as stocks and bonds; here Constance Helfat extends the theory to evaluate the risk of nonfinancial investment decisions in firms. Analyzing the investment and R & D decisions of large oil companies, she uses portfolio theory as a tool to predict firm behavior and proposes that, when making internal resource allocations, firms seek not only to earn profits but also to minimize total firm investment risk as well.Helfat's study differs from existing work in a number of respects. The theoretical model it develops (an adaptation of the Tobin-Markowitz portfolio selection model of stock market investment) is highly comprehensive. It focuses on the composition of a firm's investment portfolio as well as on the risk and return characteristics of each individual investment. The model also incorporates the dependence of certain asset prices - such as those determined by auction - on internal firm covariance risk. Unlike many empirical studies, the method used in implementing the model relies on micro-level, projectspecific data to forecast ex ante risks and returns to firm investments.Finally, Helfat uses a unique data set - the Financial Reporting System of the U.S. Department of Energy - to analyze the composition of actual investment expenditures in the petroleum industry.Constance E. Helfat is Assistant Professor at the J. L. Kellogg Graduate School of Management at Northwestern University.
26 citations
Book•
01 Jan 1988
16 citations
10 citations
TL;DR: In this article, the authors analyzed 84 countries in Africa and Latin America and found that foreign investment generally promotes economic growth, especially in the manufacturing, transportation, and communications sectors, while mining investment has little effect.
Abstract: Does direct foreign investment in underdeveloped countries help or hinder economic growth? Is the effect the same for investment in mining as it is in manufacturing? Does it affect agriculture, transportation, manufacturing, and communications sectors the same? Analysis of 84 countries in Africa and Latin America shows that foreign investment generally promotes growth, especially in the manufacturing, transportation, and communications sectors. Mining investment has little effect. Lags of three, six, and nine years often change the impact.
7 citations
TL;DR: In this article, the authors examined the extent, role and importance of foreign direct investment in the tourism sector of the Greek economy and evaluated the governmental incentives and regulations which apply to the tourism industry.
Abstract: An attractive package of investment incentives is necessary to entice foreign investors into the Greek tourist sector, in order to reap potential economic and other benefits resulting from the orderly development of tourism in Greece. This article examines the extent, role and importance of foreign direct investment in the tourism sector of the Greek economy. In particular, the sectoral and regional breakdown of foreign investment are demonstrated. Finally, the governmental incentives and regulations which apply to the tourism sector are assessed and their implications highlighted with respect to the five-year tourism development plan 1983–87.
TL;DR: In this paper, the authors reviewed some new trends in this area and focused specifically on their implications for export processing zones which in the past have been a widely used instrument to attract foreign investment.
Abstract: Foreign direct investment flows to developing countries have undergone major changes in recent years, both regarding their scope and their determinants. This article reviews some new trends in this area and focuses specifically on their implications for export processing zones which in the past have been a widely used instrument to attract foreign investment. How are they affected by the new developments and what can be their role in the future?
TL;DR: There has been a fundamental shift from the overwhelming criticism of multinational corporations to a pervasive enthusiasm about the role that foreign direct investment can play in the Third World as discussed by the authors, where governments as diverse as China, India, Mozambique and Sri Lanka are joining Brazil, Indonesia, Malaysia and Mexico in looking to international companies for the fulfillment of their five-year plans.
Abstract: IN LITTLE MORE than a decade, there has been a fundamental shift from the overwhelming criticism of multinational corporations to a pervasive enthusiasm about the role that foreign direct investment can play in the Third World. Not only does the Reagan administration support a greater place for multinational corporations in the less developed countries (LDGs)—Secretary of State George P. Shultz has called them a "main source of funds available to finance development and stimulate growth," and Treasury Secretary James A. Baker III a "direct substitute for official financial flows."—but governments as diverse as China, India, Mozambique and Sri Lanka are joining Brazil, Indonesia, Malaysia and Mexico in looking to international companies for the fulfillment of their five-year plans. The United Nations Center for Transnational Corporations has redirected its attention from a preoccupation with exposing the sins of foreign investors to designing programs to attract them. The International Monetary Fund (IMF) and the World Bank share the
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TL;DR: In this paper, the authors used a questionnaire approach to gather the data with which to answer the question of what is the risk manager's role in captive investment strategy and other related issues.
