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Foreign Direct Investment and Environmental Pollution

On 09/10/2014, in Economics papers, by rain

As China’s economy continues to develop, continues to expand the scale of foreign direct Investment to China’s Economic growth impetus has played an important role, but at the same time, but also to China’s ecological environment have a certain negative impact on the environment as awareness of the protection of the continuous enhancement of capital flows and Environmental problems have become increasingly common concern from the community。This paper reviews in recent years on foreign direct Investment and the relationship between Environmental research, analysis of the reform and opening up since China’s utilization of foreign direct Investment in the total change, with regional distribution of environmental pollution and industrial distribution and an analysis of the situation, and then use our 29 Provinces and municipalities (excluding Tibet and Chongqing) of the 1992-2006 annual FDI data and indicators of environmental pollution, constructed an econometric model, a panel co-integration analysis and Granger test, this test between FDI and environmental pollution The correlation between the results of the study show that in the long term in industrial emissions and foreign direct investment, regional industrial solid waste and emissions of two-way foreign direct investment existence of the Granger Causality, and in the short term, the only industrial solid waste Emissions of foreign direct investment is the Granger causes at the same time this paper, a simple regression model, FDI and environmental indicators (mainly industrial waste emissions) to carry out further empirical analysis, the results were consistent with the Conclusion.Finally the article on China’s future in the introduction and utilization of FDI, how to avoid causing serious environmental pollution made the following policy recommendations: active participation, improvement of international legislation and build China’s Environmental Protection green barriers, vigorously develop the environmental protection industry, and promote the upgrading of the industrial structure and improve the structure of foreign investments in strengthening international exchanges and cooperation, environmental regulations play a restrictive role, effective control of environmental pollution, strengthen governmental supervision, and strengthen the environment for foreign investment Management and supervision system.

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An Analysis on FDI Technology Spillovers of Industrial Economy in Hubei Province

On 04/10/2014, in Agriculture, by rain

This paper’s object of study is technology spillovers effect of industry in Hubeiprovince.Since carrying out the reform and opening up policy,Hubei province has attractedmore and more FDI.At the beginning,the purpose is to make up the lack of domesticfunds,while later it is gradually shifted to implement the “market for technology” strategy.Developing countries work for more of FDI,one of the important reasons is to get thebenefits of spillovers of FDI.However,a lot of studies indicate:the spillovers of FDI can bepositive or be negative,and the number of spillovers is affected by lots of factors.This paper’s foundation is the theory of endogenous Economic growth,which discoursthe concept,pathway,factors of technology spillovers.And then,It studies the object fromthe angle of industry and city using panel data,and it produces unanimous conclusion inthese two angle from the result,which can explain that FDI has produces technologyspillovers effect to the output of domestic Enterprise.But at last,the most significantcontribution to demostic Enterprise is its labor force and capital.And then,this paper testsdifferent factors to the effect of spillover.It can see that smaller technology gap,moderatecompetition of FDI,R&D of demostic company and the personnel engages in scientificand technological activities can promote technology spillovers effects,but the level ofhigher Education and financial support can not promote effectively the result of theoccurrence.It can also conclude that FDI which comes from Hong Kong,Macao,Taiwancauses more obvious effect than other regions.Finally,It will show some suggestionsagainst the above analysis.

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The Technical Spillover Effect of FDI on the Human Capital

On 04/10/2014, in Finance, by rain

When foreign direct Investment influences the economy of host country, there aretwo main ways: capital and technical spillover effect. The technical spillover effect offoreign direct Investment is an important way for host country, especially the developingcountries, to get the world advanced technology and catch up with the developed countries.China, as the largest developing country in the world, compared to other counties may paymore attention to foreign direct investment. Furthermore, there is much factor affects theproduce and level of technical spillover effect of foreign direct investment, but the humancapital of the host country is particularly important.In this research,we will study while the human capital of Shandong province effectsthe technical spillover effect of South Korea’s direct investment or not. On the base ofC-D production function, from the empirical analysis we know South Korea’s directinvestment has no visible technical spillover effect in Shandong province;but the effectwill happen when the human capital of Shandong province takes part in. Therefore,inorder to make better use of the South Korea’s direct investment to improve economy andtechnology of Shandong province,we should pay much attention to the addition of humancapital of Shandong province.

