Competitiveness of Spanish foreign subsidiaries

This empirical study investigates the determinants and growth effect of FDI in case of four South Asian countries over the period of 1995-2000. It comprises two major analytical parts. Firstly, we incorporate a gravity model equation using panel data in order to investigate potential determinants of foreign direct investment in these countries. Secondly, we use a growth model equation to investigate growth effect of foreign direct investment in the countries. In both analyses, we employ Arellano-Bond dynamic panel system method of moment estimation method. The results derived from this study suggest that: (1) the pulling, pushing and cyclical factors are crucially important in determining FDI in South Asian countries; (2) foreign direct investment in South Asian countries are significant and positively associated with growth rate, but seem to be having average supportive to the growth rate in these countries.

This study investigates the influence of country risk on foreign direct investment (FDI) inflows in ASEAN nations over the period 1998–2022, focusing on political, economic, and financial risk components. Employing the Fixed Effects Model (FEM), this study analyzes panel data across ASEAN countries to assess how different aspects of country risk affect FDI attraction. The findings reveal that while no significant overall connection exists between country risk and FDI inflows across the entire sample, country-specific characteristics play a crucial role. Specifically, negative impacts are observed in developing nations, nations with lower FDI inflows, and those with relatively low-risk profiles. Political risks significantly discourage foreign investments, especially in developing economies, economies with difficulty attracting foreign capital, and those considered high-risk. By contrast, financial and economic risks generally exhibit no significant influence on FDI. Nonetheless, reducing economic risk emerges as an important factor for enhancing FDI in countries with low levels of FDI attraction, whereas mitigating financial risk is critical for countries that attract higher volumes of FDI. Country risk impacts FDI inflows in a nuanced, country-specific manner, with political risk being the most significant deterrent for developing and high-risk ASEAN nations. Based on this finding, we are able to provide recommendations to address distinct dimensions of country risk and foster a more favorable investment environment across ASEAN member states.

Foreign direct investment (FDI) is a process that starts at a point in time and may end over time or continue uninterrupted throughout the observation period. Certain economic conditions may incline investors to divest by liquidating a business entity or selling their shares in the company in which the FDIs were made. Therefore, this is an analogy with the occurrence of censored cases, which allows for the use of survival analysis tools in the examination of the duration of FDIs. The aim of this article was to compare the patterns of ‘survival’ of foreign direct investments in individual Visegrad Group countries based on the relevant tables showing ‘the duration of FDIs’ and the survival curves obtained using the Kaplan-Meier estimator according to the criteria of sector and country of origin of the foreign capital. The Cox proportional hazards model was used to model the risk of foreign divestment. Based on the results obtained, the rate of decline in the cumulative probability of FDI survival shows differences between countries; FDI survival medians also vary across countries. In particular, it is demonstrated that the highest probability of foreign direct divestment in Poland applies to projects which are approximately 13.5 to 15 years long. In Czechia, this concerns projects which are approximately 18 to 21 years old, while in Slovakia and Hungary it is projects which are longer than 21. The study also shows that in all Visegrad countries, FDIs with German capital lasted the shortest, while projects with French capital lasted the longest (in the Czech Republic, Poland, and Hungary). In the majority of the Visegrad Group countries, the highest risk of divestment is typical of projects in sectors other than industrial processing and financial, insurance and other services. The data for the computations are from the Orbis and Zephir databases.

