IDEAS home Printed from https://ideas.repec.org/p/hhb/cbsint/2001-001.html
   My bibliography  Save this paper

Pattern of Foreign Direct Investment in Emerging Economies: An Exploration

Author

Listed:
  • Patibandla, Murali

    (Department of International Economics and Management, Copenhagen Business School)

Abstract

Until recently major part of FDI flows had been among developed economies with similar relative factor endowments, income levels and market institutions such as property rights regimes. Consequently, major theoretical streams of FDI in economics could simplify FDI as a substitute for intra-industry trade by incorporating transportation costs and economies of scale (multi-plants). In the recent years, developing economies have increased their share of FDI inflows significantly (40%). Explanation of magnitude and pattern of FDI into developing economies requires a complex ray of factors. This is because these economies differ significantly from developed economies and also among each other in economic development levels and endowment of market institutions. This paper attempts to develop a conceptual framework to explain pattern of FDI in developing economies by identifying the determinants on the supply and demand side and market institutional conditions. Differences in the endowment of the factors in a set determine the pattern of FDI in these economies. This paper illustrates this by taking the case study of China and India.

Suggested Citation

  • Patibandla, Murali, 2001. "Pattern of Foreign Direct Investment in Emerging Economies: An Exploration," Working Papers 1-2001, Copenhagen Business School, Department of International Economics and Management.
    • Handle: RePEc:hhb:cbsint:2001-001
    as

    Download full text from publisher

    File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/6553
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mark Casson, 1979. "Alternatives to the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-04645-4, October.
    2. Ahlstrom, David & Bruton, Garry D. & Lui, Steven S. Y., 2000. "Navigating China's changing economy: Strategies for private firms," Business Horizons, Elsevier, vol. 43(1), pages 5-15.
    3. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    4. Branstetter, Lee G. & Feenstra, Robert C., 2002. "Trade and foreign direct investment in China: a political economy approach," Journal of International Economics, Elsevier, vol. 58(2), pages 335-358, December.
    5. Sachs, Jeffery & Woo, Wing, 1997. "Understanding China'S Economic Performance," Harvard Institute for International Development (HIID) Papers 294390, Harvard University, Kennedy School of Government.
    6. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    7. Spiller, Pablo T, 1996. "Institutions and Commitment," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(2), pages 421-452.
    8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    9. Richard E Caves, 1998. "Research on International Business: Problems and Prospects," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(1), pages 5-19, March.
    10. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    11. David D. Li, 1996. "A Theory of Ambiguous Property Rights in Transition Economies: The Case of the Chinese Non-State Sector," William Davidson Institute Working Papers Series 8, William Davidson Institute at the University of Michigan.
    12. Robert Z. Aliber, 1993. "The Multinational Paradigm," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511517, April.
    13. Batra, Raveendra N & Ramachandran, Rama, 1980. "Multinational Firms and the Theory of International Trade and Investment," American Economic Review, American Economic Association, vol. 70(3), pages 278-290, June.
    14. Avinash Dixit, 2003. "Some Lessons from Transaction‐Cost Politics for Less‐Developed Countries," Economics and Politics, Wiley Blackwell, vol. 15(2), pages 107-133, July.
    15. Li, David D., 1996. "A Theory of Ambiguous Property Rights in Transition Economies: The Case of the Chinese Non-State Sector," Journal of Comparative Economics, Elsevier, vol. 23(1), pages 1-19, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chakraborty, Chandana & Rawlins, Glenville, 2004. "Financial resource flows, macro policy response, and the socio-economic environment: the experience of Latin America and East Asia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(4), pages 469-489, September.
    2. Oikonomou, Vlasis & Patel, Martin & Worrell, Ernst, 2006. "Climate policy: Bucket or drainer?," Energy Policy, Elsevier, vol. 34(18), pages 3656-3668, December.
    3. Lars WANG & Hidekazu ITOH, 2010. "Economic Effects of Information Technology Oriented Joint Ventures in China: A CGE Analysis," EcoMod2004 330600156, EcoMod.

