IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v15y2022i10p468-d944598.html
   My bibliography  Save this article

The Uneven Short-Run Effects of the COVID-19 Pandemic on Foreign Direct Investment

Author

Listed:
  • Roxana Wright

    (School of Business, Plymouth State University, 17 High Street, Plymouth, NH 03264-1595, USA)

  • Chen Wu

    (School of Business, Plymouth State University, 17 High Street, Plymouth, NH 03264-1595, USA)

Abstract

This study examines short-run economic and business impacts of the COVID-19 pandemic as a global disruption event. The purpose is to build propositions about specific subnational FDI (Foreign Direct Investment) developments in the short-term of global disturbance. We approach the investigation by reviewing FDI outcomes in the year prior and in the first year of the pandemic, at the U.S. national and subnational levels, and through the lens of local characteristics and FDI outcomes in the state of New Hampshire. Our methods include distribution and frequency analyses on two sets of data: secondary data on FDI and trade at the state level, and primary data as direct observations on firm activities in New Hampshire. Our leading method is the evaluation of data aimed at triangulating and consequently generating a set of propositions that explain phenomena observed in relation to short-term effects of disruption. Our methodological tools consist of an in-focus instance of the phenomena in one state, as a particular case for verifying the validity of our propositions, and comparisons with available data across states to establish the reliability of the proposed consequences. Our analysis provides evidence for subnational heterogeneity of global disruption impact. Our interstate trend analysis and unique data on FDI-related activities in New Hampshire reveal how foreign businesses respond to the external shock of global disruption in the short-run. We use our insights to propose that established regional supply chains and differences in local advantages determine varying FDI outcomes across subnational locations. As a result, we set forth three calls-to-action for regional policymakers: the development of initiatives to support strong trade and FDI-outcomes at all times and in preparation for global disruption; the promotion and facilitation of firms’ access to markets; and the implementation of actions that encourage the establishment of regional supply chains.

