Investiții străine, instituții si creștere economică - PDF

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Diaspora în Cercetarea Ştiinţifică şi Învăţământul Superior din România Workshop: Cultură, Drept și Dezvoltare Economică Investiții străine, instituții si creștere economică Cristina JUDE Banca Națională

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Diaspora în Cercetarea Ştiinţifică şi Învăţământul Superior din România Workshop: Cultură, Drept și Dezvoltare Economică Investiții străine, instituții si creștere economică Cristina JUDE Banca Națională a Franței Timisoara, aprilie 2016 Universitatea de Vest din Timișoara Structura prezentării Natura duală a investitiilor straine directe Contributia ISD la progresul tehnic. Focus Romania ISD si acumularea de capital. Focus Europa Est Rolul mediator al institutiilor Prezentarea se bazeaza pe rezultatele a trei articole: 1. Jude C., Levieuge G. (2016). Growth Effect of Foreign Direct Investment in Developing Economies: The Role of Institutional Quality» The World Economy (2016), doi: /twec Jude C. (2015) Technology Spillovers from FDI. Evidence on the Intensity of Different Spillover Channels, The World Economy (2015) doi: /twec Jude C. (2015). Does FDI Crowd out Domestic Investment in Transition Countries?, LEO Working Papers / DR LEO 2301, Orleans Economics Laboratory / Laboratoire d'economie d'orleans (LEO), University of Orleans. Conceptual framework Dual nature of FDI Capital flow Contribution to capital accumulation Transitory effect on growth Exogeneous perspective on growth Technology flow Contribution technical progress Long-run effect on growth Endogeneous perspective on growth Institutions: catalytic role Overall effect on economic growth 1. Technology spillovers from FDI FDI : a viable solution to spur economic growth, through productivity improvements (demello, 1997) and the associated multiplier effect Most innovation created in developed countries. FDI is the cheapest and the most effective form of technology transfer (Blomstrom and Kokko, 1998 ; Campos and Kinoshita, 2002) Channels of technology transfer through FDI: competition, demonstration/imitation, labor mobility, inter-sectoral linkages Central and Eastern Europe: - in need of technology transfer - Special incentives to attract FDI. Are they justified? What is the direction and the intensity of FDI technological spillovers in Romania? How do we investigate technology spillovers? Are foreign firms technologically superior to domestic firms? Yes Are there strong linkages between foreign and domestic firms? No No Yes No potential for technology transfer and productivity enhancement Low potential for technology transfer High potential for technology transfer Absorptive capacity of local firms Technological spillovers leading to increase/ decrease in domestic firms productivity Empirical analysis Micro level data: ~2000 Romanian firms, from 33 industries (whole economy) period 6 Input-Output tables Empirical analysis based on sectoral proxies for the different spillover effects Absorptive capacity proxied by: human capital, R&D, technological gap Technological spillovers from FDI in Romania Local suppliers Multinationals + Direct transfer Upstream FDI ++? Local competitors Downstream -- - Local clients The position in the supply chain is essential! 2. FDI and capital accumulation Direct and indirect contribution to capital accumulation Real market Financial market FDI affects the demand addressed to local firms (competition, use of local inputs) FDI improves access to finance for local firms (financial resources, interest rates) Substitution (crowding-out) effect Complementarity (crowding-in) effect Does FDI really contribute to capital accumulation in CEE? Does it crowd-out or stimulate local investors? Do different types of FDI matter? Empirical framework Difficulty in empirically disentangling foreign from domestic investment (BOP statistics vs national accounts). FDI is not a net addition to the existing capital stock! Short and long run elasticities based on a dynamic investment function GFCF it GFCF GDP INT FDI K X it 1 1 it 1 2 it 3 it 4 it 5 it i it Hypotheses on the effect of FDI on domestic investment: Short term Long term Impact H1 + + Crowding-in H2 + - Temporary crowding-in H3 - - Crowding-out H4 - + Creative distruction Data and main results Data for the empirical analysis: o Panel of 10 CEEC (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia) o Period Results for Central and Eastern Europe : o short term substitution between FDI and domestic investment o the intensity of crowding-out decreases with time o However, no long run complementarity identified FDI seems to discourage domestic investment in CEE Greenfield and M&A FDI usually seen as a homogeneous capital flow However, greenfield and M&A have potentially different implications for K accumulation due to the motivation of foreign investors Greenfield FDI o net addition to the K stock o export oriented o interaction on the real market M&A o no immediate addition to the K stock o locally oriented o Interaction on the financial market Short-term Long-term Conclusion FDI - total - -/0 Crowding-out Greenfield - + Creative destruction M&A 0 0 No relationship The mediating role of financial development What mechanism is at work, real or financial interaction? Different policy implications Overall, no significant interaction between foreign and domestic investors on the financial market Financial markets in CEE are still developing. Financial interaction should be all the more present as financial markets are developed Financial development acts as a mediating factor only for M&A. Conclusion: While M&A have no independent contribution to capital accumulation, a developed financial system favors a crowding-in effect on domestic investment. 