Tourism and economic growth in the Pacific region: evidence from five small island economies

We present a country-specific analysis on the effect of tourism on the economic growth of five small Pacific Island Countries (PICs) – Fiji, Samoa, Solomon Islands, Tonga and Vanuatu. The results show tourism development is growth-enhancing for all five countries. Foreign direct investment (FDI) is growth-enhancing for Fiji, Samoa, Solomon Islands and Vanuatu, and in the short run, a delayed negative association for Fiji and Vanuatu is found. Remittances are growth-retarding for Fiji, Samoa and Tonga, with a short-run delayed positive association for Fiji, Tonga and Samoa. Financial development is growth-retarding for Solomon Islands and Tonga, with a short-run positive association for Fiji and Samoa. While the results underscore the huge importance of tourism in generating growth and FDI in the Pacific, given the ongoing adverse effects of Coronavirus disease 2019 (COVID-19) pandemic, PICs will have to focus on alternative sectors to progress economic activities. Policy suggestions are discussed along these lines. [ FROM AUTHOR] Copyright of Journal of the Asia Pacific Economy is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)

Analysis of the Characteristics of the Medical Industry and the Determinants of Investment: Focusing on South Korea–U.S. FDI

Purpose – This study analyzes the current status, background, and factors that affect the maintenance and success of the South Korea–U.S. medical foreign direct investment (FDI), which has been rapidly increasing since the COVID-19 pandemic. Design/Methodology/Approach – This study was conducted from the perspective of the United States (U.S.), the host country of investment. A panel analysis was conducted with the 10-year data of economic and logistics factors of 30 major U.S. states. The independent variables were Gross domestic product (GDP), payroll, and employment rate, and logistics factors were the number of logistics bases and amount of investment. The dependent variable was the amount of South Korea–U.S. medical FDI. Findings – The empirical analysis revealed that GDP, payroll, and number of airports had significant positive effects on FDI. The medical industry is a typical high value-added process industry, and the economic power of the host region and payroll to employ excellent workers were key variables. Air transport infrastructure was also a prominent factor due to the nature of pharmaceutical drugs. Research Implications – The analysis results show the typical characteristics of the medical industry. Theresults and implications can guide future medical FDI in a more effective direction. © 2023 International Academy of Global Business and Trade. All rights reserved.

The Effect of Economic Policy Uncertainty on Foreign Direct Investment in the Era of Global Value Chain: Evidence from the Asian Countries

The global value chain has promoted foreign direct investments in emerging markets. Not only resources but also public policies can affect the inflows or outflows of foreign direct investments (FDI). This study investigates the effect of economic policy uncertainty on net foreign direct investment inflows in 48 Asian countries. We use the panel dataset from different sources from 1995 to 2020. Our core dependent variable is net foreign direct investment inflows, and the explanatory variable is economic policy uncertainty. The study's control variables include trade, GDP per capita, GDP growth, population, financial development, inflation, and employment. We use the generalized system method of moment (SYS_GMM). Furthermore, the robustness of our empirical results is checked by using the different proxy variables of policy uncertainty. Our results confirm the negative effect of policy uncertainty on foreign direct investment inflows in 48 Asian countries. Our results show that foreign investment inflows are more sensitive than domestic investment. The influence of domestic and global uncertainty on inward FDI is greater than domestic investment. Furthermore, the interaction effect of financial development (FD) shows that FD does not affect mitigation of the negative impact of global economic policy uncertainty on foreign investment inflow. In contrast, FD mitigates the adverse effects of domestic policy uncertainty on foreign and domestic investment. The findings imply that policies need to be attractive, effective, and transparent to woo FDI to the emerging markets.

Reshoring from China: comparing the economic statecraft of Japan and South Korea

This article examines the Japanese and South Korean governments' reshoring and diversification policies of supply chains especially away from China since the early 2010s, with particular attention to the measures taken under the 2020–21 pandemic. The article also explores how much Japanese and South Korean reshoring from China, a subset of foreign economic policy, counts as economic statecraft as a deliberate government attempt to achieve geopolitical objectives using ‘economic' means. One would expect these governments, which innovated proactive industrial policies and guided the private sector to catch up with developed economies in the 20th century, to have an easy time encouraging businesses to re-shore. While these two governments have employed various policy instruments to shift their economic dependence away from China, there is only limited success in motivating businesses to return to their homeland. This leads to an intriguing departure in our understanding of the capacity of those two Asian nations, which used to be considered prototypical ‘developmental states' where governments have significant influence over business behaviour. This research brings more nuance and complexity to prevailing state-as-unitary-actor assumption of the economic statecraft literature and advocates closer attention to domestic sources of foreign economic policy. © 2023 Informa UK Limited, trading as Taylor & Francis Group.

