Showing papers on "Foreign portfolio investment published in 1991"

State Characteristics and the Location of Foreign Direct Investment within the United States

Abstract: A conditional logit model of the location decision of foreign firms investing in manufacturing facilities in the United States is developed and estimated. The authors results for 1981-83 indicate that states with higher per capita incomes and higher densities of manufacturing activity attracted relatively more foreign direct investment. In addition, higher wages deterred foreign direct investment, while higher unemployment rates attracted it. Surprisingly, higher unionization rates were associated with increased foreign direct investment. Overall, higher taxes deterred foreign direct investment; however, more extensive transportation infrastructures and larger promotional expenditures were associated with increased foreign direct investment. Copyright 1991 by MIT Press.

The Role of Acquisitions in Foreign Direct Investment: Evidence from the U.S. Stock Market

Abstract: This paper examines foreign direct investment by studying shareholder wealth gains for 1273 U.S. firms acquired during the period 1970-1987. Three findings stand out. First, cross-border takeovers are more frequent in research and development intensive industries than are domestic acquisitions; furthermore, in three-fourths of cross-border transactions the buyer and seller are in related industries. These industry patterns suggest that costs and imperfections in product markets play an important role in foreign direct investment. Second, targets of foreign buyers have significantly higher wealth gains than do targets of U.S. firms. This cross-border effect is comparable in size to the wealth effects of all-cash and multiple bids, two effects receiving substantial attention in the finance literature, and is robust to inclusion of these two variables. Third, while the cross-border effect on wealth gains is not well explained by industry and tax variables, it is positively related to the weakness of the U.S. dollar, indicating a significant role for exchange rate movements in foreign direct investment.

Foreign bank activity in the United States: An analysis by country of origin

Abstract: The presence of foreign banks in the United States has grown dramatically in recent years. In particular, Japanese bank activity has grown rapidly and has raised concern from domestic bankers who have felt competitive pressure. This paper assesses the extent of the foreign bank presence in the United States and indicates its distribution by country of origin. The paper develops a formal model of determinants of the value of foreign bank assets and the number of foreign bank offices in the United States based on the country of origin of the investing banks and tests the model using recently available data from the Federal Reserve System. The empirical results indicate that foreign investment in the U.S., foreign trade with the U.S., and the size of the banking sector in the foreign country are positively correlated with that country's bank presence in the U.S. Less stable countries have greater foreign bank penetration, and geographic distance is somewhat positively correlated with bank presence.

Host Country Benefits of Foreign Investment

Abstract: This paper reviews the empirical evidence on the very different conclusions that can be drawn about productivity spillovers of foreign direct investment. It explains the concept of host country spillover benefits, describes the various forms these benefits can take, both within and between industries, and summarizes the evidence regarding the relative magnitudes of the various forms of spillovers. Moreover, the paper discusses host country policy measures which can accelerate both the BC affiliates' technology imports and the diffusion of their technology in the host economies.

Foreign Investment as a Dependent Variable: Determinants of Foreign Investment and Capital Penetration in Developing Nations, 1967–1978

Abstract: While foreign investment and capital penetration have become key predictor variables in many studies of economic development and social change, much less scrutiny has been applied to these phenomena as outcomes of intranational characteristics. In this crossnational, quantitative study of the determinants of growth of foreign investment and capital penetration, the growth of both phenomena is found to be similar and can be partially explained by common models based on the logic of market orientation. Moreover, such phenomena as foreign capital penetration in manufacturing and overurbanization are positively related to this growth, suggesting that previous research has misspecified certain relationships and that certain elements of the dependentdevelopment approach to dependency theory require refinement or modification. Foreign investment plays a central role in theories and empirical investigations of international development. While conventional perspectives arising from modernization theory view direct, private foreign investment in developing economies as an asset in the developmental struggles of the Third World, newer theories stressing economic dependency and core-periphery relations consider foreign investment the prime culprit in many Third World social ills, such as inadequate labor absorption, overurbanization, lagging fertility decline, and retarded economic growth (Wallerstein 1974; Chase-Dunn 1975; Evans & Timberlake 1980; Timberlake & Kentor 1983; Bornschier & Chase-Dunn 1985; Bradshaw 1987; London 1987, 1988). The most consistent support for these newer critical perspectives has come from the dependent-development strand of dependency thought, which views the process of capital accumulation as evolving over time. Specifically, the old colonialism of the mercantile capitalist era with its feudal interaction patterns and unequal exchange has shifted gradually to "dependent" capitalism, or to *Direct correspondence to the authorat theDepartmentof Sociology, 190North OvalMall, 300 Bricker Hall, The Ohio State University, Columbus, OH 43210-1353. i) The University of North Carolina Prs Social Forces, June 1991, 69(4):1169-1182 This content downloaded from 157.55.39.45 on Wed, 05 Oct 2016 05:25:34 UTC All use subject to http://about.jstor.org/terms 1170 / Social Forces 69:4, June 1991 the location of industrial capital in developing countries. In other words, colonialism has been replaced by a more subtle but no less effective neocolonialism (Galtung 1971; Cardoso & Faletto 1979; Bornschier & Chase-Dunn