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Locational Choice Trends of Foreign Direct Investment in China:1984-2009

On 04/10/2014, in Finance, by rain

Since reform and opening, China has made remarkable Economic achievements,absorpting and utilizing a large number of foreign direct investments (Hereinafterreferred to as FDI). But review the history of attracting FDI, we can see China attractslittle FDI in the beginning of the reform and opening, but after the strategy of “marketfor technology” putting forward in1992, attracting FDI has risen sharply. Afterjoining in the WTO, FDI inflow presents a new phenomenon. While the regionaldistribution of FDI in China’s domestic is also very uneven, showing east high westlow; furthermore, in the same area, the situation of attracting foreign Investment isdifferent at different times. This paper attempts to research locational factors whichinfluence FDI locational choices, and identify the trends of locational factors affectingFDI locational choices, and then through the relationship of certainty to recommendlocal governments to develop policies to better improve the locational factors toattract more FDI.This paper uses theoretical and empirical analysis, and as a city-sectional studyto explore the relationship between different locational factors and FDI locationalchoice, as well as changes in this relationship. The results of this study show that: Thewhole country: per capita GDP (pgdp), incentives, the number of students in collegesand universities and per capita wages the impact of FDI showed a gradual increasingtrend; wastewater treatment compliance rate (wastewater) and FDI locational choiceof a negative correlation, and this relationship was apparent to the third stage; cargo ofthe FDI locational choice of showing the first increase and then decreased, butremains positive relationship. The GDP growth rate (gdpg) of the FDI locationalchoice has no significant effect. East: pgdp, wage impact of FDI, as the case with thecountry. Policy, student locational choice for FDI influence increases firstly and thendecreased, cargo impact of FDI from scratch and then no process. Wastewater, gdpgon the locational choice of FDI has no significant effect. Central Region: policy,student and wage on FDI locational choice of the positive impact in the graduallyincreasing, pgdp, cargo starting from the second stage of locational selection of FDIhas a positive impact, and this effect in strengthening the relationship. Wastewater,gdpg on the locational choice of FDI has no significant effect. West: all the factors inthe first and second stages of FDI location choice are not affected. The third stage isonly cargo, student on the locational choice of FDI have a positive impact, while thewastewater of the locational choice of FDI have a negative impact. Conclusions of this study has an important revelation to local governments,especially in the economically backward central and western local government, toimprove the location factors to attract FDI to improve the ability to accelerate localeconomic development and narrow the gap between the regions.

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The Empirical Research on the Impact of Urbanization on the Foreign Direct Investment

On 04/10/2014, in Finance, by rain

Urbanization is the only way to achieve modernization for a country or region,and whether the rate of urbanization is reasonable depends on the coordination degreebetween urbanization and Economic and Social development, so urbanization will bean important Economic growth point to drive the next round of developmentof China’s. While foreign direct Investment affects formation of the city mainlythrough capital effects, spillover effects, system changes effects and so on. Theintrinsic relationship between urbanization and FDI attracted scholars’ extensiveresearch. Firstly, this paper explain how FDI advances urbanization, how urbanizationaffects FDI, and the internal theory base like the agglomeration economies betweenFDI and urbanization. Next, while differing from the traditional measure which issingle-indicator method, it selects comprehensive strength of urban of the267citiesfrom China and foreign direct Investment as a research object, use the way of analytichierarchy process to calculate the overall strength of the cities’ value which reflectsthe degree of urbanization level better. Further, it chooses panel data to conduct thetwo-stage least squares of simultaneous equations, which proves that the mutualpromoting effects between FDI and urbanization, and demonstrate that the importanceof urbanization scale to attract FDI, such as over-urbanization may hinder theabsorption of FDI. Finally, this paper concludes the policy implications about FDI andregional urban promotion.The main conclusions of this paper will be listed follow. First, there is a closecorrelation between urbanization and foreign direct Investment. The regressionanalysis of panel data shows that the higher the level of FDI, the higher the level ofurbanization. Conversely, raising the level of urbanization will also attract FDI. Thereexists a significant positive correlation between them. Also, the size of urbanizationscale has a profound impact to the attraction of FDI, and excessive overall strength ofurbanization will impede the absorption of FDI. Second, the optimization of industrialstructure promote Agricultural non-Agricultural, thus further the development ofurbanization. At the same time, increased government spending has a positive effectof urbanization. Third, market openness has a negative effect on FDI, mainly due tothe increase of the state-owned enterprises in the GDP output. They indicates thatChina’s industrial enterprises dominated by state-owned, which would weaken the competitiveness of foreign investment.

