Home country impact on Outward FDI from India

The altering policy environment in emerging markets and the surge in their outward foreign direct investment (OFDI) calls for an empirical investigation. Accordingly, this paper examines the effect of home country macroeconomic conditions and Government policies on the OFDI flows from India during the period 1984 to 2015. Incorporating the structural breaks in the empirical model, results indicate the existence of a long-run relationship between OFDI flows and home country macroeconomic and Government policies. Government policies relating to foreign trade and investment and financial sector development are found to be significant determinants. The results also suggest the need for the Government to enhance its effort on the development of knowledge infrastructure in order to support the OFDI from India's manufacturing sector and thereby contribute to the success of “Make in India” programme. Policy implications are discussed.     

中印两国对外投资比较研究

本文主要分析中印两国自20世纪80年代以来的对外投资发展进程,比较和证实两国不同类型的对外投资机制,即中国政府主导型和印度私人企业主导型的投资方式所产生的不同投资效果和国际影响。     

美印经贸关系的现状、特点及前景

近年来，美印经贸关系取得了长足进展，突出表现是贸易和投资领域发展快速、高科技和能源领域合作成为亮点、经济互补性强以及合作走向机制化。美印经贸关系的进一步发展面临印度经济环境欠佳、双边贸易摩擦不断以及知识产权纠纷等很多问题，但在相互战略需求和经济利益驱动等因素的作用下，美印经贸关系将会持续稳定发展。     

Effects of China's recent development in the rest of the world: With special attention to Latin America

In one respect, China's economic awakening is bad for those economies that have been technological ahead of China and that China is now catching up to. The special feature of China's advance in recent decades has been its harnessing a high volume of Chinese saving to domestic investment projects involving technology transfer through cooperative arrangements with overseas corporations in the West, especially the US. The openness of export markets to China has served to amplify the resulting investment opportunities. The result has been a phenomenal increase of productivity and of the supply of exports. The negative effect for the US and other advanced economies in the West stems from the resulting import substitution by China, thus a decline in overseas demand for US exports, hence a deterioration in the US terms of trade and resulting decline in the real factor rewards that US producers can afford to pay to domestic inputs, including labour, particularly low-skill manufacturing labor. Of course, there are in other respects some important gains for the West from China's commercial success and economic development.     

The impact of India’s food security policy on domestic and international rice market

Food security policy making in India is at crossroads. India has emerged as a leading rice exporter. The Government of India has introduced the National Food Security Act which requires 33.6 million tons of rice per year for its public food distribution system. In this study, we modeled India’s rice market and analyzed policy implications of the long-term impact of India’s food security act on domestic and international rice market. We developed a structural economic demand and supply model for India’s rice market and further added subsidy equations to trace the consequence of National Food Security Act on domestic rice consumption and on the international market. We specifically focus on three different scenarios: subsidy as price effect, subsidy as inelastic income effect, and subsidy as elastic income effect under the broader framework of National Food Security Act. We found that at the end of the projection period (2024–2025), as a result of rice subsidy program, the consumption of rice increases significantly in the case of price effect while the inelastic income effect has no or less impact on production, consumption, and export of rice. Hence, the policy implication of our study is that if the objective of the National Food Security Act is to increase consumption then it needs to be implemented as price effect.     

Sectoral FDI inflows and domestic investments in Pakistan

In this paper, for the first time, we analyze the relation of sectoral FDI with domestic investment in Pakistan by using ARDL cointegration technique over a period of 1980–2012. Empirical findings show that aggregate FDI crowd in domestic investment, however, the effects of aggregate FDI on domestic investment in Pakistan cannot be generalized. The impact of FDI on domestic investment varies across sectors. The empirical findings in the study at sectoral level suggests that FDI in manufacturing and services sectors crowd in domestic investment while FDI in primary sector assert insignificant impact on domestic investment in Pakistan. Analyzing the reverse causal impact running from domestic investment to FDI, this study confirm that domestic investment is important in attracting FDI across the board in all the three sectors i.e. primary, manufacturing and services sectors. The positive role of FDI in manufacturing and services sectors and supportive role of indigenous investment infrastructure is of utmost importance for FDI to promote domestic investment in Pakistan.     

Applied general equilibrium modeling for long-term energy policy in Germany

The energy model is based on an extension of applied general equilibrium models of the Leontief input-output type, first implemented by Hudson and Jorgenson (1974). One objective of our project is to choose specifications of sectoral production and cost functions that permit us to estimate the unknown parameters of the price functions and input demand functions from a single input-output table in ten energy and 35 non-energy industries. Our second objective is to determine the price for capital and labor as well as the components of final demand endogenously instead of using a separate growth model as an engine for the economic development. Our third objective is to combine the concept of price-dependent substitution within the input structure with the concept of vintage coefficients for the latest plants. By this we incorporate into the input-output analysis the effect on growth as a result of investment, the effect on capacity as a result of new plants, and the effect on prices as a result of new technologies. An application of the model shows the long-term impact on growth and prices under alternative technologies in the electricity industry (nuclear or coal-fired power plants).     