Foreign Direct Investments (FDI) has been considered an important source of economic growth and technological development in transition economies. The previous empirical literature has shown that FDI promote economic growth via complementary effects on domestic investments, increases in productivity and overall economic efficiency, giving rise to an increasing interest in understanding the key determinants of FDI. Apart from traditional FDI determinants, favourable tax policy has been considered an important factor influencing MNCs’ location decisions. The goal of this paper is to investigate the impact of corporate income tax on FDI in the context of less advanced transition economies and to analyse whether the tax effect is conditional on the level of economic development. A small number of studies exist analysing the importance of tax policy regime in attracting FDI covering South-East European countries. In this study, we rely on panel gravity econometric framework and examine the impact of tax policy on FDI using bilateral FDI flows between 8 home and 8 South East Europe host countries in the period 2000–2018. We estimate the regression using Prais-Winsten correlated panels corrected standard errors PSCE method to obtain robust estimates of individual effects in the presence of heteroscedasticity and serial correlation. The seven SEE host countries included in the sample are considered of similar economic structures and institutional transformation, which seems important in analysing tax policy effectiveness and minimising biases associated with econometric modelling of FDI determinants. Finally, we study this relationship in an integrated framework considering traditional gravity forces as well as a number of additional FDI determinants, including institutional factors. We show that, although tax policy seems an important determinant of FDI, its effects seem to be conditional on the level of technological development. Given these findings, reducing corporate income tax may be considered an effective tool in promoting FDI, which seems to be of particular importance for less developed transition economies. The results are robust to different model specifications and consideration of endogeneity.Implications for Central European audience: The direct implications of this research for business policymakers in CEE include the need to revise and optimise the levels of corporate income tax and incorporate this specific policy instrument in FDI strategies. In particular, the results of this research indicate that tax cuts have been more effective in attracting FDI in countries that are at a lower level of technological sophistication. The managers could seek to size the investment opportunity related to possible further corporate income tax cuts in the group of least developed CEE amid the economic rationale for tax policy competition among these countries.

Environmental protection is an essential aspect of the One Belt and One Road Initiative. Chinese enterprises need to pay close attention to their environmental responsibilities arising from their foreign direct investments (FDIs) in other Belt and Road countries. The determination of environmental responsibility is required to consider the sources of environmental obligations and operational logic of different dispute settlement mechanisms. Chinese enterprises face environmental obligations from four dimensions—that is, the Chinese government, host countries, international law, and other informal environmental obligations. The choice of a specific dispute settlement approach depends upon a series of considerations. When pre-judging and evaluating their environmental obligations, Chinese enterprises should, on the basis of the just and reasonable settlement of environmental disputes, clarify the environmental standards, identify the legitimacy and rationality of governmental regulations, review the objective environmental consequence(s), and determine the doctrine of liability fixation to be applied. Chinese enterprises should adjust their development principles of FDI, perform due diligence and prudence, and utilize multiple dispute resolution mechanisms.

Purpose – This paper explains the structured framework for integrating marketing strategies with public policy to support sustainable agricultural development in Tamil Nadu, India. Design/methodology/approach – The research adopts a qualitative case study approach to examine selected initiatives such as the National Agricultural Market (e-NAM), Farmer Producer Organizations (FPOs), and climate-resilient seed distribution programs. Both primary and secondary data were collected through semi-structured interviews and surveys with 50 farmers across three districts in Tamil Nadu. The methodology is designed to uncover both the practical impacts and the systemic gaps within these interventions. Findings – The findings reveal that coordinated marketing and policy efforts have contributed significantly to improving farmers’ market connectivity, ensuring better price realization, and encouraging the adoption of sustainable agricultural practices. Initiatives like e-NAM have reduced the dependence on middlemen, while FPOs have empowered smallholder farmers through collective bargaining. Practical implications – The paper identifies key action areas, including the need to strengthen public-private partnerships, enhance digital platforms for market access, and ensure localized support systems tailored to farmer needs. Social implications – By enabling farmers to participate more actively in value chains and decision-making processes, these integrated efforts contribute to rural empowerment, environmental conservation, and regional economic development. Originality/value – The paper contributes a unique lens to the discourse on agricultural development by combining marketing and policy analysis in a single framework. The study bridges a gap in existing literature by emphasizing practical field-level outcomes and policy implications specific to Tamil Nadu.

