《国际投资》课程教学资源（书籍文献）世界投资报告（2016）World Investment Report, FDI from Developing and Transition Economies - Implications for Development.pdf_P26-P30

OVERVIEW xxvii causing them concern about running short of key resources and inputs for their economic expansion. This is reflected in strategic and political motives underlying FDI by some of their TNCs, especially in natural resources. Second, there has been an attitudinal or behavioural change among the TNCs discussed in this chapter. They increasingly realize that they are operating in a global economy, not a domestic one, which has forced them to adopt an international vision. These two developments, along with push and pull factors – especially the threat of global competition in the home economy and increased overseas opportunities arising from liberalization – adds empirical weight to the idea that there is a structural shift towards earlier and greater FDI by developing-country TNCs. ...which, together with TNCs’ motives and competitive advantages, result in most of their FDI being located in developing countries. In principle, four main motives influence investment decisions by TNCs: market-seeking, efficiency-seeking, resource-seeking (all of which are asset exploiting strategies) and created-assetseeking (an asset-augmenting strategy). Surveys undertaken by UNCTAD and partner organizations on outward investing firms from developing countries confirm that, of these motives, the most important one for developing-country TNCs is market-seeking FDI, which primarily results in intraregional and intra-developingcountry FDI. Within this, there are differences in patterns of FDI, depending on the activity of the TNC: for example, FDI in consumer goods and services tends to be regional and South-South orientated; that in electronic components is usually regionally focused (because of the location of companies to which they supply their output); in IT services it is often regional and orientated towards developed countries (where key customers are located); and FDI by oil and gas TNCs targets regional markets as well as some developed countries (which remain the largest markets for energy). Efficiency-seeking FDI is the second most important motive, and is conducted primarily by TNCs from the relatively more advanced developing countries (hence higher labour costs); it tends to be concentrated in a few industries (such as electrical and electronics and garments and textiles). Most FDI based on this motive targets developing countries; that in the electrical/ electronics industry is strongly regionally focused, while FDI in the garments industry is geographically more widely dispersed. Generally, resource-seeking and created-asset-seeking motives for FDI are relatively less important for developingcountry TNCs. Not unexpectedly, most resourceseeking FDI is in developing countries and much created-asset-seeking FDI is in developed countries. Apart from the above motives, a common one for TNCs from some countries is that of strategic objectives assigned to State-owned TNCs by their home governments. Some governments have encouraged TNCs to secure vital inputs, such as raw materials for the home economy. For example, both Chinese and Indian TNCs are investing in resource-rich countries, especially in oil and gas (to expand supplies, in contrast to targeting customers as does market-seeking FDI in this industry). In the case of Chinese TNCs, the quest for secure supplies of a wide range of raw materials is complemented by parallel and sustained Chinese diplomatic efforts in Africa, Central Asia, Latin America and the Caribbean, and West Asia. In terms of location of FDI, the net result of the relevant drivers, advantages and motives is that most investments are in other developing countries (e.g. because of similarities in consumer markets, technological prowess or institutions) or within their region (i.e. neighbouring countries with which they are familiar). TNCs from developing countries and transition economies are here to stay. As they expand overseas, they gain knowledge, which potentially benefits them in two ways. First, they learn from experience and improve their ability to operate internationally. Second, they gain expertise and technology to enhance their firm-specific advantages, thereby improving their competitiveness and performance. This improved competitiveness has implications for home countries. By the same token, developing-country TNCs can have an impact on host developing economies in a number of ways, ranging from financial resource flows and investment to technology and skills. Increased competitiveness is one of the prime benefits that developing-country TNCs can derive from outward FDI … The most important potential gain for a firm from outward FDI is increased competitiveness, that is, the ability to survive and grow in an open economy, and attain its ultimate objectives of maximizing profits and retaining or increasing market share. Outward FDI can be a direct path to market expansion. In certain circumstances, it is the only path, for example when there are trade barriers that inhibit exports or when the TNC is in the business of providing a service that is non-

xxviii World Investment Report 2006. FDI from Developing and Transition Economies: Implications for Development tradable. Many developing-country TNCs have indeed expanded their markets through outward FDI, either through M&As or through greenfield investments. Outward FDI can also contribute to a company’s competitiveness by increasing its efficiency. Rising domestic costs, especially labour costs, have led a number of East and South-East Asian TNCs to invest in less expensive locations, with significant efficiency gains. In the above-mentioned surveys of outward investing firms from developing countries conducted by UNCTAD and partner organizations, market expansion in a broad sense (including market diversification) was the benefit most frequently mentioned, followed by efficiency gains. Case studies confirm that outward FDI has indeed enabled developing-country firms to enter new markets and expand their businesses. In a range of industries, such as white goods and personal computers, a number of Asian TNCs, such as Acer (Taiwan Province of China), Arcelik (Turkey), Haier (China) and Lenovo (China), have successfully expanded their markets through FDI, which has helped them grow into global players. Some companies