The Surge of Asian NIC Investment into Indonesia 1

Abstract: Since 1987 a dramatic increase in both domestic and foreign investment in Indonesia, most of it in export-oriented activities, has occurred in response to improvements in a previously unattractive investment climate and in the country's trade regime. Most striking has been the rise in investment by Asia's four ‘newly-industrialising countries’ (NICs): Korea, Taiwan, Hong Kong and Singapore. This paper analyses the factors contributing to this increase and the investment patterns of the four countries. It then focuses on investment in the manufacturing sector, where most of the NIC investments have taken place. The relative importance of each country as a source of investment in individual sectors and industries is examined. The paper concludes that this recent investment surge may yield net social benefits for Indonesia, provided the country continues to adhere to sound macroeconomic and export-promoting policies. 1 The author gratefully acknowledges the valuable comments of H.W. Arndt, Masaaki Horiguchi,...

Foreign direct investment in Sub-Saharan Africa

Abstract: The authors of this paper examine trends in private foreign direct investment in sub - Saharan Africa, assess how this has affected the host economies, and discuss the prospects for increased investment in the 1990s. They examine new or nontraditional forms of investment as well as more traditional stock and flow trends. They also focus on the relationship between structural adjustment programs and foreign private investment. Foreign investment in the 1990s (as in the 1980s) is likely to flow to a few key sectors: energy, selected export manufacturing sectors, and possibly the tourist industry. The least attractive area for the foreign investor is exclusively import-substituting industrialization. Interested investors are more likely to commit technology and management than equity capital. As a result, development finance institutions are likely to play an increasingly important role in meeting the need for capital. Thus, activity in sub - Saharan Africa may be more effective at raising the total volume of investment than any change in the climate of fiscal and other incentives. There is no prospect whatsoever for foreign investment to meet sub - Saharan Africa's rising foreign exchange and savings gaps. For one thing, prospects in other parts of the rapidly changing world look brighter and less risky and are closer to home. For another (Catch 22), sub - Saharan Africa is unlikely to attract capital until the prospects for growth improve.

The trade balance effects of foreign direct investment in U.S. manufacturing

Abstract: With the rise in foreign direct investment in U.S. manufacturing during the 1980s, the affiliates of foreign multinationals have become potentially important sources of improved U.S. international competitiveness. This article describes the growing foreign presence in the U.S. manufacturing sector and identifies the channels through which foreign investment is most likely to influence exports and imports. The author presents estimates of the long-term trade balance effects of increased foreign ownership of U.S. manufacturing firms.

Foreign direct investment in Wales

Abstract: Economic recovery in the mid-1980s led to record levels of foreign direct investment (FDI) within the UK. Figures for 1988 show nearly £9 billion worth of inward direct investment, with 1989 showing a provisional figure of £15.8 billion (Business Monitor, 1990). Within these record aggregates there are marked regional disparities in shares of FDI projects and jobs. Wales in particular has attracted a relatively high share of inward investment jobs and projects. This paper places FDI within its full Welsh context. Following an analysis of the nature and extent of FDI in the Welsh economy of the 1980s, the paper goes on to examine the costs and benefits of FDI within a framework of the economic needs of Wales.