CAUSALITY BETWEEN FDI IN REAL ESTATE AND TOURISM GROWTH: COUNTY-LEVEL DATA FROM CROATIA

Croatia is a developed tourist destination that is overly dependent on tourism. Looking at the Croatian economy, the first thing that catches one's eye is the role that tourism plays in its structure. It is a frightening fact that tourism generates almost a quarter of Croatia's GDP. Tourism in Croatia has been growing steadily for years, and before the COVID-19 pandemic, Croatia began to face the problem of over-tourism. The real estate market in Croatia is also recording continuous rates of price growth, especially with regard to the attractive coastal region. Foreign direct investment (FDI) in real estate in Croatia became significant during the second decade of the 21st century, and today real estate is in second place if one looks at the structure of FDI in Croatia according to the National Qualification of Activities. In the last 10 years, real estate has accounted for 17.8% of all FDI in Croatia. Given the attractiveness of Croatia as a tourist destination, it is not surprising that its real estate market draws attention. The main goal of this paper is to determine the causal link between FDI in real estate and tourism at the level of Croatian counties in the period from 2007 to 2020. The research results found the existence of a one-way causal relationship running from international tourist arrivals to FDI in real estate at the 5% level of significance. © 2022 Authors. All rights reserved.

WEAPONIZING THE COVID-19 VACCINE: THE GEOPOLITICAL STRUGGLE

As the world continues to navigate a global pandemic that ignores national borders, it is not surprising to find a divide between the interests of vaccine-producing countries - and their entire supply chain networks for intermediates and raw materials - and countries that are primarily reliant on these producers for their vaccine consumption. This paper puts this debate in the context of a multi country strategic game where the major players have been able to produce a vaccine for COVID-19 and control the distribution of the vaccine and all its components. To address this issue of sovereign players, some have raised the possibility of a GATT/WTO intervention into COVID-19 vaccine sale and distribution. In addition, a legal battle is taking shape over lucrative patent rights for COVID-19 vaccines, with drug companies pitted against each other and government and academic scientists over who invented what. At the heart of the disputes is the billion-dollar question: Who can claim to have invented important elements of the COVID-19 vaccines? In June 2022, the WTO struck deals on a partial patent waiver for COVID-19 vaccines. Most observers believe that this change to the intellectual property rules will have limited impact on actual production for now because a current surplus of vaccines globally means there is little demand among vaccine makers to increase output. The implications are clear. The WTO compromise has allowed the existence of high hurdles for exports of products made under such a license. Given the limited WTO compromise agreement there are several options available to solve the problem of lack of access to the COVID-19 vaccine consuming nations at this stage. First, the US Supreme Court could invalidate each of the pharmaceutical companies' patent requests. Second, individuals could file legal actions designed to disgorge the monopoly revenue of these pharmaceutical companies. If no legal action is taken, along these lines, and the WTO compromise is insufficient to solve the COVID-19 vaccine shortages in the developing world, then the developed countries will be opening the gate to PRC delivery of their COVID-19 vaccine to the entire developing and emerging markets. © 2022 World Scientific Publishing Company.

Foreign divestment, economic growth and development in South Africa: an empirical analysis

PurposeThe purpose of this study is to investigate the effect of foreign direct divestments (FDD) on economic growth and development in South Africa for the period 1991–2019.Design/methodology/approachThe non-linear autoregressive distributed lag technique is used for the empirical analysis. Two regression models are specified, one for economic growth and the other for development which is proxied by poverty.FindingsThe empirical results suggest that foreign divestments are detrimental to both economic growth and development. Furthermore, the results suggest that the negative effects of foreign divestments outweigh the positive effects of FDI inflows.Practical implicationsSouth African policymakers should thus use policies that promote the retention of FDI inflows together with those that attract inflows. Furthermore, policies that promote economic freedom such as transparency and reduction in the time frame for granting government permits for business operations are also of paramount importance.Originality/valueMost of the available literature on FDD focuses on the firm perspective. Available studies on the effect of FDD on economic growth do not investigate the effect of divestment on economic development. Economic growth is a necessary but not a sufficient condition for the achievement of socioeconomic development.