from other developing regions have also ventured beyond their borders and become successful players in regional and even global markets. For instance, in 2005, Cemex (Mexico) became the third largest cement-making company in the world, with more than two thirds of its sales in developed countries. Enhancing enterprise competitiveness through outward FDI is a complex undertaking. It goes beyond the immediate gains arising from market expansion and/or cost-cutting, and includes upgrading technology, building brands, learning new management skills, linking up with global value chains, and moving up these chains into more advanced activities. Some of these tasks can be protracted and, in straight financial terms, bring little or no gain in the short run. This is particularly likely when the outward FDI is asset-augmenting rather than asset-exploiting, since in the former case the acquired assets must first be assimilated. Firms that invest abroad tend to be more competitive than their domestically oriented peers. However, these firms are also subject to risks inherent in projects undertaken abroad. Some of these projects may fail for various reasons, with potential negative effects on the parent company. One of the reasons is the disadvantage of being foreign, another is the existence of cultural, social and institutional differences between home and host economies, and the third is the increasing need for coordinating activities and concomitant organizational and environmental complexities. …while home countries can also benefit. Outward FDI from developing countries can also contribute directly and indirectly, to a home economy as a whole. Arguably, the most important potential gain for home countries from outward FDI is the improved competitiveness and performance of the firms and industries involved. Such gains may translate into broader benefits and enhanced competitiveness for the home country at large, contributing to industrial transformation and upgrading of value-added activities, improved export performance, higher national income and better employment opportunities. Improved competitiveness of outward investing TNCs can be transmitted to other firms and economic agents in home countries through various channels, including via linkages with, and spillovers to, local firms, competitive effects on local business, and linkages and interactions with institutions such as universities and research centres. In sum, the more embedded the outward investing TNCs are, the greater will be the expected benefits for the home economy. Evidence suggests that under appropriate home-country conditions, improved competitiveness of outward investing firms can indeed contribute towards enhancing industrial competitiveness and restructuring in the home economy as a whole. For instance, broader upgrading has occurred in whole industries in which firms have engaged in outward FDI. Examples are the IT industry in India, the consumer electronics industry in the Republic of Korea and China, and the computer and semiconductor industries in Taiwan Province of China. At the same time, outward FDI may pose several risks for the home economy: it can lead to reduced domestic investment, hollowing out of parts of the economy and loss of jobs. As always, the beneficial impacts have to be weighed against possible damaging impacts. The benefits are usually reaped when certain preconditions are met, for example a reasonably competitive home market or the absorptive capacity to profit from advanced technology. The net outcome of the different economic and non-economic impacts for a home economy depends on the underlying motives and strategies of firms for investing overseas and on the characteristics of the home economy itself. While outward FDI entails the transfer of capital from home to host country, it can also generate inflows in the form of repatriated profits, royalties and licensing fees, and payments by the host country for increased imports from the home

OVERVIEW xxix country (often in the form of intra-firm trade). In general, in the immediate aftermath of the outward investment, net financial flows tend to be negative but then gradually become positive. Outward FDI also seems to have a delayed but positive effect on domestic investment. The trade impacts of outward FDI on the home economy depend significantly – as in the case of developed-country FDI – on the motivations and types of investment undertaken. If the TNCs seek natural resources, outward FDI could lead to an increase in imports of those resources and exports of the inputs required for extraction. Marketseeking FDI can be expected to boost exports of intermediate products and capital goods from the home economy to the host country. If the motivation is efficiency or cost-reduction, outward FDI could enhance exports as well as imports, especially intra-firm trade, and their extent and pattern, depending on the geographic spread of the TNCs’ integrated international production activities. Results of some studies on Asian developing home economies and data on trade by affiliates of developing-country TNCs in the United States and Japan suggest a positive relationship between home-country exports and outward FDI from developing countries. Regarding employment, the impacts also vary according to the motivation of FDI. Efficiencyseeking FDI may raise many questions from a home-economy perspective. Even if it leads to a greater demand for higher skills at home, this may be of limited use to workers with low skills. Other kinds of FDI appear to have positive employment effects in the long run, depending considerably on the motivations of firms and their types of investments abroad. Evidence related to some Asian economies, such as Hong Kong (China) and Singapore, suggests that, under appropriate conditions, outward FDI can generate additional jobs in higher-skilled technical and managerial categories while reducing those in unskilled ones. On balance, in those economies, the job-creating effects of outward FDI exceeded its job-reducing effects. Much would depend, however, on the capacities of the human resources in the home country to adapt to changes in the structure of the home economy. Developing host countries may also gain from the rise in South-South FDI. For developing host economies, FDI from other developing countries provides a broader range of potential sources of capital, technology and