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Study on the Incentive Effect of Preferential Tax Policy on Foreign Direct Investment in China

On 04/10/2014, in Finance, by rain

China began to make use of FDI, which is short for Foreign Direct Investment, in1979when we started to open to outside. During the past twenty two years, FDI benefitsChina’s Economic development and is helpful to improve the pareto efficiency.Tax policy,as important factor and measure of macro-control, has great incentive effect on FDI. In thepast years, China offered special preferential tax policy to FDI and oriented to certainlocation. The new Law of Corporate Income Tax was carried out in March2007. Facingthe challenge of intense competition of international tax, many researchers begin to thinkabout whether the strategic readjustment of Corporate Income Tax will affect absorbingFDI, and how to improve related policy. This is what this paper mainly focus on as well.So this paper firstly analyze why host country need FDI, why MNC are willing toinvest outside and which location aspects are taken into account, the necessary of usingpreferential tax policy to encourage FDI by related FDI theory. What is more, chapter3introduces the evolution and current situation of FDI and related Corporate Income TaxPolicy.This paper also set up an econometric model basing on the panel data of44citiesduring1989-2009and prove that the preferential tax policy has significant effect on FDIindeed, especially in midland. However, this effect is no longer as strong as before ineastern cities. To sum up, The New Corporate Income Tax does have negative effect onFDI, but the negative effect is limited. At last, this paper puts forward five suggestions oftax policy to encourage FDI and optimizing the structure of FDI.

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Research on Foreign Direct Investment Risks of China Enterprises and Risk Early Warning Mechanism

On 24/09/2013, in Management, by rain

“The strategy of going global” and growing steadily domestic economy propelChinese Enterprises to invest overseas in recent years, the scale becomes larger and hasbrought some Economic benefits. The complexity of international business environmentdetermines that Chinese enterprises must face various risks, such as political risk andmarket risk. During the business process, there are some risks resisting in the internal ofthe enterprises, as operational risk, Management risk and technical risk. So it is urgent totake measures to avoid and control the risks.This paper is divided into six chapters. From the whole framework perspective, it canbe divided into four major sections. The first part mainly introduces the thesis researchbackground and significance of the research and gives a brief description for theframework of the paper, to clarify the relationship between the various chapters.The second part do a detailed analysis on general meaning of the foreign directinvestment risks, characteristics and classification to make the necessary foundation forChina’s foreign direct Investment in risk identification. Then do a detailed analysis on thestatus quo, patterns and problems of China’s foreign direct Investment, followed by furtheranalysis of foreign direct Investment risk. Then do the classification identification of themajor risks of the foreign direct investment combined with the status quo of China’sforeign direct investment, and the typical case of Geely acquisition of Volvo Car in2010.Then do an analysis on the causes of the various types of risk according to theclassification of the above enterprises of foreign direct investment risk.The third part establishes initial early risk warning mechanisms, and builds enterpriserisk early warning organization and operation mechanism, then fuzzy mathematics is usedto analyze the risk impact, finally, the author does an empirical study on the case of Geelyacquisition Volvo Car. At the last part, the author gives some risk avoiding measures according to the aboveanalysis.The text gives a new risk Management model based on the international experienceand domestic company’s actuality and problems. In practice, we should use the risk modelaccording to the fact as it is only a mathematics method which has some limiting factors.

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Analysis of Influence on Foreign Direct Investment to Optimization of the Industrial Structure in Liaoning Province

On 23/09/2013, in Finance, by rain

With the acceleration of China’s Economic development, foreign direct investmentin China has become an important source of funds, and it brings advanced technology toimprove the return on Investment and China’s export structure, enhance the country’sindustrial structure, increase the tax. As China’s Liaoning Province, the eastern coastalprovinces, with their own advantages and Economic environment, gradual introduction offoreign Investment, which not only promotes the growth of total Economic output ofLiaoning Province, but also brought advanced technology and abundant capital, inLiaoning Province economic development plays an important role. In such circumstances,how to make better use of foreign direct investment to promote the industrial structure inLiaoning Province, has become the focus of our attention. We need to further positiveand effective use of foreign investment to develop better policies to foreign investmentand industrial structure, Liaoning Province, combining real mutual benefit, mutualpromotion and to achieve better and faster economic development in our province.Foreign direct investment in the scale and quantity is more and more big in China.They not only invest in labor-intensive industries, but also invest in technology intensiveindustry. Because of our country policy orientation, at the beginning of the reform andopening up, most of the foreign direct investment are investing in developed coastalregions. Along with the rapid economic development of inland, in recent years, theforeign direct investment is to transfer the Midwest. Now, foreign direct investment hasbecome the important investment of liaoning province. Our province is in the industrialstructure optimization stage, positive and effective use of foreign direct investment to theeconomic development of our province plays a vital role. Liaoning province have beenvery focus on the adjustment of industrial structure and the optimization, but because ofhistorical reasons, three times of liaoning province industrial structure development is notharmonious. Liaoning province always is the important development area of thenortheast old industrial base, the second industry account for most proportion, the firstand the third industry development is comparatively backward. At the same time, foreigndirect investment in three times in the industrial structure of liaoning province is notcoordinate. In the second industrial investment is excessive. In the first industry ofagricultural investment rate is very few. Though the proportion of investment in the tertiary industry rises year by year, but investment insufficient still, further inflaming theliaoning province three times of industrial structure is not harmonious, affect theindustrial structure optimization and upgrading. So at this stage for foreign directinvestment in liaoning province, the industrial structure optimization analysis is verynecessary.This paper first to domestic and international about foreign direct investments andthe industrial structure of the study summarized and concluded, this paper puts forwardthe research significance, innovations and disadvantages; Then respectively is foreigndirect investment and industrial structure of meaning and contact analysis; Then liaoningprovince industrial structure present situation and the utilization of foreign directinvestment analysis on the status, through the model describes the foreign directinvestment for three times the influence of the industrial structure and the optimization;Finally the foreign direct investment in liaoning province for industrial structureoptimization put forward policy Suggestions and to improve the utilization of foreigncapital to promote the rapid development of economy in liaoning province.