Direct foreign investment in the United States

Abstract: Cross-section analysis of direct foreign investment in the United States provides some support for market structure and transaction cost explanations of DFI. A time series, country-by-country analysis suggests the importance of profitability differences, the desire to avoid trade barriers, and a shift in investment patterns related to world oil shocks.

Taxation and Foreign Direct Investment in the United States: A Reconsideration of the Evidence

Abstract: Foreign direct investment in the United States boomed in the late 1980s. Some have attributed this rise to the Tax Reform Act of 1986, which by discouraging investment by domestic firms may have provided opportunities for foreign firms not as strongly affected by the U.S. tax changes. We challenge this view on theoretical and empirical grounds, finding that: (1) While the argument applies to new capital investment, the boom was primarily in mergers and acquisitions; (2) While the argument holds primarily for investment in equipment, there was no shift toward the acquisition of equipment-intensive firms, and (3) The FDI boom in the U.S. was really part of a worldwide FDI boom ? the U.S. share of outbound FDI from other countries did not increase during the period 1987-9.

Real Foreign Investment in Perspective

Abstract: Much concern regarding recent negative net foreign investment of the United States is misguided. It has frequently reflected misunderstanding of the nature of foreign investment and of misleading official measures. The extent of negative net foreign investment and, all the more so, its sum over the years, which is the presumed debt of the United States to the rest of the world, have been exaggerated. Correctly measured, which means taking into account changes in the value of the U.S. assets abroad that are usually ignored, they are not and do not threaten to be large relative to total income and wealth. Net foreign investment in the long run reflects relative growth and portfolio choices among nations. If the monetary authority does not prevent the fall of interest rates and exchange rates, rates of foreign investment can be expected, within a reasonable time, to be self-adjusting. They will then reflect underlying preferences and economic forces, interference with which is likely to do more harm than good.

Good for the gander? foreign direct investment in the United States

Abstract: As recently as 1978, C. Fred Bergsten, Thomas Horst, and Theodore Moran were able to address the most urgent issues linking U.S. welfare and direct investment in a book called American Multinationals and American Interests.' A decade later, the focus of policy attention had shifted almost completely. Scores of books and articles attempted to interpret the flow of incoming foreign direct investment (IFDI) that raised the 2.1 percent share of the U.S. nonfinancial corporate assets held by foreign-controlled enterprises to 10.6

Extending Financial Portfolio Theory for Product Management

Abstract: This paper attempts to modify financial portfolio theory for application in product portfolio decisions. The proposed multiperiod portfolio framework should help marketers in allocating scarce corporate resources to various competing products as well as contribute to developing a body of theory to solve an important problem in marketing management. Managerial and theoretical implications are discussed.

The adequacy of U.S. direct investment data

Abstract: New questions dealing with the growth of foreign direct investment in the United States have prompted this reassessment of the adequacy of US data on direct investment--data on both foreign direct investment in the United States and US direct investment abroad We have examined the adequacy of the existing data system for answering important questions in a number of areas--some of them new, but others of longstanding interest: the coverage and accuracy of the data, and the public's accessibility to them; the measurement of the US investment position and servicing burden; the interaction between direct investment and the trade balance; the impact of direct investment operations on a country's economic welfare; and the explanation and forecasting of direct investment flows and activities A series of conclusions and recommendations is collected in the last section of the paper

Foreign Investment In Brazil

Abstract: The foreign investment climate the profit remittance law and income taxation debt-equity conversions portfolio investment foreign technology transfers miscellaneous legal devices for regulating foreign investors restrictions on the foreign investor expropriation and investment disputes reforming Brazil's regulatory scheme.

Should the U.S. Restrict Foreign Investment

Abstract: During the 1980s both foreign investment in the United States and the debate about its effects on the U.S. economy increased in volume. Proponents of foreign investment assert that it boosts the productive capacity of the U.S. economy, reduces interest rates, and brings with it new technology and management practices. Some Americans seek to restrict foreign investment in the United States, arguing that such investment has deleterious consequences for the domestic economy or national security. The economic and national security arguments offered in support of administrative restriction of foreign investment are flawed. Some are based on misapplications of the principles of economics or misperceptions concerning the behavior of foreign firms. Others ignore the remedies available to the U.S. government should it feel that national security is threatened by the behavior of foreign investors.