    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. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Centre for Economic Performance, LSE.
    2. Xu, Chenggang & Zhang, Xiaobo, 2009. "The evolution of Chinese entrepreneurial firms: Township-village enterprises revisited," IFPRI discussion papers 854, International Food Policy Research Institute (IFPRI).
    3. Daron Acemoglu & Gino Gancia & Fabrizio Zilibotti, 2015. "Offshoring and Directed Technical Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(3), pages 84-122, July.
    4. Sean M. Dougherty & Robert H. McGuckin, 2001. "The Effect of Ownership Structure and Jurisdictional Governance on Productivity in Chinese Enterprises," Economics Program Working Papers 02-01, The Conference Board, Economics Program, revised Jan 2002.
    5. Pol Antràs, 2005. "Incomplete Contracts and the Product Cycle," American Economic Review, American Economic Association, vol. 95(4), pages 1054-1073, September.
    6. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
    7. Adolfo Cristóbal Campoamor, 2019. "Gradual trade liberalization in a North–South model of the product cycle," Journal of Economics, Springer, vol. 127(3), pages 265-292, August.
    8. Lai, Edwin L. -C., 2001. "Competition for foreign direct investment in the product cycle," Japan and the World Economy, Elsevier, vol. 13(1), pages 61-81, January.
    9. Grossman, Gene M & Helpman, Elhanan, 1991. "Endogenous Product Cycles," Economic Journal, Royal Economic Society, vol. 101(408), pages 1214-1229, September.
    10. Ito, Junichi, 2006. "Economic and institutional reform packages and their impact on productivity: A case study of Chinese township and village enterprises," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 167-190, March.
    11. Abdul Rauf & Ying Ma & Abdul Jalil, 2019. "Revisiting the Innovation-export Nexus using Industry-level Data: Evidence from China's Large- and Medium-sized Industrial Enterprises," International Journal of Economics and Financial Issues, Econjournals, vol. 9(3), pages 73-80.
    12. Stadler, Manfred, 2015. "Innovation, industrial dynamics and economic growth," University of Tübingen Working Papers in Business and Economics 84, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    13. Acemoglu, Daron & Gancia, Gino & Zilibotti, Fabrizio, 2012. "Competing engines of growth: Innovation and standardization," Journal of Economic Theory, Elsevier, vol. 147(2), pages 570-601.3.
    14. Lee, Seong-Hoon & Goo, Young-Wan, 2008. "Endogenous Income Distribution with Product Obsolescence," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 49(2), pages 75-90, December.
    15. Justin Yifu Lin, 2007. "Development and Transition : Idea, Strategy, and Viability," Development Economics Working Papers 22709, East Asian Bureau of Economic Research.
    16. Long, N.V. & Wong, K.Y., 1996. "Endogenous Growth and International Trade: A Survey," Working Papers 96-07, University of Washington, Department of Economics.
    17. Edwin L.-C. Lai, 2008. "Globalization of production and the technology transfer paradox," Working Papers 0810, Federal Reserve Bank of Dallas.
    18. Sonobe, Tetsushi & Hu, Dinghuan & Otsuka, Keijiro, 2006. "Industrial development in the inland region of China: A case study of the motorcycle industry," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 818-838, December.
    19. Edward John Ray, 1989. "The Determinants of Foreign Direct Investment in the United States, 1979-85," NBER Chapters, in: Trade Policies for International Competitiveness, pages 53-84, National Bureau of Economic Research, Inc.
    20. Anton Miglo, 2011. "The Development of Property Rights for Intellectual Property," Journal of Economics and Behavioral Studies, AMH International, vol. 3(4), pages 224-234.

    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:hhb:cbsint:2001-001. 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: Lars Nondal (email available below). General contact details of provider: https://edirc.repec.org/data/iicbsdk.html .

    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.