management skills to tap. For low-income developing countries, it can be of great importance. As indicated above, in a number of LDCs, it accounts for a large share of total FDI inflows. To the extent that firms from developing countries invest appreciable amounts in other developing countries, that investment provides an important additional channel for further South-South economic cooperation. Because the motivations and competitive strengths of developing-country TNCs and the locational advantages sought by these firms diverge in several respects from those of TNCs from developed countries, their impact on host developing economies may carry certain advantages over that of FDI from developed countries. For example, the technology and business model of developing-country TNCs are generally somewhat closer to those used by firms in host developing countries, suggesting a greater likelihood of beneficial linkages and technology absorption. Developing-country TNCs also tend to use greenfield investments more than M&As as a mode of entry. This applies especially to investment in developing host countries. In this sense, their investments are more likely to have an immediate effect in improving production capacity in developing countries. The trade impacts of FDI from developing countries also vary according to motives. Efficiency-seeking FDI is most likely to boost exports, which may include local value addition of various kinds. One recent prominent kind of efficiency-seeking FDI has been in the garments industry, which has had substantial export-boosting effects in LDCs in particular. However, local sourcing and backward linkages in this industry have been limited, with the result that the ending of MFA quotas has led to a reduction in such FDI, for instance in Lesotho. In market-seeking FDI, especially in manufacturing, the effect is mainly one of import substitution. Resource-seeking FDI, of course, is export-oriented almost by definition, and may allow the host country to diversify its markets. A major advantage for host developing countries of FDI by developing-country TNCs, as compared to that from developed-country TNCs, is the greater employment-generating potential of the former. The main reason is that developingcountry TNCs may be oriented more towards labour-intensive industries, and may be more inclined to use simpler and more labour-intensive technologies, especially in manufacturing. Empirical evidence on average employment per affiliate in host developing countries suggests developing-country TNCs hire more people than

xxx World Investment Report 2006. FDI from Developing and Transition Economies: Implications for Development do developed-country TNCs. In the case of subSaharan Africa, for example, it has been found that the labour intensity of developing-country TNCs tends to be higher than that of developed-country TNCs in the majority of industries covered. Foreign affiliates of developing-country TNCs, on average, created more jobs per million dollars of assets than did those of developed-country TNCs. The effects of FDI on wages are generally positive, as TNCs as a whole pay higher wages than local employers. Although data specific to developing-country TNCs are limited, indirect evidence suggests that, at least for skilled labour, they offer higher wages than host-country domestic firms. But South-South FDI – like all FDI – also carries risks that can give rise to concerns. One is that foreign TNCs might dominate the local market. Another is that some host countries might feel threatened by the presence of too many firms from a single home country. For example, the dominance of South African TNCs has triggered some unease in neighbouring host countries. There is also the issue of undue political influence when an investing enterprise is State-owned, which is the case with many developing-country TNCs in natural resources. The political and social aspects of TNCs’ activities may also give rise to controversy, partly due to the size of their operations. In developing host economies, such problems have sometimes been exacerbated by the absence of an adequate regulatory framework and disparity in the allocation of economic benefits from inward FDI. In economies where domestic industries are underdeveloped, governments may not have the capabilities to ensure that acceptable labour and environmental standards, for example, are adhered to when foreign firms introduce new production processes or working methods. In sum, outward FDI from developing countries provides a potential avenue for gains from economic cooperation among developing countries. As investment by developing-country TNCs have certain inherent characteristics, including a greater orientation towards labour-intensive industries, it is of considerable relevance to low-income countries. At the same time, outward FDI from developing countries is a relatively new phenomenon. The limited evidence presented in this Report suggests that for home as well as host developing countries, the positive effects of FDI from developing countries may outweigh the negative ones; however further research is necessary to deepen the understanding of the impact of such FDI on developing economies. The expansion of outward FDI from developing countries is paralleled by changing policies in home countries... The emergence of TNCs from some developing and transition economies as key regional or global players is paralleled by important changes in both developed and developing countries of policies governing FDI and related matters. The ability of countries – be they sources or recipients of such investment – to benefit from such investment activity is influenced by active policies. By providing the appropriate legal and institutional environment, home country governments can create conditions that will induce their firms to invest overseas in ways that will produce gains for the home economy. From a home-country perspective, more and more developing and transition economies are dismantling previous barriers to outward FDI. While some form of capital control is often still in place to mitigate the risk of capital flight or financial instability, restrictions are mostly aimed at limiting other international capital flows than FDI. Only a handful of developing countries retain outright bans on outward FDI. Countries are increasingly recognizing the potential benefits from outward FDI. A number