The Transnational Organization of Production and Environmental Degradation: A Cross‐National Study of the Effects of Foreign Capital Penetration on Water Pollution Intensity, 1980–1995*

Objective. This study attempts to increase our understanding of the environmental impacts of the transnational organization of production in the context of foreign capital penetration. Methods. With a sample of 53 countries, panel analyses using OLS and robust regression are conducted to assess the effects of foreign direct investment in the manufacturing sector on growth in organic water pollution intensity, 1980–1995. Slope‐dummy interaction variables are used to compare the effects in developed countries and less‐developed countries. The tested models include a variety of relevant controls, such as domestic investment, state environmentalism, size of the manufacturing sector, and level of economic development. Results. Findings for the analyses indicate that foreign direct investment in manufacturing positively affects growth in organic water pollution intensity in less‐developed countries, while the effect in developed countries is nonsignificant. Conclusions. This research illustrates the need for social scientists to investigate the environmental impacts of both the transnational organization of production and the overall scale of production in different sectors.     

印度在南亚经济合作中的作用

印度的地区和自身经济发展政策深刻影响了南亚经济合作进程。近20年来,印度对南亚经济合作的重视逐渐超过对政治、安全问题的顾虑。在其积极推动下,南亚经济联系有所加强,地区经济合作机制不断完善。但经济融合的整体水平仍不尽如人意,表现出内聚力弱、外向性强的特点。总体而言,印度在地区贸易和投资合作中发挥的作用较为有限。究其原因,主要包括印度与南亚其他国家产业基础差距较大,贸易互补性不强;贸易成本较高;南亚其他国家对印度的投资吸引力较弱,以及地区政治、安全因素干扰等。     

Public investment and growth: Lessons learned from 60-years experience in Southern Italy

This article analyses the contribution of public investment to economic growth in Southern Italy in the second half of the twentieth century (1951–2011). The Bai–Perron tests suggest that economic growth followed three distinct regimes: accelerated growth in the years 1951–1973 (average growth rate 5.3%); low growth in the period 1974–1995 (average growth rate 1.6%); zero growth on average after 1995. Using cointegration analysis, we find a positive effect of public investment on per unit of labour output of the Mezzogiorno in the whole period, 1951–2011. However, the estimates of the model show statistically significant parameters of public investment in the first regime, but not in the second regime, when economic growth is sustained by business investment and technical change. The last phase of growth sees the negative influence of the social and institutional environment on the functioning of the economy. The different impact of public investment on growth over time is ascribed to changes in the quality of institutions.     

Reserve financing and government infrastructure investment: An application to China

This paper proposes a novel financing scheme, reserve financing, for government infrastructure investment in China. A two-sector open economy model explores the consequences and policy implications of a surge in infrastructure investment financed by international reserves. The results show that reserve financing, coupled with a managed float exchange rate system, can maintain the country's fast growth rate while mitigating fiscal pressure on local governments. Productive infrastructure capital stimulates domestic demand, reducing the country's dependence on exports. To promote growth and maintain price stability, three factors are critical: return on infrastructure, swift fiscal adjustment, and rapid infrastructure financing.     

Internal Drivers and the Specialization Status of Under-developed Countries： Evidence from China＇s High-tech Industry

将增加值率和生产率作为跨国可比的国际分工地位度量指标,引入产品内分工分析框架中,刻画发展中国家产业的国际分工地位受国内技术创新、劳动力投入、资本投入,以及FDI溢出效应等因素的影响机理,并以中国高技术产业和企业的数据进行实证检验,结果表明：国内的技术创新以及物质资本和人力资本等要素的协同性提升,是提高中国高技术产业国际分工地位的关键性内部动力,而FDI溢出效应的作用相对有限。因而中国产业升级的关键,是要挖掘和培育内部动力,而非依赖于FDI的溢出效应。     

Social investment,social service and the economic performance of welfare states

This article begins with an examination of the role of social services as the key instrument of social investment strategy, presenting an empirical analysis of its impact on economic performance. A pooled time series, cross‐section analysis was conducted with the data of 15 welfare states from 1990 to 2007 under the ‘social investment hypothesis’ that more social service orientedness brings about a greater positive effect on the economy. The results show that a larger share of social service spending in the total social expenditure – more social service orientedness – contributes to economic growth and labour market performance, whereas a larger aggregate size of the welfare state may have a negative effect on employment. In conclusion, this study suggests that the relatively ambiguous welfare strategy of social investment could be clarified as a ‘transition from income security to livelihood security’ in which emphasis is placed on social service. Key Practitioner Message: ● This study suggests that the key instrument of social investment strategy is social service; ● The results show that more social service orientedness contributes to economic growth and labour market performance.     