Suggested Citation

  • Roxana Wright & Chen Wu, 2022. "The Uneven Short-Run Effects of the COVID-19 Pandemic on Foreign Direct Investment," JRFM, MDPI, vol. 15(10), pages 1-21, October.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:10:p:468-:d:944598
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/15/10/468/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/15/10/468/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David B. Audretsch & Erik E. Lehmann & Nikolaus Seitz, 2021. "Amenities, subcultures, and entrepreneurship," Small Business Economics, Springer, vol. 56(2), pages 571-591, February.
    2. Demir Firat & Wu Chen, 2017. "Exchange Rate Adjustments and US Trade with China: What does a State Level Analysis Tell Us?," Global Economy Journal, De Gruyter, vol. 17(2), pages 1-14, June.
    3. Roxana Wright, 2020. "International Business Expansion: The Roles of Affiliation and Ownership," International Journal of Business, Economics and Management, Conscientia Beam, vol. 7(6), pages 427-441.
    4. Ari Van Assche & Sarianna Lundan, 2020. "From the editor: COVID-19 and international business policy," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 273-279, September.
    5. Sarianna Lundan & John Cantwell, 2020. "The local co-evolution of firms and governments in the Information Age," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(9), pages 1516-1528, December.
    6. Roxana Wright, 2020. "International Business Expansion: The Roles of Affiliation and Ownership," International Journal of Business, Economics and Management, Conscientia Beam, vol. 7(6), pages 427-441.
    7. Stephen J. Kobrin, 2020. "How globalization became a thing that goes bump in the night," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 280-286, September.
    8. Diletta Pegoraro & Lisa Propris & Agnieszka Chidlow, 2022. "Regional factors enabling manufacturing reshoring strategies: A case study perspective," Journal of International Business Policy, Palgrave Macmillan, vol. 5(1), pages 112-133, March.
    9. Khlystova, Olena & Kalyuzhnova, Yelena & Belitski, Maksim, 2022. "The impact of the COVID-19 pandemic on the creative industries: A literature review and future research agenda," Journal of Business Research, Elsevier, vol. 139(C), pages 1192-1210.
    10. Nadia Doytch & Nishant Yonzan & Ketan Reddy & Filip De Beule, 2021. "Tracking Greenfield FDI During the COVID-19 Pandemic: Analysis by Sectors," Foreign Trade Review, , vol. 56(4), pages 454-475, November.
    11. Sébastien Miroudot, 2020. "Reshaping the policy debate on the implications of COVID-19 for global supply chains," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 430-442, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roxana Wright, 2022. "Subsidiary Activities: Parent Company and Local Predictors of Business Resilience ," GATR Journals jber226, Global Academy of Training and Research (GATR) Enterprise.
    2. Sébastien Miroudot, 2020. "Reshaping the policy debate on the implications of COVID-19 for global supply chains," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 430-442, December.
    3. Christofi, Michael & Zahoor, Nadia & Hadjielias, Elias & Adomako, Samuel, 2024. "Business model innovation and international performance of emerging market international businesses," Journal of International Management, Elsevier, vol. 30(1).
    4. Suzana B. Rodrigues & John Child, 2023. "The role of corporations in addressing non-market institutional voids during the COVID-19 pandemic: The case of an emerging economy," Journal of International Business Policy, Palgrave Macmillan, vol. 6(1), pages 115-132, March.
    5. James X. Zhan, 2021. "GVC transformation and a new investment landscape in the 2020s: Driving forces, directions, and a forward-looking research and policy agenda," Journal of International Business Policy, Palgrave Macmillan, vol. 4(2), pages 206-220, June.
    6. Ali Zackery & Joseph Amankwah-Amoah & Zahra Heidari Darani & Shiva Ghasemi, 2022. "COVID-19 Research in Business and Management: A Review and Future Research Agenda," Sustainability, MDPI, vol. 14(16), pages 1-32, August.
    7. Matevž (Matt) Rašković & Katalin Takacs Haynes & Anastas Vangeli, 2024. "The emergence of populism as an institution and its recursive mechanisms: A socio-cognitive theory perspective," Journal of International Business Policy, Palgrave Macmillan, vol. 7(1), pages 19-40, March.
    8. Yosr Ben Tahar & Nada Rejeb & Adnane Maalaoui & Sascha Kraus & Paul Westhead & Paul Jones, 2023. "Emotional demands and entrepreneurial burnout: the role of autonomy and job satisfaction," Small Business Economics, Springer, vol. 61(2), pages 701-716, August.
    9. Alexander Schiersch & Irene Bertschek & Thomas Niebel, 2023. "Diversify or Not? – The Link between Global Sourcing of ICT Goods and Firm Performance," Discussion Papers of DIW Berlin 2043, DIW Berlin, German Institute for Economic Research.
    10. Xingwei Li & Jiachi Dai & Jinrong He & Jingru Li & Yicheng Huang & Xiang Liu & Qiong Shen, 2022. "Mechanism of Enterprise Green Innovation Behavior Considering Coevolution Theory," IJERPH, MDPI, vol. 19(16), pages 1-19, August.
    11. Roberta Capello & Andrea Caragliu, 2021. "Regional growth and disparities in a post‐COVID Europe: A new normality scenario," Journal of Regional Science, Wiley Blackwell, vol. 61(4), pages 710-727, September.
    12. Delios, Andrew & Li, Jiatao & Schotter, Andreas P.J. & Vrontis, Demetris, 2024. "Challenging the orthodoxy in international business research: Directions for “new” research areas," Journal of World Business, Elsevier, vol. 59(4).
    13. Bhukya, Ramulu & Paul, Justin, 2023. "Social influence research in consumer behavior: What we learned and what we need to learn? – A hybrid systematic literature review," Journal of Business Research, Elsevier, vol. 162(C).
    14. Ingyu Oh & Kyeong-Jun Kim & Chris Rowley, 2023. "Female Empowerment and Radical Empathy for the Sustainability of Creative Industries: The Case of K-Pop," Sustainability, MDPI, vol. 15(4), pages 1-18, February.
    15. Paola Perez-Aleman & Tommaso Ferretti, 2023. "Creating innovation capabilities for improving global health: Inventing technology for neglected tropical diseases in Brazil," Journal of International Business Policy, Palgrave Macmillan, vol. 6(1), pages 84-114, March.
    16. Jan Anton van Zanten & Rob van Tulder, 2020. "Beyond COVID-19: Applying “SDG logics” for resilient transformations," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 451-464, December.
    17. Sarianna Lundan & Gunnar Leymann, . "Investing in sustainable infrastructure: new directions for international business research," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    18. Ari Van Assche, 2021. "Shortages in essential goods: Are global value chains part of the problem or the solution?," SPP Communique, The School of Public Policy, University of Calgary, vol. 14(17), May.
    19. Agnihotri, Arpita & Bhattacharya, Saurabh & Jafari-Sadeghi, Vahid, 2023. "Combatting global disruption through tertius iungens orientation of CEOs: A moderated-mediated mechanism," Journal of International Management, Elsevier, vol. 29(5).
    20. Vera Kunczer, 2024. "The six faces of globalization: who wins, who loses, and why it matters," Journal of International Business Policy, Palgrave Macmillan, vol. 7(3), pages 391-394, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:15:y:2022:i:10:p:468-:d:944598. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.