Purpose – Many new businesses are being formed to offer shared products and services. The author describes this trend as an access economy, which offers customers the benefits of disintermediation - tourist accommodations without hotel chains, local transportation without taxi companies, peer-to-peer lending without banks, retail storefronts with brokers and leases. The paper aims to analyse the factors that are driving its growth. Design/methodology/approach – The author offers five strategies for success in the access economy and describes how firms are using them to gain competitive advantage. Findings – The sharing economy has produced three phenomena – the shredding of vertical value chains, the creation of vast new horizontal value chains, and the social change of people preferring access to ownership or accepting the benefits of access. Together they bring significant economic and social changes to business and society. Practical implications – Some companies are beginning to adjust to the generational shift from ownership to access by deemphasizing the sale of things and refocusing their business practices on managing every aspect of their client’s value chain – what they call being a “solution provider.” Social implications – Instead of planning their lives on the premise of acquiring and owning more private property, a new generation of web adventurers, mostly young people, is finding meaning and satisfaction in having shared access to things and interacting with other people in the process. Originality/value – Each business will likely have a unique take on the best way to compete is this emerging environment given how much its customers value access and accept sharing. The author’s five possible strategies provide a starting point for corporate competitive scenarios.

International capital flows and the operation of multinational enterprises (MNEs) are influenced by several socioeconomic and political factors. Among them, low labor cost is listed among the determinants that attract foreign capital, primarily foreign direct investment (FDI) inflows, which in various cases is attributed to unskilled employees, including working children. Working children, mainly in developing countries, remain an important social issue which has attracted increasing research interest, as well as the coordinated efforts of international organizations. The present research aims to empirically investigate the interaction between FDI inflows and child labor in developing countries using panel data analysis. The paper includes an extensive literature review of related empirical research on the association between child labor and FDI inflows in developing countries. The novelty of the study is attributed to its effort to empirically investigate the causality between FDI and child labor in two geographic regions that present high rates of working children, namely sub-Saharan Africa and Latin America. A sample of 42 developing countries from a period ranging from 1980 to 2019 was used and Granger causality tests were applied. The study concludes that there is a unidirectional causal relationship from FDI inflows to child labor in these regions and no causality was observed from child labor on macroeconomic independent variables. Several policies and proposals that will reduce or prevent child labor in the subsidiaries of multinational companies are included.

There is an ongoing debate about the impact of inflow of Foreign Direct Investment (FDI) on economic growth in a closed country. This is mainly due to two diversified views pertaining to the relationship between FDI and economic growth. The main arguments in favour of FDI promoting economic growth are: (1) The superiority of multinational corporations (MNCs) over local firms. Output per worker in MNCs taken as a group is often many times greater than in local owned operation. Wages paid by foreign affiliates are also higher than local owned operations in both developed and developing host countries, within the same industries and the same locations. (2) A shift towards greater use of non-equity and cooperative relationships with other enterprises such as alliances, partnership, management contracts or subcontracting arrangements serve corporate objectives. They can provide better access to technologies or other assets, allowing firms to share the cost and risk of innovatory activities and can reduce the production cost of labour-incentive products. (3) Emergence of a network type of organisation expands the scope of interactions between MNCs and enterprises from host countries which will create international economic integration. (4) MNCs create an integrated international product system through FDI. This will broaden the range of resources sought by MNCs in host countries, making firms more selective in their choices. This can also encourage FDI in countries that cannot provide a wide range of resources but have some specific advantage (accounting, technology, products, etc.).

Trade and participation in global value chains can play a key role in economic diversification and development. This paper deepens the discussion about productivity growth and upgrading in agriculture in Africa, and the role of national, regional, and international value chains in supporting such structural change. The analysis in this report is based on quantitative and qualitative surveys undertaken in 2016 in Ghana, Kenya, and Zambia, where 3,935 farmers, 60 aggregators, and 56 buyers in the maize, cassava, and sorghum value chains were interviewed in the three countries. The descriptive results show that farmers who were on a contract saw greater structural transformation; higher output; and better access to seeds, fertilizers, pesticides, technology, and extension services compared with farmers who were not on a contract. To identify more robustly the link between value chain participation and contract farming with productivity and upgrading, the paper looks at the relationship using a variety of empirical methodologies, ranging from ordinary least squares and probit regressions to propensity score matching. Based on the empirical evidence, the hypothesis that value chain participation leads to structural transformation cannot be confirmed. The paper does find evidence that formal or informal contractual arrangements that regulate the provision of inputs to production, such as fertilizer, technology, extension services, and market information, positively affect upgrading. It remains nevertheless important to understand the impact of government policies on the emergence of value chains given that value chains support contractual arrangements.

