 |
 |
View this email in your browser <https://mailchi.mp/law/perspective-350?e=dd153d6a25> 哥伦比亚大学国际直接投资展望中文版都可以在我们的网站查看: https://ccsi.columbia.edu/content/columbia-fdi-perspectives <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=35eac81360&e=dd153d6a25> . *Columbia FDI Perspectives* Perspectives on topical foreign direct investment issues Editor-in-Chief: Karl P. Sauvant ([log in to unmask]) Managing Editor: Matthew Conte ([log in to unmask]) *The Columbia FDI Perspectives are a forum for public debate. The views expressed by the authors do not reflect the opinions of CCSI or our partners and supporters.* No. 350 February 6, 2023 *Outward FDI and home country employment* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=f7e9c4e446&e=dd153d6a25> by Riccardo Crescenzi, Roberto Ganau and Michael Storper* <#m_4190107300345734818__edn1> Policymakers often see inward FDI (IFDI) as a key to economic development and outward FDI (OFDI) as a drain on domestic employment and innovation. This reluctance to embrace active, two-sided internationalization is matched by deep ambiguity in scholarly work on the actual economic impacts of OFDI <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=2f8ebd5d43&e=dd153d6a25>. However, IFDI and OFDI are often inextricably connected <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=776ea2d2b3&e=dd153d6a25>, with economic benefits flowing from the two-way internationalization of the local economy. The empirical literature on OFDI has mostly explored impacts internal to investing firms, often overlooking impacts on the wider domestic economy on a local level.[1] <#m_4190107300345734818__edn2> Depending on the nature of the investment, different combinations of labor substitution and complementarity effects may shape home-economy employment differently. Vertical OFDI—involving the relocation abroad of specific parts of the value chain—can induce substitution effects between domestic and foreign labor in the short and medium run. Conversely, in the long run, cost-saving OFDI increases productivity through a scaled-up demand for domestic labor, the consequence of firm growth that stems from internationalization. Horizontal OFDI—involving the relocation abroad of entire business activities (mostly production)—might generate negative home country employment effects due to offshoring. But, if foreign production is mostly supported by inputs and intermediate components from domestic facilities or parent companies, increased sales by foreign affiliates will positively affect the home country.[2] <#m_4190107300345734818__edn3> When considering the net economy-wide impacts, an analysis <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=092b8ff45f&e=dd153d6a25> of OFDI in the US suggests an overall positive link between “greenfield” OFDI and domestic employment levels in local labor markets where investing companies are located. This suggests that local job creation at home and abroad are complementary effects of both horizontal and vertical OFDI, rather than substitutes. However, the employment returns of OFDI vary greatly across industries and regions. Higher local returns to OFDI are associated with high-tech manufacturing and service industries that employ skilled domestic workers. More highly skilled domestic workers are difficult to replace with labor outside the US when engaging in vertical OFDI and are also more likely to contribute to offshored activities in horizontal OFDI. On balance, less developed domestic regions benefit the most when local firms engage in OFDI in high-tech manufacturing and services industries. This suggests that OFDI might offer opportunities for structural transformation in less developed regions, by helping local activities to move up the global value and knowledge hierarchy by investing abroad. However, this effect might also increase intra-regional inequalities between high-skilled and low-skilled workers. Public policies that encourage OFDI could be beneficial to local employment. However, policymakers should carefully consider some key aspects: - First, OFDI is often coupled with increases in intra-regional and inter-personal inequalities. This might work against inclusive and sustainable growth. Governments should adopt complementary measures to spread the benefits of OFDI, such as through training and up-skilling. - Second, regional investment promotion agencies (IPAs <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=c7a16af379&e=dd153d6a25>) should support the dynamism of local ecosystems with the goal of reinforcing local linkages between domestic MNEs and local suppliers.[3] <#m_4190107300345734818__edn4> For example, while Local Content Units—dedicated government bodies that connect new investors with potential local suppliers—have mostly focused on the development of input/output linkages of inward investors, they should extend their action to domestic firms with foreign operations. - Third, regional IPAs, with their sectoral targeting,[4] <#m_4190107300345734818__edn5> are best placed to ensure that OFDI policies are flexibly tailored to country and region socioeconomic specificities and earmarked to priority sectors where appropriate skill complementarities and absorptive capacity[5] <#m_4190107300345734818__edn6> are in place locally.