Adam R. Cross

FDI, Regional Differences and Economic Growth: Panel Data Evidence from China

Development economists have long argued that countries pursuing externally oriented development strategies are more likely to achieve higher rates of economic growth than those that are internally focused. A number of studies have examined the relationship between inward FDI and economic growth in the developing host countries.1 A generally accepted conclusion is that FDI has played a significant role in promoting economic growth in host countries because FDI represents ‘the transmission to the host country of a package of capital, managerial skills, and technical skills’ (Johnson, 1972, p. 2). An interesting finding of previous studies is that the economic and technological conditions of a recipient economy influence the extent to which FDI contributes to growth.

The Impact of Home Country Institutional Effects on the Internationalization Strategy of Chinese Firms

Mainland Chinese firms have become important international investors. Many have gained their capabilities to internationalize in a domestic institutional environment characterised by significant market imperfections. In this study, we argue that the imperfections affect firm behavior depending on firm size, ownership form, and location. We find preliminary support for the notion that large, well-connected Chinese firms benefit most from institutional advantages, but that smaller firms internationalize because of institutional constraints. This represents a more nuanced view of the determinants of Chinese firm internationalization than is evident in prior research, with consequences for future theorising and empirical research on Chinese MNEs.

Affiliate and non-affiliate intellectual property transactions in international business: an empirical overview of the UK and USA

This study investigates the pattern and growth of affiliate and non-affiliate international transactions in intellectual property (IP) for the USA and the UK. Using official data, it explores how far and in what ways the patterns of licensing and franchising activity accord with theoretical expectations. We find significant differences in the pattern of non-affiliate and affiliate transactions by country and region. While these can directly be linked to the extent of foreign direct investment (FDI) by the investing countries, it is also evident that the policy regime developments of the host countries, as well as the international (and regional) regime, have a bearing on the method by which intellectual property is exploited. Leading these are the degree of limitation in host market size, the degree of fragmentation of markets on a regional basis and, possibly, the excess transaction costs imposed on FDI by cultural and institutional barriers in certain countries.

What Can Emerging Markets Learn from the Outward Direct Investment Policies of Advanced Countries

In scholarly and political circles, the economic gains to a country of attracting inward foreign direct investment (IFDI) are now largely uncontested. Such investments are generally perceived to bring a number of benefits to a host economy, not least in relation to employment, productivity levels, organizational and managerial practices, backward and forward linkages, technology, and greater participation in the international division of labor (Buckley and Casson 1998). In recognition of these benefits, much of the policy debate concerning foreign direct investment (FDI) has revolved around IFDI policies and international investment agreements (IIAs), with capital exporting countries usually seeking greater market access, nondiscriminatory treatment, and investment protection in host countries that improves the competitiveness of their own multinational enterprises (MNEs), and developing countries offering increasingly attractive investment policy regimes (UNCTAD 1995). One outcome is that policies toward IFDI have now become relatively well established, wide ranging, and transparent among both developed and developing countries. At the same time, our understanding of the relationship between policy and inward investing firm behavior is reasonably well advanced (Rugman and Brewer 2001).

An Assessment of the Effects of Institutional Change on Chinese Outward Direct Investment Activity

Since the instigation of the “open-door” policies (gaige kaifang,) in 1978, China has experienced three decades of considerable economic and institutional reform. These reforms have been directed towards changing the domestic industrial structure and increasing the degree of integration of China’s economy and its businesses into the global economy. At the same time, China has evolved from a position of marginal relevance in terms of its outward foreign direct investment (OFDI) levels to becoming an important source country, especially among developing countries. To illustrate, the Chinese Ministry of Commerce reports that domestic firms invested US

Japanese management at a crossroads? The changing role of China in the transformation of corporate Japan

21 billion abroad in 2006, raising China’s OFDI stock to US

China’s Inward Foreign Direct Investment Success: Southeast Asia in the Shadow of the Dragon

90 billion (MOFCOM, 2007).

Japanese foreign direct investment in India: An institutional theory approach

This introduction to the special issue, ‘Cross-cultural management practices in East Asia: lessons for Japanese MNEs’, argues that better understanding is needed of how the economic rise of China is influencing the transformation of corporate Japan. After examining key trends in the evolution of Sino-Japanese business relations, we consider potential triggers of corporate transformation under the headings of marketing and distribution, inter-corporate networks and human resources management. Each of these areas is discussed in the context of increasing engagement of Japanese firms with the Chinese economy and the ability of Japanese firms to transfer sources of competitive advantage to this emerging market.

A retrospective and agenda for future research on Chinese outward foreign direct investment

This paper explores the impact of China’s growing prominence in global and regional foreign direct investment (FDI) fl ows on the Southeast Asian countries as investment locations. Providing internal social and economic cohesion is maintained, China is likely to exert a greater pull on regional FDI after WTO accession. To benefit from China’s success, the Southeast Asian countries will need to replace deteriorating individual locational advantages relative to China with a superior regional one. The ASEAN Free Trade Agreement or the Asian Investment Area or both are likely to be important policy solutions.

The Emergence of Chinese Firms as Multinationals: The Influence of the Home Institutional Environment

This article charts the history of Japanese corporate engagement with India. While there has been a profound historic relationship between the two nations, economic interaction is commonly portrayed in the context of geographical and psychic distance. As institutions set the rules of corporate engagement, we analyse the evolving regulatory and policy regime for foreign direct investment (FDI) in post-independence India and the corporate strategies of Japanese multinational enterprises (MNEs) in response to this institutional change. Using a firm-level dataset we show that the trajectory of Japanese investment in India broadly follows that of other nationalities of foreign firms. Differentiated responses to institutional changes are detected by industry. Our analysis reveals important instances of Japanese firm flexibility and pragmatism vis-à-vis the rapidly growing Indian market.