Protecting Losers: Optimal Diversification, Insurance, and Trade Policy

Abstract: This paper derives a portfolio diversification rationale for a trade policy regime that insures returns to nondiversifiable human capital investment. In the absence of complete insurance markets for human capital, the decentralized equilibrium is characterized by excessive specialization. The socially optimal investment portfolio entails diversification for the reasons familiar from the CAPM. By credibly promising to protect losers ex post, the government can achieve the optimally diversified investment pattern. In contrast to previous results, two instruments are sufficient to achieve both efficient reallocation and full insurance when human capital is mobile at some cost, due to the endogeneity of the initial investment decision.

Why Foreign Corporations are Buying into U.S. Business

Abstract: More than ever before, foreign companies have been making themselves at home in U.S. markets. The rapid growth of foreign direct investment in the United States reflects the emergence of highly competitive firms based abroad and is thus linked to the loss of U.S. international competitiveness in trade. Two-way flows of direct investment have blurred the distinction, at least among industrial nations, between host and source countries. While the United States remains a major source country as well as the strongest voice for international action to regulate national investment policies, it has also become the world's most important host to direct investment, with all the domestic political pressures entailed. A key policy question for the 1990s is whether the United States will continue its leadership role in combating investment policies that achieve nationalistic objectives at the expense of global efficiency, or join other host countries in adopting its own nationalistic policies.

Barriers to Foreign Investment in the U.S. and Other Nations

Abstract: Foreign investment has often been a controversial issue because of fears that it may become a tool for foreign influence in a country's economy. This attitude was common in Latin America and other countries, but, until recently, it was rare in the United States since this country, for much of this century, had been a net capital exporter. Recent years, however, saw a change in attitude when the United States became a net capital importer. This article surveys the restrictions on foreign direct investment imposed by the United States and other major countries. It concludes that the United States is still the most hospitable country—or at least one of the most—to foreign direct investment. Recent changes, however, have reduced the distance between the U.S. openness and that of other countries mainly by making the U.S. climate for foreign investment less welcoming.

The Impact of U.S. Laws on Foreign Direct Investment

Abstract: The U.S. economy has been and continues to be more open to foreign direct investment than any economy in the world. National policy is one of complete neutrality, but when state and local incentives are considered, the overall stance may be one of encouragement. At the national level, potential foreign investments are scrutinized only vis-a-vis their threat to national security, and very few are subjected to even this examination. Monitoring foreign direct investment is now done but is not done well. Improvements in data gathering are possible and recently have been considered more seriously. More prominent recent issues in the control of foreign direct investment seem to concern infiltration of the political system, specific nationalities, and the purchases of landmark properties. In spite of discussion and legislative proposals, there is little enlightened opinion that restrictions on foreign direct investment in the United States should increase. As long as the nation-state continues to be the predomin...

The French Property Investment Market

Abstract: Discusses the context for French property investment. Shows how it has evolved as a result of social, economic and political forces. Considers investment media, investment methods and types of investors. Finally examines in depth the phenomenon of ‘mondialisation′ – the increasingly international nature of property investment.

Foreign Investment in the U.S. Economy before 1914

Abstract: The United States was the world's largest debtor nation in 1914. From independence to the mid-1870s, American federal, state, and local government securities had represented the greatest single attraction for foreign investors, yet by 1914 foreign investment in sovereign debt was small. By the mid-1870s, the private sector had become the major recipient of foreign investment, with huge sums going into financing the vast national railroad system. Then, large American industrial, public utility, and retail corporations looked to foreign as well as domestic sources of finance. Because Americans could obtain funds from abroad, American growth was never retarded by the absence of capital. Especially in the late nineteenth and early twentieth century, foreign direct investment—carrying with it technology, know-how, and management—went into U.S. agriculture, manufacturing, and services. Foreign capital played a substantial and beneficial role in U.S. economic development from independence to 1914.