[6] <#m_4190107300345734818__edn7> New evidence offers encouraging insights and suggests that OFDI could be beneficial for less developed regions in home countries. Although more evidence is urgently needed on what tools work in practice, countries should start considering which individual policies could help them maximize OFDI benefits. ------------------------------ * <#m_4190107300345734818__ednref1> Riccardo Crescenzi ( [log in to unmask]) is a Professor of Economic Geography at the London School of Economics; Roberto Ganau ([log in to unmask]) is an Assistant Professor of Applied Economics at the University of Padova; Michael Storper ([log in to unmask]) is a Distinguished Professor of Regional and International Development at UCLA. The authors wish to thank Jan Knoerich, Joserra Perea and an anonymous peer reviewer for their helpful peer reviews. [1] <#m_4190107300345734818__ednref2> S. Lael Brainard and David A. Riker, “Are US multinationals exporting US jobs?,” in David Greenaway and Douglas R. Nelson, eds., *Globalization and Labour Markets* *Vol. II* (Cheltenham: Edward Elgar, 2001), pp. 410–426. [2] <#m_4190107300345734818__ednref3> Giorgio Barba Navaretti, Davide Castellani and Anne-Celia Disdier, “How does investing in cheap labour countries affect performance at home? Firm-level evidence from France and Italy,” *Oxford Economic Papers*, vol. 62 (2010), pp. 234–260. [3] <#m_4190107300345734818__ednref4> Armando Heilbron and Hania Kronfol, *Increasing the Development Impact of Investment Promotion Agencies* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=3a8b1df53d&e=dd153d6a25> (Washington D.C.: World Bank, 2020). [4] <#m_4190107300345734818__ednref5> Riccardo Crescenzi, Marco Di Cataldo and Mara Giua, "FDI inflows in Europe: Does investment promotion work? <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=8ac2c6ffc3&e=dd153d6a25>,” *Journal of International Economics*, vol. 132 (2021), p. 103497. [5] <#m_4190107300345734818__ednref6> P. Criscuolo and R. Narula, “A novel approach to national technological accumulation and absorptive capacity: Aggregating Cohen and Levinthal,” *The European Journal of Development Research*, vol. 30 (2008), pp. 56–73. [6] <#m_4190107300345734818__ednref7> Riccardo Crescenzi and Oliver Harman, *Harnessing Global Value Chains for Regional Development* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=b62b97fe0a&e=dd153d6a25> (Milton Park: Taylor & Francis, 2022). *The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Riccardo Crescenzi, Roberto Ganau and Michael Storper**, ‘**Outward FDI and home country employment,**’ *Columbia FDI Perspectives *No. 350, February 6, 2022. Reprinted with permission from the Columbia Center on Sustainable **Investment (**http://ccsi.columbia.edu* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=60c18240f4&e=dd153d6a25>*).” A copy should kindly be sent to the Columbia Center on Sustainable Investment at **[log in to unmask]* <[log in to unmask]>*.* For further information, including information regarding submission to the *Perspectives*, please contact: Columbia Center on Sustainable Investment, Matthew Conte, [log in to unmask] *Most recent Columbia FDI Perspectives* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=c96e94e0e1&e=dd153d6a25> - No. 349, Jose Godinez and Mahmoud Khalik, “Corruption and FDI: The role of social brokers <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=0d20aafed1&e=dd153d6a25>,” *Columbia FDI Perspectives*, January 23, 2022 - No. 348, Gary Gereffi, “How to make global supply chains more resilient <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=1fb07f1a51&e=dd153d6a25>,” *Columbia FDI Perspectives*, January 9, 2023 - No. 347, Bernard M. Hoekman and Petros C. Mavroidis, “Investment facilitation in the WTO: The case for early harvesting <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=9a28e8903f&e=dd153d6a25>,” *Columbia FDI Perspectives*, December 26, 2022 *All previous FDI Perspectives are available at https://ccsi.columbia.edu/content/columbia-fdi-perspectives <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=0dc753bbab&e=dd153d6a25>* . *Other relevant CCSI news and announcements* - *Register now* for our next series of online preparatory workshops in advance of the forthcoming convening of the United Nations Commission on International Trade Law’s Working Group III on investor-state dispute settlement reform. Each workshop will cover topics anticipated on the agenda of the March 2023 working group session. Workshops will take place *February 9, February 14, March 1, *and *March 16* from *9:00-11:00 am ET*. *For more information, and to register, visit our WGIII webpage <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=59707dc6b9&e=dd153d6a25>**. Individual registration links for each of the workshops can be found under the heading “Preparatory Sessions for Government Delegates.”