There was considerable public scrutiny of the Obama Administration's performance in its inaugural year, but comparatively little focus on one of the Administration's key processes governing the flow of investment into the United States — namely, the Committee on Foreign Investment in the United States (CFIUS). Yet, this is a frequent question we receive from foreign investors -- has the change in the administration affected CFIUS?
Topic:
Economics, International Trade and Finance, Monetary Policy, Foreign Direct Investment, and Financial Crisis
Hitherto, political risk has worried developed country multinational enterprises (MNEs) investing in developing country markets. But as more emerging market firms invest overseas, they too must grapple with this subject. World Investment and Political Risk 2009 looks at this issue for the first time and finds that Brazilian, Russian, Indian, and Chinese (BRIC) firms appear to worry more about political risk than global counterparts. Though these results are based on as mall sample of 90 of the largest BRIC investors, they are thought-provoking nonetheless.
Topic:
International Political Economy, International Trade and Finance, and Foreign Direct Investment
Using new international comparable data on intangible capital investment by business within a panel analysis from 1995-2005 in an EU-15 country sample, we detect a positive and significant relationship between intangible capital investment by business and labour productivity growth. This relationship is cross-sectional in nature and proves to be robust to a range of alterations. Our empirical analysis confirms previous findings that the inclusion of business intangible capital investment into the asset boundary of the national accounting framework increases the rate of change of output per worker more rapidly. In addition, intangible capital is able to explain a significant portion of the unexplained international variance in labour productivity growth and when incorporating business intangibles, capital deepening becomes an even more significant source of growth. The relationship is slightly stronger in the time period 1995-2000 and seems to be driven by the coordinated countries within the EU-15.
Topic:
Economics, International Trade and Finance, Regional Cooperation, Monetary Policy, and Financial Crisis
Several policy-relevant issues regarding the EU's bilateral investment treaties (BITS) are addressed in this paper. First and foremost, we explore the question of whether EU's BITs have a significantly positive impact on outflows or not. Second, we ask the question which member states and which BIT partners have had a significant experience after the implementation of the BIT. In our sample we find that both OECD BITs and EU BITs have a statistically significant and positive impact on FDI outflows. This result is robust to the inclusion of variables such as privatisation proceeds that control for the level of economic reform, the level of trade linkages, the level of democratic freedom and a measure of risk of expropriation among other standard controls. We control for endogeneity in our estimations by using the fixed-effects estimator as our preferred estimator on a large panel dataset. We also test the strict exogeneity of our results by using a method suggested by Baier and Bergstrand (2007) and we find no feedback effect in our sample.
Topic:
Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
Trust in the ECB, as measured by the standard Eurobarometer (and other) surveys has fallen to an unprecedented low – especially in the larger euro area countries. The authors find that up to the start of the recession in 2008, trust in the ECB was little affected by business cycle variables such as growth and inflation. This changed radically with the recession, with trust in the ECB becoming correlated quite closely with growth. However, even the recovery of growth in 2009 was not sufficient to restore trust in the ECB to previous levels. This finding implies that European citizens seem to have placed a heavy share of the blame on the European Central Bank for the real economic downturn caused by the financial crisis.
Topic:
Economics, International Trade and Finance, and Monetary Policy
Using a world trade model with India subdivided into states, the paper examines how regional disparities are affected by domestic inter-state trade as well as international trade. According to the analysis, international liberalisation promotes decentralisation and convergence, not divergence, so trade is not to blame for India's growing regional disparities. High economic growth within India makes domestic markets more important and the geographical effect of this is opposite to that of globalisation. This may counterbalance the geographical impact of international liberalisation and explain why recent changes in geographical clustering in India are limited. The empirical results are consistent with this. They also indicate that Indian services expansion is largely driven by increases in domestic demand due to growth, and that domestic market integration is essential for India's manufacturing sector. We argue that for larger nations, the domestic inter-regional trade is important and India should have a trade policy that addresses domestic as well as international market integration.
Topic:
Development, Globalization, and International Trade and Finance
The recent economic crisis, 2008–2009,is commonly characterized as the worst since the Great Depression of 1929–1933. This recent crisis, called also the Great Recession, seems to form a turning-point in the global economic governance and the development of the world economy.
Topic:
Economics, Globalization, International Trade and Finance, and Financial Crisis
Over the last four decades, Brazil has transformed its agricultural sector to become the first tropical agricultural giant and the first to challenge the dominance of the world's major food exporters. This paper examines the secrets of Brazil's success and ponders whether Asia should try to emulate the Brazilian model to help achieve food security for its people and contribute to an increased level of selfsufficiency in the region.
Topic:
Agriculture, International Trade and Finance, and Food
Diehard believers in Turkey's European future had, for a brief moment, hung their hopes on the European Parliament (EP) as the key to unlocking the poisonous stalemate in Turkey's ailing accession process. The glimmer of light had come with the Lisbon Treaty, which could have been used to unblock the stalemate over the Direct Trade Regulation (DTR) between the EU and northern Cyprus by granting a voice to the EP on the matter. Breaking the stalemate would not have magically removed all obstacles to Turkey's protracted accession process. But it would have breathed new life and instilled a dose of much-needed optimism in the troubled relations between Turkey and the Union. Alas, that opportunity has been lost and, with it, the short-term hope of a rosier future for Cyprus, Turkey and the EU as a whole.
Topic:
Conflict Resolution, International Trade and Finance, and Treaties and Agreements