Employment effects of a German workfare programme at the establishment level

We examined the impact of a German workfare programme for hard‐to‐place welfare recipients, the so‐called ‘€1‐jobs’, on staff in public and non‐profit establishments. We applied static and dynamic panel models using IAB Establishment Panel data from 2005 to 2013. To account for regional influences, we linked the establishment data to indicators at the district level. We identified a positive complementary effect on high‐skilled workers and a negative substitution effect on low‐skilled workers. We interpreted these findings as follows: In that €1‐jobs require highly skilled staff for management, instruction, qualification and support, this indicates that the programme generates jobs for skilled workers within the welfare‐to‐work industry. The negative effect that we found for low‐skilled workers suggests substitution effects between the programme participants and regular low‐skilled workers; although in this study, both effects were relatively small.     

Malaysia's outward FDI: The effects of market size and government policy

This paper extends the empirical literature of Malaysia's outward FDI (OFDI) by considering the impact of foreign market size and home international reserves using multivariate cointegration and error-correction modeling techniques. The empirical results reveal that there is a positive long-run relationship between Malaysia's OFDI and its key determinants, viz. foreign market size, real effective exchange rate, international reserves and trade openness. The main findings suggest that apart from the market-seeking incentive and the adoption of outward-oriented policies, the Malaysian government could also encourage OFDI by implementing liberal policy on capital outflows. On the basis of these findings, we draw some policy implications for the country's economic development and the internationalization of Malaysian firms in the era of globalization.     

观点和政策塑造：中国与印度在美国的游说行动对比

在国际关系领域中,中印两国对美国国内决策的影响越来越突出。一种比较典型的影响途径是游说集团。尽管中印都经常采用这一方式,然而两国的游说行动还存在差异。按照理性主义的观点,一切行为的基本特征都是对自身利益最大化的精密计算。本文通过案例分析的归纳方法来考察中印采取的游说措施,并使用国别观察的方法来区分双方游说的共同点与不同点,最后分析印度游说成功的原因,并就中国游说行动的改善提出建议。     

尼赫鲁政府的对华边界政策：分析框架

理解1949～1962年印度尼赫鲁政府的对华边界政策需要一个整合性的分析框架。它涵盖三条线索：当时在中印关系中日益凸显的西藏问题、印度国内政治和反对派,以及主要决策者尼赫鲁的认知与心理。上述因素交织在一起,直接催生了尼赫鲁政府在中印边界问题上变化的立场、目标以及追求目标的途径和行为方式。中印争议边界至今仍然处于悬而未决的状态,显示出解决这一问题的复杂性与艰巨性。对此既应该从各层面、更需要整体地认识和理解其历史和现实。     

India's surge in modern services exports: Empirics for policy

India's exports of modern services have grown consistently over the last three decades and more so since 1991. Sustaining modern services exports (MSEs), which in India enjoy comparative advantage, is important for sustaining service-led growth and maintaining stability on the external sector. In this context, we examine key drivers of India's surge in MSEs which have important implications for policy. The results reveal that endowment factors such as human capital, tele-density, financial development, physical infrastructure and institutions are the key drivers of India's MSEs along with the world demand, exchange rate and foreign direct investment. Therefore, India needs to focus on and speed up the ongoing reforms to improve supply side factors such as education, infrastructure, financial sector deepening, governance and broad-band tele-density to improve competitiveness of India's modern services exports.     

Capital goods imports and long-run growth: Is the Chinese experience relevant to developing countries?

In this paper, we analyze the role played by capital goods imports in the long-run growth of developing countries. We focus in the case of the Chinese economy in the last few decades. We find evidence that the ratio of imported to domestic capital goods, that is, the composition of investment, as well as the capital accumulation (both physical and human), was key determinants of the long-run growth rate of per capita GDP over the analyzed period. Furthermore, our results are also consistent with the hypothesis that the link between trade openness and long-run growth operates mainly through imports. This finding supports some recent developments of Schumpeterian models of growth, and the very specific economic policy recommendations arising thereof. In short, these models state that, in the early stages of growth, government intervention to encourage an investment-based strategy, with emphasis on large investment efforts and the adoption of foreign technology, could be an appropriate strategy for development.