* - CCSI and the Sabin Center for Climate Change Law are hiring for the position of *Senior Legal Researcher, Climate Law & Finance*. The researcher will work collaboratively with CCSI's and the Sabin Center’s Leadership and Research Staff to analyze the interrelated legal, finance, and policy pathways critical to achieving global climate goals and facilitating the energy transition, and the corresponding implications for public, private, and institutional financial sector actors, regulators, and alliances. *More details on the position and instructions for applying can be found here <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=b1d96368bc&e=dd153d6a25>* . - *Apply now* for our 2023 virtual *Executive Training Program on Extractive Industries and Sustainable Development* from* June 5–16, 2023*. The interdisciplinary program is designed to equip participants with the necessary skills to promote the responsible development of the extractive industries in resource-rich developing countries and to encourage a rich dialogue about best practices from around the globe. Applications will be considered on a rolling basis until March 31, 2023. *For more information, and to apply, visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=f7ffffa907&e=dd153d6a25>* . - *Apply now* for our 2023 virtual *Executive Training Program on Sustainable Investments in Agriculture* from May 2-12, 2023. This interdisciplinary program explores challenges and solutions for advancing sustainable investments in agriculture. It includes asynchronous and synchronous components, including short and interactive live sessions dedicated to engagement with course lecturers and participants from around the world. Applications will be considered on a rolling basis until March 15, 2023. *For more information, and to apply, visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=6e9f0de3a3&e=dd153d6a25>* . Karl P. Sauvant, Ph.D. Senior Fellow Columbia Center on Sustainable Investment Columbia Law School - Columbia Climate School *Copyright © 2023 Columbia Center on Sustainable Investment (CCSI), All rights reserved.* [log in to unmask] *Our mailing address is:* Columbia Center on Sustainable Investment (CCSI) Columbia Law School - Columbia Climate School, Columbia University 435 West 116th Street New York, NY 10027 Add us to your address book <https://columbia.us6.list-manage.com/vcard?u=ab15cc1d53&id=a61bf1d34a> unsubscribe from this list <https://columbia.us6.list-manage.com/unsubscribe?u=ab15cc1d53&id=a61bf1d34a&e=dd153d6a25&c=2464eace53> update subscription preferences <https://columbia.us6.list-manage.com/profile?u=ab15cc1d53&id=a61bf1d34a&e=dd153d6a25&c=2464eace53> [image: Email Marketing Powered by Mailchimp] <http://www.mailchimp.com/email-referral/?utm_source=freemium_newsletter&utm_medium=email&utm_campaign=referral_marketing&aid=ab15cc1d53&afl=1> -- *Karl P. Sauvant, PhD* *Senior Fellow* *Columbia Center on Sustainable Investment* Columbia Law School, Columbia University 435 West 116th St., Rm. JGH 825, New York, NY 10027 | p: (212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask] | w: www.ccsi.columbia.edu | t: @CCSI_Columbia <https://twitter.com/CCSI_Columbia> "Three Reasons Why a WTO Agreement on Investment Facilitation for Development is Important <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4285857>", "Six Reasons for Emphasizing Responsible Business Conduct in the Nascent WTO Agreement on Investment Facilitation for Development <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4249357>", "The WTO Investment Facilitation for Development Agreement Needs a Strong Provision on Responsible Business Conduct <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4158425>", *Investment Facilitation for Development: A Toolkit for Policy Makers. Second Edition <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3830031>,* "Agenda for Practice-oriented Research <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4103768>", "How Would a Future WTO Agreement on Investment Facilitation for Development Encourage Sustainable FDI Flows, and How Could it be Further Strengthened? <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4084032>”, "Incentivising Sustainable FDI <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3420573>", "Green FDI: Encouraging Carbon-neutral Investment <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3943705>", "Extending International <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3939019> Legal Aid from Trade to Investment: An Advisory Centre on International Investment Law <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3939019> ", "More Attention to Policies! Improving the Distribution of FDI Benefits <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3818974>", "Facilitating Sustainable FDI in a WTO Investment Facilitation Framework: Four Concrete Proposals <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3496967>", "An Inventory of Concrete Measures to Facilitate the Flow of Sustainable FDI: What? Why? How? <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3739179>", are available at https://ssrn.com/author=2461782 . ____ AIB-L is brought to you by the Academy of International Business. For information: http://aib.msu.edu/community/aib-l.asp To post message: [log in to unmask] For assistance: [log in to unmask] --- You must be an active AIB member to post to AIB-L . AIB-L has a moderator which checks messages for basic relevance. However, AIB does not edit or screen messages for accuracy or reliability of content. All subscribers are recommended to perform their own due-diligence before responding to any requests or calls. AIB accepts no liability for the content of this email, or for the consequences of any actions taken on the basis of the information provided.