Purpose – In today's increasingly globalized world, foreign direct investment (FDI) is a hotbed for discussion. Numerous studies have been undertaken regarding FDI, its determinants and benefits, but very few works provide importance to the effect of political risk on the inflow of FDI. Some papers introduce institutional or governance issues in determining FDI inflow, but a comprehensive framework in this respect is non-existent. With this end in view, the authors take 146 countries worldwide over a period of 1984-2009 and then classify countries as OECD or non-OECD members to see whether there is any difference in the nature of the effect. The study keeps other possible determinants of FDI – market size, growth rate of real GDP, trade openness, infrastructural facilities as control variables while considering the effect of underlying political risk factors in deterring the FDI. Design/methodology/approach – This paper looks at the effect of political risk on FDI by using a systematic approach of factor analysis, in reducing the number of variables into their underlying factors and then generating factor scores. Then it uses a panel regression approach combined with factor analysis to examine which particular aspect of political risk contributes more towards deterring FDI inflow. Findings – The empirical results of this study refute the conventional notion that government failure is the primary contributing factor for poor FDI inflow. Rather, cultural conflict and the attitude of the partner country towards the host country are found to be mostly responsible for deterring FDI inflow. The result holds significantly even after controlling for traditional determinants regardless of whether it is an OECD member country or not. Practical implications – It is not just governance failure but the cultural factors and development partners' attitude about the country which mostly determines FDI inflow. Originality/value – This is the first paper which combines the factor analysis in a panel regression framework to examine the impact of political risk on FDI inflow.

Subject and purpose of work East Asia, particularly China, Japan, and South Korea has experienced rapid economic growth in recent decades, partly through active participation in global value chains (GVCs). Foreign direct investment (FDI) has played a crucial role in this process, enabling the transfer of technology and skills and access to international markets. This paper aims to empirically analyse the effects of FDI on GVCs in East Asian countries over the last two decades. Materials and methods The paper covers six East Asian countries from 2000 to 2022 and explores the relationship between FDI and GVCs using the Driscoll and Kraay (1998) estimator. The estimation techniques are ordinary least squares (OLS) and feasible generalized least squares (FGLS). Results The results reveal that FDI inflows into East Asia positively and significantly affect the countries participation in GVCs, both upstream and downstream. Conclusions These results suggest the need to support FDI in Asian countries to improve their participation in GVCs.

Foreign Direct Investment (FDI) flows have grown rapidly in size and importance in recent decades. They are an important source of capital in emerging markets and make up a significant proportion of GDP in many countries around the world. The international investment literature provides an extensive list of the impact of such capital flows, ranging from an increase in technological spillovers to a reduction in the market capitalization of the destination country’s stock market. This paper looks at one aspect of this broader research question. It examines the impact of FDI inflows on the size and liquidity of 14 developing country stock markets over the period 2007-2016. Using panel regressions, there is no significant impact of FDI inflows on the size and liquidity of the emerging stock markets but there is statistically negative contemporaneous impact of FDI inflows on market index returns. However, the possibility of a feedback effect or two-way causality between FDI inflows and stock market development suggest that an alternate methodology (VAR analysis or Granger Causality) may have been more appropriate.

