Transaction costs: an empirical analysis of their relationship with investment and foreign direct investment

As stated by the New Institutional Economics theory, transaction costs play a relevant role in economics and, according to the extent of such costs, agents make investment decisions. Actually, transaction costs may represent a disincentive to entrepreneurship. This work aims to verify whether transaction costs are related to investment rate and foreign direct investment rate (FDI) in different business environments. The results suggest that foreign investors do not have precise information about other countries as domestic investors do; as it is observed, only the relation between transaction costs and investment rate is significant. Furthermore, there is evidence that the business environments of BRIC countries are less developed when compared to business environments of other countries in the study

Crawling up the value chain: domestic institutions and non-traditional foreign direct investment in Brazil, 1990-2010

Brazil attracted relatively little innovation-intensive and export-oriented foreign investment during the liberalization period of 1990 to 2010, especially compared with competitors such as China and India. Adopting an institutionalist perspective, I argue that multinational firm investment profiles can be partly explained by the characteristics of investment promotion policies and bureaucracies charged with their implementation. Brazil's FDI policies were passive and non-discriminating in the second half of the 1990s, but became more selective under Lula. Investment promotion efforts have often been undercut by weakly coordinated and inconsistent institutions. The paper highlights the need for active, discriminating investment promotion policies if benefits from non-traditional FDI are to be realized.

INTERNATIONALIZATION OF STATE-OWNED ENTERPRISES THROUGH FOREIGN DIRECT INVESTMENT

ABSTRACT State-owned enterprises (SOEs) are created to focus on domestic needs, and yet recent evidence points to increasing outward foreign direct investment by SOEs. Existing International Business (IB) theories focus on efficiency-based motives for internationalization; therefore, they do not fully capture SOEs' internalization dynamics, which are driven largely by political factors and social welfare considerations. We integrate public management and IB theories to develop propositions that combine these questions: why SOEs internationalize; what are their motivations; and what are the main managerial outcomes of SOEs' internationalization. Our findings suggest that SOEs display little hesitancy in entering international markets, and that SOE international expansion is not contradictory with the goals of state-ownership if the purpose is to adjust the company to changing institutional environments both in the domestic and international markets. Our propositions about SOE internationalization are based on an in-depth case study of the outward foreign direct investment conducted by Brazil's Petrobras over the past three decades.

Earnings management and economic crises in the brazilian capital market

The 2008 economic crisis challenged accounting, either demanding recognition and measurement criteria well adjusted to this scenario or even questioning its ability to inform appropriately entities' financial situation before the crisis occurred. So, our purpose was to verify if during economic crises listed companies in the Brazilian capital market tended to adopt earnings management (EM) practices. Our sample consisted in 3,772 firm-years observations, in 13 years - 1997 to 2009. We developed regression models considering discretionary accruals as EM proxy (dependent variable), crisis as a macroeconomic factor (dummy variable of interest), ROA, market-to-book, size, leverage, foreign direct investment (FDI) and sector as control variables. Different for previous EM studies two approaches were used in data panel regression models and multiple crises were observed simultaneously. Statistics tests revealed a significant relation between economic crisis and EM practices concerning listed companies in Brazil in both approaches used.

Fluxos de investimento direto externo, competitividade e conteúdo tecnológico do comércio exterior da China no início do século XXI

Foreign direct investment flow, competitiveness and technological structure of foreign trade in China in the beginning of the 21st century. China's government introduced open market reforms in 1979, mediated by industrial policies improving the ability of attracting higher quality FDI (Foreign Direct Investment), which helped China's economy developing its technological capabilities. As a result, China's share in international trade rose impressively becoming third-largest trading nation in the world, by 2004, also its export structure is significantly more sophisticated. Facing the importance of understanding the determinants of developing word specialization patterns, this paper focuses on the competitiveness and technological structure of exports and imports by China for 1994-1998 and 2001-2005.

Investimento direto externo, acumulação de capital produtivo e distribuição de renda: uma abordagem pós-keynesiana

It is developed a macrodynamic model in the post-keynesian tradition of political economy of the productive capital accumulation and income distribution to analyze some of the impacts of the (flow of) foreign direct investment and the (stock of) foreign productive capital on capital accumulation, economic growth and functional income distribution in a stylized economy. Alongside a usual demand effect, the impacts of such an internationalization of local capital through labor productivity and market concentration are taken into account as well.