3. Is the growth effect of FDI conditional on institutional quality? Institutional quality : an important driver in the growth process Economic problems in developing countries caused by poor institutions We know that FDI inflows are attracted by better institutions (Busse and Hefeker, 2007; Ali et al. 2010) Still, countries with the same level of FDI experience very different growth outcomes. Why? Local conditions modulate the effect of FDI on economic growth, among which institutions. Host country heterogeneity, as given by institutions, could be a plausible explanation for the inconclusive results of existing empirical studies. Arguments in favor of a modulating role FDI Institutions Growth Knowledge spillovers institutions shape the relationship between foreign and domestic firms Direct technology transfer and property rights The entry mode of FDI The quality of FDI and the potential for spillovers Transaction costs and risk for long term contracts Capital accumulation political stability reduces the crowding-out effect sound financial institutions favor a crowding-in of domestic investment Methodology for investigating conditionality Assumption: The impact of FDI on growth is not constant along the cross-sectional and the time dimensions Panel Smooth Transition Regression (Gonzales et al. 2005) Regime-switching model allowing for a small number of extreme regimes The coefficient of FDI depends on a transition variable (institutions) y it i ' ' 0 FDI it 1FDI itg Iit;, c) yit FDI it ' ( z 0 1 * g( Iit;, c) The values of the institutional indicator I it determine the switch from a regime to another, according to a smooth transition function g(.) it u it Data Sample: 94 developing countries, over the period Institutions: 11 indicators from the International Country Risk Guide (political risk, government stability, investment profile, internal conflicts, external conflicts, corruption, military in politics, law and order, ethnic tensions, democratic accountability, bureaucracy) Control variables (initial GDP/capita, population growth, investment, trade openness, government consumption, inflation) The non-linearity hypothesis Is there a heterogeneous (nonlinear) relationship between FDI and economic growth conditional on institutional quality? Heterogeneous relationship Political risk Investment profile Internal and external conflicts Democratic accountability Bureaucracy quality Military in politics Law and order Ethnical tensions Homogeneous relationship Political stability Corruption control How do we interpret non-linearity? (1) What is the independent effect of FDI on economic growth? (2) What is the indirect conditional effect given a certain level of institutions? (3) What is the value of the threshold level of institutional quality? (4) Is the switch from a regime to another smooth or sudden? (1) (2) (3) (4) Discussion (1) The slope of the transition function influences the marginal effect Smooth transition ethnical tensions democratic accountability bureaucracy quality military in politics Sharp transition law and order political risk investment profile internal and external conflicts The position of a country along the non-linear curve of growth elasticity to FDI Anticipations on the evolution of the growth elasticity to FDI given by improvements in the institutional environment Discussion (2) Law & order an effort by a country just below the threshold value is likely to result in a sharp increase in the effect of FDI on growth Democratic accountability an effort by a country just below the threshold value is likely to result in a very gradual increase in the growth effect of FDI The sharp/smooth transition has important implications for countries situated just below the threshold value Romania from 2000 onwards Romania in 1996 Romania in 1990 Romania in 1997 Romania in 2005 Romania until 1996 Summary results FDI alone has no significant effect on growth in developing countries. Benefits are conditional on a sound institutional environment In Eastern Europe, generally situated above minimum threshold values, FDI contributes to growth essentially through technology spillovers and not capital accumulation (FDI crowds-out domestic investors). Most benefits are captured by local suppliers Financial development favors complementarities between FDI and local investors Policy implications Sequencing is needed in implementing economic policies: first institutional reform, second FDI attraction policies Potential for institutional complementarities Greenfield should be preferred to M&A, as well as local content policies Vă mulțumesc pentru atenție
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