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The Study of FDI Technology Spillover Effect on China’s Automobile Industry

On 23/09/2013, in Finance, by rain

In2009, the United Nations Conference on Trade and Development (UNCTD)says the foreign direct Investment of the United States is firmly held the top spot,while China has come in second surpassing France and the United Kingdom whichcame in second and third separately in2008. Foreign direct Investment in China hasnot only promoted China’s sustained Economic growth, but also improved the qualityof Economic growth in China. With the further development of the economicglobalization,foreign direct Investment receives more and more attention of hostcountries,at the same time, the research on technology spillovers effect of FDI havealso become a hot topic. Automobile industry is an important pillar industry for thenational economy and plays an important role for the national Economic and socialdevelopment. At present, multinationals have become a leading force for China’s autoindustry, the domestic enterprises have had to compete with multinational companies.It is necessary for us to scrutinize pros and cons that the FDI has brought about, andthen propose the corresponding suggestion for the sound development of the Chineseautomobile industry. This research is of great theoretical and practical significance.At first, the paper introduces the situation of the theoretical and empiricalresearch on technology spillovers effect of foreign direct investment both at home andabroad. Then, it analyzes the conduction mechanism and influence factors abouttechnology spillovers effect of foreign direct investment. Taking the former studyresults into account, it summarizes the routes for demonstration and imitation, linksbetween manufacturers, competition and human resources flow, and also analyzes thefactors affecting technology spillovers. Next regarding automobile industry of theBohai area as the research object, it demonstrates the development situation ofautomobile industry FDI in this area and the positive influence that FDI has produced;through the establishment of model on the automobile industry in the region, itconcludes that FDI technology spillovers exist;the paper also takes the BeijingHyundai as an example, by the case research form, specifically analyzes the effect ofFDI on the local automobile Enterprise’s technology spillovers from the perspective of Enterprise’s microscopic stratification. Finally, the paper puts forward thecorresponding proposals on how to make a better use of FDI and expand FDItechnology spillover.

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Risk Perceptions of Chinese and Dutch Investors Operating in the African Market a Comparative Study

On 21/09/2013, in Finance, by rain

This study contributes to the finance research that examines how country-specific investors’ risk perceptions of investments in Africa differ. In this case, risk perceptions of Chinese and Dutch professionals, working on Africa investments for policy banks and institutions in China and the Netherlands respectively, are compared. Existing literature suggests that Chinese and Western investors perceive importance of various risks differently. However, no conclusive research has been performed on Africa specific risk perceptions of Dutch and Chinese investors.By means of a statistical analysis of survey results, I examine how country and project risk perceptions differ between Chinese&Dutch professionals working for financial institutions that invest in Africa. Eighteen Dutch investors and fifteen Chinese investors from four different financial institutions ranked twenty-six risk factors on a Likert type scale. By following a distribution fitting approach, the risk factors were ranked by their level of importance for both samples.The results show that although there are various similarities between both samples’risk perceptions, the ranking of the priority risks is substantially different. Chinese investors perceive political country risks, such as conflicts, government stability and bureaucracy quality, and religious and ethnic tensions as very important. The Dutch investors find the project risks; corporate governance, financial project risks and Environmental and Social risks most important. Similarities between both samples risk perceptions can be found in the average importance of corruption risk, the high importance of Environmental and Social risk, and the little importance of a country’s Economic and financial risk. This study suggests that based on the similarities in risk perceptions, common grounds can be found for cooperation in the African market.