Investimento direto estrangeiro e o desempenho das exportações brasileiras

Brazil, in the 1990s, assumed a remarkable position as a host of foreign direct investment. It is worth mentioning that the service sector received the highest proportion of foreign investment. This market seeking strategy was responsible for the growth of the Brazilian imports. The results are confirmed by the performance of foreign enterprises into different groups of activities. Those enterprises with majority of foreign capital have increased their imports the most from 1995 to 2000. Therefore, during the 1995-2000 period, this study does not support the view that foreign investment has directly improved the performance of the Brazilian exporting sector.

Uma análise da estratégia nacional de desenvolvimento da Malásia

This paper aims at studying Malaysia's national development strategy in the last three decades. Firstly, we will give emphasis to the country's economic planning development, its medium-term and long-term plans, as well as Mahathir's political influence. Secondly, we will try to identify key elements in the Malaysian growth process, such as its exchange rate and current account policies, the participation of the government in the whole process and matters related to domestic savings and foreign direct investment. We will also talk about the 1997 financial crisis.

Os fluxos de IDE no Brasil nos anos 1990: uma revisão de literatura à luz das transformações em curso

The flows of foreign investments in Brazil starting from the 1990s have called attention due to the magnitude of the invested value, the prevalence of properties acquisitions as a preferential way of carrying out these investments, and for the primacy of the operations involving rivals companies. This article searches for an explanation for the cycle of foreign direct investment flows, which is happening in Brazil. Arguments were reconsidered on the existence of sole assets and the advantages of property and control as a basis for carrying out overseas investments, and to explicit their link with the M&As.

A internacionalização das empresas espanholas

The internationalization of Spanish companies. The purpose of this article is to present the process of (late) internationalization of Spanish companies occurred between the years of 1990 and 2000, its determinants and the degree of involvement of the State in this process. We can point out some determinants in this process, such as: a fall in the profitability of the domestic market, a shrinking of the Spanish market, imminent danger of the acquisition of Spanish companies in the local market due to trade and financial openness. We conclude that this process was not fortuitous. There was a clear perception by the government that this process would not only be relevant but also necessary for the entrance of Spain in the international economic and geo-political set.

Por que a poupança externa não promove crescimento

Why foreign saving fail to cause growth. The present paper is a formalization of the critique of the growth with foreign savings strategy. Although medium income countries are capital poor, current account deficits (foreign savings), financed either by loans or by foreign direct investments, will not usually increase the rate of capital accumulation or will have little impact on it in so far as current account deficits will be associated with appreciated exchange rates, artificially increased real wages and salaries and high consumption levels. In consequence, the rate of substitution of foreign savings for domestic savings will be relatively high, and the country will get indebted to consume, not to invest and grow. Only when there are large investment opportunities, stimulated by a sizeable difference between the expected profit rate and the long term interest rate, the marginal propensity to consume will get down enough so that the additional income originated from foreign capital flows will be used for investment rather than for consumption. In this special case, the rate of substitution of foreign for domestic savings tend to be small, and foreign savings will contribute positively to growth.

Investment in the Brazilian economy during the crisis

In this short article, it is analyzed as to whether financial flows and credit concessions explain the behavior of investment in the Brazilian economy during the 2008 crisis. Beyond the importance of demand, changes in expectations seem to be an important source of instability in investment and, as a consequence, in the economy.

O comportamento recente do investimento direto brasileiro no exterior em perspectiva

The recent behavior of the Brazilian direct investment abroad in perspective. This paper analyzes the recent behavior of the Brazilian direct investment abroad, as captured by an annual census conducted by the Central Bank of Brazil since 2001, by putting it in a broader perspective that includes international official data sources and early sample studies. Though the Central Bank has not been making available more disaggregated data than those analyzed here, it is intended to contribute to a better grasping of the perspectives of competitive internationalization of local firms, which is desirable not only as far as the external accounts are concerned, but also from the viewpoint of the technological capabilities of the local firms.

Dr Brasilia and Mr. Nacala: the apparent duality behind the Brazilian state-capital nexus

In August 2010 Brazil decided to limit foreign direct investments (FDIs) in land, and attracted the attention of politicians as much as the fears of businessmen. However, few months before, in September 2009, it had concluded a trilateral agreement with Japan and Mozambique to implement agribusiness and contract farming on an area of ten million hectares in the Mozambican region of Nacala. In light of that, the paper analyses the apparent duality of the Brazilian politics, and concludes that, exactly like in the case of the novel by Robert Louis Stevenson, it is not a matter of pathology, but a voluntarily induced double personality which is strategic in positioning Brazil at the core of the global capitalist system.