The Arab Spring and Its Implications for FDI Inflows to the MENA Region

The Arab Spring (AS) marked an unprecedented event in the Middle East and North Africa (MENA) region, and it generated political and economic uncertainties and triggered violent conflicts and political rifts. This paper empirically examines the short-run and long-run effects of the AS on foreign direct investment (FDI) inflows to the MENA region and to individual MENA countries. The empirical analysis is implemented through the generalized method of moments (GMM) estimator for dynamic panel models, using different empirical specifications. The benchmark results show that the AS has led to important reductions in FDI inflows to the MENA region. A more detailed empirical analysis reveals significant variations in the AS effects on FDI inflows across MENA countries and it underscores distinct patterns over different time periods. These findings imply that governments in the MENA region are required to maintain political stability, and to adopt distinctive policies that lessen the adverse implications of the AS and that set favorable conditions for FDI inflows in the post-COVID-19 pandemic era.

COVID-19 crisis and the automotive industry in Mexico: public policies and firm strategies

The automotive industry's performance in Mexico was affected by the health and economic SARS-CoV2-crisis. As part of the complex North American supply chain, several factors influenced decision-making on crisis management. We determined the multilevel governance mechanisms to characterise the process of implementing activities. The productive performance of the industry, capacity utilisation rate per plant, employment, and foreign direct investment were evaluated. The federal government's support was scarce, although subnational governments were more sensitive to cooperate with stakeholders. Companies had to adapt to pandemic conditions and also to changes in the political and institutional environment driven by the USMCA and tensions between the USA and China. As a result, inward FDI flows and nearshoring practices are growing in the northern Mexican regions, stabilising the supply chains.

FDI and Wellbeing: A Key Node Analysis for Psychological Health in Response to COVID-19 Using Artificial Intelligence.

Developing countries are primary destinations for FDI from emerging economies following the World Investment Report 2022, including destinations in OECD countries. Based on three theoretical lenses and case analyses, we argue that Chinese outward FDI has impacts on wellbeing in destination countries, and that this is an important issue for psychological health in response to COVID-19. Based on the super-efficiency DEA approach, our study investigated the impact of Chinese outward FDI on wellbeing in OECD countries. We also applied a Tabu search to identify country groups based on the relationship between Chinese outward FDI and wellbeing and we developed a key node analysis of the country groups using an immune algorithm. This research has implications for public administrators in global governance and could help shape FDI policies to improve psychological health of the destination countries in response to COVID-19.

The Effect of COVID-19 on Foreign Direct Investment

This study empirically examines how the coronavirus disease (COVID-19) has impacted foreign direct investment (FDI), using the quarterly data on bilateral FDI flows from 173 home to 192 host economies from the first quarter of 2019 to the second quarter of 2021. The severity of COVID-19 in host economies adversely affected FDI in the manufacturing sector regardless of the entry mode, but the effect of home economies' COVID-19 situation on FDI was insignificant. On the other hand, in the services sector, the severity of COVID-19 in both host and home economies has significantly negative impact on greenfield FDI, not on cross-border M&A.

Mapping MNEs in Cuba and barriers to their growth

Very little is known about the investment climate and operations of MNEs in Cuba due to limited data provided by the Cuban government. In this paper, we explore the investment climate in Cuba and identify factors that limit the activities of MNEs. We also assess the impact of the COVID-19 pandemic and the future prospects for MNEs in Cuba. Our research is based on question-naires and semi-structured interviews in MNEs operating in Cuba. MNEs consider low macroeconomic stability, the impossibility of acquiring real estate, access to financing and the movement of capital, and profit repatriation as the most problematic factors for their business activities. On the other hand, IPR protection, corruption, the skills and education of the available workforce and the availability of electricity were assessed as the least problematic. Less than half of the MNEs interviewed found positive changes con-cerning the investment climate in Cuba during recent years. This implies limited prospects for economic growth in the near future.

The evolution of digital MNEs: an empirical note

UNCTAD first published a list of the top 100 digital multinationals in the World Investment Report 2017. This research note builds on the analysis and conceptual framework on digitalization and foreign direct investment set out in that report. It provides an updated list, allowing for an analysis of trends over the five-year period including the COVID-19 pandemic and adds new features to the data set that will be exploited in forthcoming UNCTAD work. The note describes the methodology to create the new and extended data set and points at possible avenues for further work. The purpose of the research note is to provide academic scholars with the basic elements needed to pursue further research in this field. © 2022 UNCTAD United Nations Conference on Trade and Development. All rights reserved.

Spatial and temporal distances in a virtual global world: Lessons from the COVID-19 pandemic.