Abstract: Captive insurers have been largely perceived as risk financing vehicles, that among other things, generate a superior investment performance. That perception was advanced by promoters injecting tax advantages and a free investment atmosphere as key factors. Previous research has shown that captives, by and large, are rather conservative in terms of their underwriting exposure and insurance leverage posture. These findings invited a supposition that such conservatism would afford more risk taking in investments. While risk managers have been involved in operating captives for the last two decades, unanswered is the question of their involvement, if any, in investment decisions or investment management. Very little has been written on this subject and practically nothing on an empirical basis. A questionnaire approach was used to gather the data with which to answer the question of what is the risk manager's role in captive investment strategy and other related issues. A model of captive's investment strategy is presented in which the outputs - instruments, maturities and currencies – were a function of investment policy issues such as who sets the policy, the investment policy criteria; and investment management issues such as who manages the portfolio, who selects the manager, and manager's selection criteria. All inputs boiled down to four main components; “risk” versus “return” for investment criteria and “insiders” versus “outsiders” for the personnel who select or manage the investment portfolio. The key finding of the study was a general reaffirmation of captives' conservatism which apparently spilled over into their investments operations. Captives have pursued a generally short term investment strategy using primarily short term instruments mostly for short maturities. Equities and mutual funds were almost inexistant. Captives investment strategy is largely dominated by minimizing “risk” concerns rather than by maximizing issues of “return”. It also becomes evident that the most influential individuals in setting guidelines and/or managing portfolio are inside personnel. Risk managers appear to be quite influential in setting policy or selecting the investment manager but, the least likely candidates for actual management of the portfolio. Investment performance of captives, in the year of the survey, was compatible with the overall investment performance of the U.S. property and casualty industry. However it was largely below investment performance yardsticks applied to investment return in other industries.
TL;DR: The authors analyzes the effects of foreign investment on a Harris-Todaro economy and shows that in the absence of another distortion foreign investment necessarily improves the welfare of the small economy independently of the pattern of trade.
Abstract: This paper analyzes the effects of foreign investment on a Harris-Todaro economy. It is shown that inflows of foreign capital in the manufacturing sector may decrease or increase unemployment. In the absence of another distortion foreign investment necessarily improves the welfare of the small economy independently of the pattern of trade. This paper identifies the conditions that determine the direction of change of national welfare, in the presence of a tariff and unemployment. Import substitution strategies are more likely to improve welfare and increase employment in countries characterized by a high ratio of urban to rural employment. [820]
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TL;DR: In this paper, a nonresident alien individual or foreign entity [hereinafter Foreign Person] can qualify for a complete exemption from U.S. federal income taxation on ''portfolio interest'' income from a debtor, provided such income is not effectively connected with the conduct by such Foreign Person of a trade or business in the United States.
Abstract: Under sections 871(h) and 881(c) of the Internal Revenue Code [hereinafter I.R.C. or Code], a nonresident alien individual or foreign entity [hereinafter Foreign Person] can qualify for a complete exemption from U.S. federal income taxation on \"portfolio interest\" income from a U.S. debtor, provided such income is not effectively connected with the conduct by such Foreign Person of a trade or business in the United States.' Two types of instruments may qualify for the portfolio interest exemption nonregistered instruments (such as bearer instruments) and registered instruments. Without the exemption, portfolio interest is subject to a U.S. federal withholding tax equal to thirty percent of the gross amount paid (except as reduced under a bilateral income tax treaty between the United States and the creditor's country of residence). 2
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TL;DR: The increasing purchase of U.S. assets by foreigners in recent years has been blamed on the current account deficit, has been attributed to the Japanese, and has caused alarm about loss of economic independence as discussed by the authors.
Abstract: The increasing purchase of U.S. assets by foreigners in recent years has been blamed on the currentaccount deficit, has been attributed to the Japanese, and has caused alarm about loss of U.S. economic independence. These three common views are based on misperceptions about the causes, sources, and implications of foreign direct investment.
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TL;DR: This article carried out a linear programming analysis on the consolidated balance sheets of commercial banks in Singapore for the period 1978-1983 and found that large banks do try to maximize the returns of their portfolio, subject to legal, policy, bounding and total asset constraints, which denote riskiness and liquidity of the portfolio of assets.
Abstract: James Tobin's portfolio theory can be applied to bank portfolio management in that a bank would maximise the rates of return of its portfolio of assets, subject to the expected degree of risk and liquidity. Chambers and Charnes (1961), Cohen and Hammer (1967), Booth and Dash (1979) and others apply the linear programming model to the management of bank funds. This paper carries out a linear programming analysis on the consolidated balance sheets of commercial banks in Singapore for the period 1978–1983. The results show that by and large banks do try to maximise the returns of their portfolio, subject to legal, policy, bounding and total asset constraints, which denote riskiness and liquidity of the portfolio of assets. In a direct way, banks conform to the portfolio choice theory; they have to balance yield and liquidity against security. Although the computer cannot replace a manager, linear programming can serve as a useful guide.
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