An extensive literature in international and comparative political economy has focused on the how the mobility of capital affects the ability of governments to tax and regulate firms. The conventional wisdom holds that governments are in competition with each other to attract foreign direct investment (FDI). Nation-states observe the fiscal and regulatory decisions of competitor governments, an...

Fancy a Stay at the "Hotel California"? Foreign Direct Investment, Taxation and Firing Costs This paper looks at the trade off between investment incentives and exit costs for the location of foreign direct investment (FDI). This issue does not appear to have been tackled in much detail in the literature. The analysis considers the effect of profit taxation (as a measure of investment incentive...

In this paper fourteen selected developing economies, including Iran, are compared to evaluate the Iranian position in attracting foreign direct investment (FDI). The evaluation is based on economic performance, risk, liberalization policy, and FDI determinant indicators. The results show that the Iranian economy has a sound economic performance and its economic, financial, and political risks ...

Foreign Direct investment plays a very important role in the development of the nation. Sometimes domestically available capital is inadequate for the purpose of overall development of the country. Foreign capital is seen as a way of filling in gaps between domestic savings and investment. India can attract much larger foreign investments than it has done in the past. The present study has focu...

This paper discusses the impact of foreign direct investment (FDI) on market entry and welfare. It assumes that firms may enter markets in the first period as national firms only. In the second period, however, FDI is possible. The paper demonstrates that FDI reduces market entry because equilibrium profits in the second period decline with a decrease in the fixed cost of FDI. Therefore, compar...

Sovereign wealth funds (SWFs) have emerged in developing Asia as a policy response to an unprecedented accumulation of foreign exchange (FX) reserves since 2000. At the same time, developing countries have become an increasingly important source of outward foreign direct investment (FDI). The central objective of this paper is to evaluate the prospects for SWFs to serve as a major conduit for t...

The purpose of this paper is to investigate the role of exchange rate uncertainty in determining foreign direct R&D investment into the UK. We estimate an econometric model of FDI in R&D, using a panel of manufacturing industries. Our results suggest that an increase in the volatility of the euro-dollar exchange rate tends to relocate R&D investment from the Euro Area into the UK. A rise in the...

This paper discusses the impact of foreign direct investment (FDI) on market entry and welfare in a model of two countries and two periods. In the first period, firms enter the market as national firms, in the second period, FDI is possible. The paper demonstrates that FDI reduces market entry because equilibrium profits in the second period decline with a decrease in the fixed cost of FDI. The...

Studies of foreign direct investment (FDI) distribution in the US is voluminous but such studies on a developing country are rare. We fill the void by analyzing the spatial and temporal variation in FDI among China’s 30 provinces. We believe this is the first study of its kind. Other than some “standard” results, our pooled regression finds that the cumulative FDI has a negative impact on the n...