The experience of COVID-19 prompted us to rethink the imperatives of distance for the organization of value-creating activities globally. We advance a conceptualization of distance as representing separation in both space and time and posit that these distance dimensions represent different kinds of separation and require varied theoretical attention. We delineate the intrinsic qualities of spatial and temporal distances and theorize the impact of this extended conceptualization of distance on major tenets of international business theory and their predictions regarding the patterns of international business activity. We illustrate the ways by which varying configurations of spatial and temporal distances serve different value-creating activities and draw their implications for countries' global integration. We advance a call for more attention to time and temporal distance and their impact on the ways firms organize their value-creating activities in an increasingly virtual world.

L'expérience de COVID-19 nous a incités à repenser les impératifs de la distance pour l'organisation d'activités créatrices de valeur au niveau mondial. Nous conceptualisons la distance comme un construit représentant la séparation à la fois dans l'espace et dans le temps, et postulons que ces dimensions de la distance représentent différents types de séparation et nécessitent une attention théorique variée. Nous spécifions les qualités intrinsèques des distances temporelles et spatiales, et théorisons l'impact de cette conceptualisation étendue de la distance sur les principaux principes de la théorie des affaires internationales et leurs prédictions en matière de configurations d'activité en commerce international. Nous illustrons les façons dont diverses configurations de distances spatiales et temporelles servent différentes activités créatrices de valeur, et élaborons les implications pour l'intégration mondiale des pays. Nous appelons à accorder davantage d'attention au temps et à la distance temporelle, ainsi qu'à leur impact sur la manière dont les entreprises organisent leurs activités créatrices de valeur dans un monde de plus en plus virtuel.

La experiencia de COVID-19 nos instó repensar los imperativos de la distancia para la organización de actividades de creación de valor a nivel mundial. Avanzamos una conceptualización de la distancia como representación de la separación tanto en el espacio como en el tiempo y planteamos que estas dimensiones de la distancia representan diferentes tipos de separación y requieren una atención teórica variada. Delineamos las cualidades intrínsecas de las distancias espaciales y temporales y teorizamos el impacto de esta conceptualización ampliada de la distancia en los principales postulados de la teoría de los negocios internacionales y sus predicciones en relación con los patrones de la actividad de negocios internacionales. Ilustramos el modo en que las distintas configuraciones de las distancias espaciales y temporales sirven para diferentes actividades de creación de valor y extraemos sus implicaciones para la integración global de los países. Hacemos un llamamiento para que se preste más atención a la distancia temporal y al tiempo y a su impacto en la forma en que las empresas organizan sus actividades de creación de valor en un mundo cada vez más virtual.

A experiência do COVID-19 nos levou a repensar os imperativos de distância para a organização de atividades de criação de valor globalmente. Avançamos uma conceituação de distância como representação de separação tanto em espaço quanto em tempo e postulamos que essas dimensões de distância representam diferentes tipos de separação e requerem atenção teórica distinta. Delineamos as qualidades intrínsecas das distâncias espaciais e temporais e teorizamos o impacto dessa conceituação estendida de distância nos principais pilares da teoria em negócios internacionais e suas previsões a respeito dos padrões de atividade em negócios internacionais. Ilustramos formas pelas quais distintas configurações de distâncias espaciais e temporais atendem a diferentes atividades de criação de valor e descrevemos suas implicações para a integração global de países. Propomos um apelo por maior atenção a tempo e distância temporal e seu impacto nas maneiras pelas quais empresas organizam suas atividades de criação de valor em um mundo cada vez mais virtual.

Foreign direct investment under uncertainty evidence from a large panel of countries

We examine the effect of uncertainty on foreign direct investment inflows for advanced, emerging market and developing countries over a 25-year long (pre-Covid) sample. Using a push-pull framework, and controlling for both global and local factors, we find policy uncertainty has discernable and significant effects on inflows, varying in strength and direction between different groups of countries. Moreover, it is not host country uncertainty that seems to matter the most, but rather global uncertainty. Additionally, we find that high levels of uncertainty matter disproportionately. Finally, financial openness accentuates the impact of uncertainty for emerging market and developing countries.

Pandemic arbitrage in foreign direct investments: A perspective on the modes of entry

Foreign direct investments (FDI) are considered long-term and less sensitive to global shocks as they involve large amounts of capital investment that are costly to reverse. This study examines whether there was a reallocation of FDI flows from destination markets more affected by the pandemic, resulting in a pandemic arbitrage. Using bilateral FDI inflows data from January 2019 to December 2020, we show that FDI flows declined to destination markets that performed worse than source markets in COVID-19 infection rates, with the effect more evident in greenfield FDI. Our results also show that bilateral colonial ties and destination market COVID-19 policy stringency impact the pandemic arbitrage in FDI flows, especially for M&As.

