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Alternative Macroeconomic Closures in Baseline Projections – Implications for Macro Outcomes and Sectoral Structure
Publication Number
2021-06-A
Topic
Investment
Publication Topics
Author(s)
Jeremy E. J. Streatfeild
Abstract
Rising demand, failing infrastructure, and untapped potential for electricity generation in sub-Saharan Africa have created a substantial need for large-scale investment in the region. This paper identifies traditional providers of foreign and domestic investment in electricity generation in the region, discusses historical and recent trends, and assesses U.S. firms’ position in this market.
Author(s)
Jennifer Baumert Powell
Abstract
Green building services include construction, architecture, engineering, and related activities aimed at creating sustainable structures using environmentally responsible processes and materials. While the concept of building a structure to complement its surrounding environment is not new, there has been a sharp increase in the demand for green buildings and green retrofits in recent years. This trend can be linked to several factors, including a growing interest in cutting the costs associated with operating a structure, government regulations and incentives, and environmental concerns, among others. Available evidence suggests that U.S. exports and overseas sales of green building services are currently small. However, U.S. firms are internationally competitive, and growth in world markets offers substantial opportunities to green building firms that aim to provide their services abroad. This paper provides an overview of the U.S. and global markets for green building services; discusses factors that affect supply and demand for sustainable structures; examines trade in green building services as a component of overall trade in construction, architectural, and engineering services; and considers the outlook for the green building industry.
Author(s)
Huang Xianhai, Yang Gaoju, Lu Jing
Abstract
Using the opto-mechatronics industry cluster of Pinghu, China, as a case study, this paper analyzes the international specialization status of China’s advanced-technology industry. Our research indicates that Pinghu’s industry cluster follows an exogenous industry cluster development model, which is typical of China’s advanced technology industries. In this model, government-guided foreign investment comes to a region first and generates learning spillovers for local enterprises, enabling the government to create a public platform for technology innovation. Foreign-owned and local private companies then work together to promote the further development of industry clusters. True to this model, the initial driving force behind the opto-mechatronics industry was the Chinese government, with foreign investment as its engine; then followed the public technology platform and supporting industries. Our study, based on interviews with industry personnel, also indicates that the performance of Pinghu’s opto-mechatronics industry exceeds the national average and that Pinghu is becoming more like an endogenous cluster over time—more market-oriented and increasingly reliant on domestic factors. However, its average value-added ratio was relatively low; imported intermediate inputs still constitute a large share of the value of manufactured output. Thus, although Pinghu’s opto-mechatronics industry enjoys a leading position in China, it remains largely concentrated on processing and assembly, which is at the low-skill-intensive end of the production chain.
Author(s)
Wenkai Sun, Xiuke Yang, Gene Xiao
Abstract
This paper analyzes aggregate return to capital statistics for China, the United States, and Japan in order to investigate the causes of an unusually high investment rate and increasing foreign direct investment (FDI) inflows to China. We also analyze labor’s share of output and capital-output ratio statistics to predict future trends in the return to capital in China. Our findings allow us to come to four conclusions: (1) China’s high investment rate corresponds to a high return to capital in the country, just as high investment rates in the United States and Japan historically correspond to a high return to capital. (2) A comparatively higher return to capital attracted FDI to China. (3) Investment rates among these three countries show no signs of convergence so far. These differences will likely persist, encouraging FDI to continue to flow into China in near future. (4) The return to capital in China will likely decrease in the long run, as the experiences of Japan and the United States indicate, but will only decrease and become stable after a certain level of capital stock and development is reached.
Author(s)
Falan Yinug
Abstract
This article seeks to explain the limited level of high-tech semiconductor production by foreign investors in China. First, the article briefly summarizes the evolution and current state of China’s policy efforts to promote foreign investment in its semiconductor industry. Second, the article shows that foreign front-end semiconductor production in China remains relatively small, despite the lure of the government’s promotional policies and the fact that China is the world’s largest market. The article concludes by identifying two major factors discouraging foreign front-end semiconductor production in China: (1) China’s uncertain business environment for front-end semiconductor production, punctuated by lax intellectual property rights (IPR) protection and enforcement; and (2) restrictive investment and export control policies by foreign governments.
Author(s)
Laura Bloodgood
Abstract
This article surveys trends in U.S. inbound and outbound foreign direct investment (FDI) during 2000-2005. The article examines the major country and regional destinations for U.S. direct investment abroad (USDIA), and foreign direct investment in the United States (FDIUS). After a brief survey of total inbound and outbound FDI, trends are examined by region and by the most significant developed and developing country investment partner countries. Throughout the paper, the analysis pays particular attention to the multinational corporations that are the source of most FDI, along with particularly important mergers, acquisitions, and greenfield investments. By far the largest U.S. FDI partner is Europe, particularly the United Kingdom, Germany, and the Netherlands. Canada ranks second in terms of its overall FDI relationship with the United States. One-third of cumulative USDIA, equal to $623 billion in 2005, is invested in holding companies in a small number of countries, primarily in Europe and the Caribbean, making it difficult to track the final country and industry destinations of this capital, and limiting an understanding of the effects of U.S. FDI. Mexico is by far the most important FDI partner country among developing countries, for both USDIA and FDIUS.
Author(s)
Katherine Linton
Abstract
The Chinese financial sector is illustrative of the hierarchy of privilege that has dominated the country’s transition from a centrally planned economy to a more market-based system. Despite their declining contribution to GDP, large state-owned enterprises (SOEs) sit at the pinnacle of privilege and financial access. They obtain a disproportionate share of funding from all sources: bank loans, stock markets, venture capital, and bond markets. Private firms, domestic and foreign, which in the last five years have played a critical role in China’s growth, face substantial capital access barriers. Greater access to capital markets for these firms, and the full implementation of international standards of lending and market regulation, would fuel China’s fastest growing firms and enterprises and precipitate greater domestic competition.
Political Economy Protection and FDI
Publication Number
2021-05-C
Topic
FDI
Investment
Publication Topics