of governments, especially in developing Asia, are even actively encouraging their firms to invest abroad using a variety of supportive measures to that end. Such measures include information provision, match-making services, financial or fiscal incentives, as well as insurance coverage for overseas investment. There is no one-size-fits-all policy that can be recommended to deal with outward FDI. Every home country has to adopt and implement policies that fit its specific situation. Whether a country will benefit by moving from “passive liberalization” to “active promotion” of outward FDI depends on many factors, including the capabilities of its enterprise sector, and the links of the investing companies with the rest of the economy. Certain local capabilities are needed to exploit successfully the improved access to foreign markets, resources and strategic assets that outward FDI can bring about. Moreover, a certain level of absorptive capacity in the domestic enterprise sector may also be required to generate broader benefits from outward FDI. In many low-income countries, it may therefore be appropriate to focus on creating a more attractive business environment and enhancing domestic firm capabilities

OVERVIEW xxxi Still, for those countries that decide to encourage their firms to invest abroad, it is advisable to situate policies dealing specifically with outward FDI within a broader policy framework aimed at promoting competitiveness. The importance of generating domestic capabilities to benefit from outward FDI makes it appropriate to connect outward FDI-specific policies to those applied in areas such as development of small and medium-sized enterprises, technology and innovation. Moreover, outward FDI is only one of several ways in which a country and its firms can connect with the global production system. Government efforts to promote outward FDI can therefore benefit from close coordination with those related to attracting inward FDI, promoting imports or exports, migration and technology flows. The most elaborate use of measures to promote outward FDI is found in South, East and South-East Asia. In several countries of this region, governments discharge their promotional policies via trade promotion organizations, investment promotion agencies (IPAs), export credit agencies and/or EXIM banks. A range of policy instruments is applied in innovative ways, often targeting specific types of outward FDI. Some governments in Africa and Latin America have also publicly stressed the importance of outward FDI, but these statements have rarely been followed by concrete promotional measures. Particular attention is warranted to the role of outward FDI in the context of “South-South” cooperation. Governments in Asia and Africa have outlined specific programmes to facilitate such investment. Some of these programmes are aimed at strengthening intra-regional development (as in the case of infrastructure-related FDI by South African State-owned enterprises), while others are inter-regional in scope. This is an area that needs to be further explored and supported through closer collaboration among developing-country institutions. An interesting recent UNCTAD initiative to this end is the establishment of the G-NEXID network, which will allow for the sharing of experiences among EXIM banks from developing countries. …various policy responses in host countries … There are also policy implications for host countries. A key question is what developing host countries can do to leverage fully the expansion of FDI from the South. In terms of enhancing the positive impact of such FDI, they need to consider the full range of policies that can influence the behaviour of foreign affiliates, and their interaction with the local business environment. This requires taking into account the specific characteristics of different industries and activities in designing a strategy to attract desired kinds of FDI. In addition, it is important to promote the amount and quality of linkages between foreign affiliates and domestic firms. Host-country governments can use various measures to encourage linkages between domestic suppliers and foreign affiliates and strengthen the likelihood of spillovers in the areas of information, technology and training. In terms of addressing potential concerns and negative effects associated with inward FDI, there is no principal difference between the policies to apply in the case of FDI from developed countries and in the case of FDI from developing and transition economies. The scope for “South-South” FDI has led many developing host countries to adopt specific strategies to attract such investment. In a 2006 UNCTAD survey of IPAs, more than 90% of all African respondents stated that they currently targeted FDI from other developing countries, notably from within their own region. Indeed, for African IPAs, South Africa tops the list of developing home countries targeted, while in Latin America and the Caribbean, Brazil is the most targeted country. Meanwhile, developed-country IPAs also court investors from developing and transition economies. A significant number of such agencies have already set up local offices for that purpose in places like Brazil, China, India, the Republic of Korea, Singapore and South Africa. This expanded diversity of potential sources of FDI may imply greater bargaining power of recipient countries to the extent that they are able to attract a greater number of investors to compete for existing investment opportunities. Notwithstanding the interest in FDI from developing and transition economies, some stakeholders are less enthusiastic about some of the new investors. Several cross-border M&As by TNCs with links to their respective governments have generated national-security concerns, and others have spurred fears of job cuts. Countries in which State-owned TNCs embark on internationalization through FDI need to be aware of the potential sensitivities involved. In some host countries, State ownership is seen as an increased risk of a transaction being undertaken for other than purely economic motives. This is especially the case if the acquisitions relate to energy, infrastructure services or other industries with a “security dimension”. Whether private or Stateowned, investors from developing or transition economies that are anxious to tap the markets and resources of developed countries may also face