The growing numbers of terminally ill and dying in prison has high economic and moral costs as global correctional systems and the society at large. However, to date little is known about the extent to which palliative and end-of-life care is infused within global prison health care systems. The purpose of this paper is to fill a gap in the literature by reviewing and critically appraising the methods and major findings of the international peer-reviewed literature on palliative and end-of-life care in prison, identify the common elements of promising palliative and end-of-life services in prison, and what factors facilitate or create barrier to implementation. A content analysis was conducted of the existing peer-reviewed literature on palliative and end-of-life care in prison. English-language articles were located through a comprehensive search of peer-reviewed journals, such as Academic Search Premier Literature databases using differing combinations of key word search terms, "prison," "palliative care," and "end-of-life care." A total of 49 studies published between 1991 and 2013 met criteria for sample inclusion. Deductive and inductive analysis techniques were used to generate frequency counts and common themes related to the methods and major findings. The majority (n=39) of studies were published between 2001-2013 in the USA (n=40) and the UK (n=7). Most were about US prison hospice programs (n=16) or barriers to providing palliative and end of life care in prisons (n=10). The results of the inductive analysis identified common elements of promising practices, which included the use of peer volunteers, multi-disciplinary teams, staff training, and partnerships with community hospices. Obstacles identified for infusing palliative and end-of-life care in prison included ethical dilemmas based on custody vs care, mistrust between staff and prisoners, safety concerns, concern over prisoners' potential misuse of pain medication, and institutional, staff, and public apathy toward terminally ill prisoners and their human rights to health in the form of compassionate and palliative care, including the use of compassionate release laws. Implications for future research that foster human rights and public awareness of the economic and moral costs of housing the sick and dying in prisons. More research is needed to document human rights violations as well as best practices and evidence-based practices in palliative and end-of-life care in prisons. Future studies should incorporate data from the terminally ill in prison, peer supports, and family members. Future studies also should employ more rigorous research designs to evaluate human rights violations, staff and public attitudes, laws and policies, and best practices. Quantitative studies that use experimental designs, longitudinal data, and multiple informants are needed. Qualitative data would allow for thick descriptions of key stakeholders experiences, especially of the facilitators and barriers for implementing policy reform efforts and palliative care in prisons. Practical implications - This review provides a foundation on which to build on about what is known thus far about the human right to health, especially parole policy reform and infusing palliative and end-of-life care for the terminally ill and dying in prisons. This information can be used to develop or improve a new generation research, practice, policy, and advocacy efforts for that target terminally ill and dying in prison and their families and communities. There are significant social implications to this review. From a human rights perspective, the right to freedom from torture and cruel and unusual punishment is a fundamental human right along with prisoners' rights for an appropriate level of health care. These rights should be guaranteed regardless of the nature of their crime or whether they are in a prison placement. The information provided in this review can be used to educate and possible transform individual's and society's views toward the terminally ill and dying who are involved in the criminal justice system. This paper extends the extant literature by using both quantitative and qualitative analysis methods to organize, summarize, and critically analyze the international literature on palliative care and end of life care in prison. This review is designed to increase awareness among the international community of the pain and suffering of the terminally ill in prison and the facilitators and barriers to providing them compassionate care while in custody.

Purpose – The purpose of this paper is to examine the risk-adjusted performance of Brazilian SRI stock funds. Design/methodology/approach – Risk-adjusted performance of 11 Brazilian socially responsible investment (SRI) funds relative to local index funds and matched pairs of funds. Findings – SRI funds performed as well as portfolios representing the broad market on a risk-adjusted basis, both before and during the global financial crisis. Independent investment houses are not interested in SRI funds. Large financial conglomerates may see these funds as part of their corporate social responsibility image strategy. Research limitations/implications – Brazilian SRI funds are a very small niche in the stock mutual fund universe of the country, thus, the small sample (universe) of SRI funds, as far as the author's knew. One cannot say that independent asset managers do not include SRI screening in their stock selection criteria. The use of SRI screening by the most prominent independent asset managers is a potential topic for future research. Practical implications – Brazilian SRI funds did not represent an extra screening filter cost to their investors. The majority of asset managers do not consider this strategy important enough to deserve an exclusive vehicle. Social implications – As SRI funds did not posit an extra screening cost, they may deserve a greater share of the mutual fund market, stimulating more SRI. Originality/value – The performance of Brazilian SRI stock funds had not been examined in the international literature. Brazil has vast natural resources, a very large economy and the fourth largest mutual fund industry in the world, but was overlooked.