Impacts of epidemics on innovation: An empirical analysis

Using data from 112 countries from 1998 to 2018, this study quantifies the overall impact of epidemics on innovation and identifies the underlying channels. Our results show that a 1% increase in the severity of an epidemic can significantly lead to a 0.059% decrease in patent applications and a 0.092% decrease in trademark applications. This negative impact can be explained by GDP, population and R & D expenditure channels. Further, our findings indicate that an increase in international personnel exchange (IPE) and foreign direct investment (FDI) can mitigate this negative impact. Finally, we discuss the policy implications of our results.

Growth and Causality between Fdi and Gdp: An Empirical Study in Africa

FDI flows to Africa reached $83 billion a record level in 2021, from $39 billion in 2020, due to a large corporate reconfiguration in South Africa. Global FDI flows in 2021 were $1.58 trillion, up 64 per cent from the level during the first year of the COVID-19 pandemic of less than $1 trillion. During 1994-2020, Africa, FDI growth was registered about 1.64 per cent per annum and significant at 1 per cent level. In Africa, all the regions having positive growth rate and statistically significant at 5 per cent level. In this paper, employ Johansen co-integration as well as Granger Causality test' for FDI and GDP during 1994-2020, before examining these two tests we used Augmented Dickey-Fuller (ADF) test for the stationarity. From the ADF test, the tests were carried out for the series LnFDI and LnGDP. The results shows that LnFDI, and LnGDP are non-stationary at level, but the first difference appropriate significant level. Johansen Co-integration test results reveals;FDI and GDP have long run Co-integration in the entire Africa continent, Central and North Africa regions, remaining, there is no co-integration is accepted. From the Granger causality test results indicates Africa and Southern Africa region, LNGDP is LNFDI granger reason, and also LNFDI is LNGDP granger reason, which indicates that there is direct Granger causality relationship between total Africa continent FDI & GDP and also GDP & FDI. In western Africa region, there is direct Granger causality relationship between GDP and FDI, but there is no Direct Granger causality relationship between FDI and GDP. Copyright © 2022, Anka Publishers. All rights reserved.

NONLINEAR DEPENDENCE BETWEEN ECONOMIC POLICY UNCERTAINTY AND FDI INFLOWS IN CHINA

Foreign direct investment (FDI) is the most reliable form of international capital flows, and it may be notably prone to increased uncertainty because of its high fixed costs. In this paper, we use the rolling window causality and the quantile-based Granger causality method to investigate the nonlinear dependence between economic policy uncertainty (EPU) and foreign direct investment (FDI) inflows in China for the period between 1999:M06 to 2021:M12. The empirical findings of the study show that EPU exerts a negative impact on FDI inflows during the majority of the time periods that have been studied. However, during the U.S subprime crisis in US, the effect was positive. That is, it can be inferred that the FDI inflows are not always hampered by the Chinese government's economic policy uncertainty. We enlarged our study with the quantile-based Granger causality method to assess robustness. In view of the recent dynamic economic condition and COVID-19 pandemic, the results suggest China's government should focus on more openness and improving its domestic business environment to enhance foreign investors' trust and avoid a possible drop-off in FDI inflows. © 2022, Bucharest University of Economic Studies. All rights reserved.

The Effect of the COVID-19 Pandemic on Inward FDI in Vietnam

Using monthly inward foreign direct investment (FDI) data for the period from January 2020 to September 2021, our study aims to investigate how the COVID-19 burden (cases and deaths) and policy responses of Vietnam and 40 investment partners affected Vietnam’s FDI attraction. Estimates for the baseline models as well as for different types of income levels show that Vietnam’s COVID-19 burden negatively affects its inward FDI, while no evidence reveals the effect of investment partners’ COVID-19 burden. We find that Vietnam’s COVID-19 cases negatively affect its inward FDI from the European region, while no evidence reveals an effect from the Asian region. When including policy responses in the estimation, we find a disadvantageous impact of investment partners’ COVID-19 cases and deaths as well as Vietnam’s COVID-19 deaths on Vietnam’s inward FDI. In general, the effects of COVID-19 cases are significantly lower than those of COVID-19 deaths. Estimates show that stringent measures in Vietnam and investment partners negatively affect FDI flows into Vietnam, while containment and health measures have a positive effect. The study suggests that efforts should focus on reducing the number of COVID-19 deaths rather than the number of COVID-19 cases, minimizing the application of stringency measures by Vietnam and investment partners, applying health methods, and expanding trade agreements networks. © 2022 International Management Institute, New Delhi.