Foreign direct investment determinants revisited in the context of global value chains

In this paper, we aim at contributing to the new field of research that intends to bring up-to-date the tools and statistics currently used to look to the current reality given by Global Value Chains (GVC) in international trade and Foreign Direct Investment (FDI). Namely, we make use of the most recent data published by the World Input-Output Database to suggest indicators to measure the participation and net gains of countries by being a part of GVC; and use those indicators in a pooled-regression model to estimate determinants of FDI stocks in Organization for Economic Co-operation and Development (OECD)-member countries. We conclude that one of the measures proposed proves to be statistically significant in explaining the bilateral stock of FDI in OECD countries, meaning that the higher the transnational income generated between two given countries by GVC, taken as a proxy to the participation of those countries in GVC, the higher one could expect the FDI entering those countries to be. The regression also shows the negative impact of the global financial crisis that started in 2009 in the world’s bilateral FDI stocks and, additionally, the particular and significant role played by the People’s Republic of China in determining these stocks.

An analysis of Directive IORP II

Mestrado em Ciências Actuariais

Economic growth and public and private investment returns

We study the macroeconomic effects of public and private investment in 17 OECD economies through a VAR analysis with annual data from 1960 to 2014. From impulse response functions we find that public investment had a positive growth effect in most countries, and a contractionary effect in Finland, UK, Sweden, Japan, and Canada. Public investment led to private investment crowding out in Belgium, Ireland, Finland, Canada, Sweden, the UK and crowding-in effects in the rest of the countries. Private investment has a positive growth effect in all countries; crowds-out (crowds-in) public investment in Belgium and Sweden (in the rest of the countries). The partial rates of return of public and private investment are mostly positive.

Macroeconomic rates of return of public and private investment : crowding-in and crowding-out effects

Using annual data from 14 European Union countries, plus Canada, Japan and the United States, we evaluate the macroeconomic effects of public and private investment through VAR analysis. From impulse response functions, we are able to assess the extent of crowding-in or crowding-out of both components of investment. We also compute the associated macroeconomic rates of return of public and private investment for each country. The results point mostly to the existence of positive effects of public investment and private investment on output. On the other hand, the crowding-in effects of public investment on private investment vary across countries, while the crowding-in effect of private investment on public investment is more generalised.