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View this email in your browser <https://mailchi.mp/law/perspective-355?e=1c36d4a4fd> 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=ee30a17186&e=1c36d4a4fd> . *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. 355 April 17, 2023 *Investment promotion in the new international context: what is the next frontier and how to get there* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=3d984abad6&e=1c36d4a4fd> by Fabrizio Opertti and Christian Volpe Martincus* Investment promotion is an effective policy to address information frictions. Assistance by investment promotion agencies (IPAs) has had significant positive effects on the probability of MNEs establishing a first foreign affiliate (and expanding their presence), at least in Latin America. Importantly, such interventions have been cost-effective <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=f0a2464be0&e=1c36d4a4fd>: each US$1 spent on investment promotion generates up to US$56 of additional FDI.1 While this is encouraging, IPAs face the challenge of remaining relevant and further increasing their effectiveness within a new, more uncertain global environment. The latter is characterized by the digital transformation of the economy, the introduction of a rising number of cross-institutional trade and investment policy interventions, greater awareness that global supply chains have vulnerabilities (and that firms and countries thus need to build resilience), and the sustainability imperative. To cope with these challenges, IPAs must act simultaneously and in a coordinated manner in several areas, primarily relating to *how* they promote FDI:2 - *Go digital*. IPAs need to leverage more and better information and communication technologies to perform their operational functions. In particular, IPAs should draw on the increased availability of specialized digital tools to expand and improve their portfolio of (digital) services and provide their clients with more agile, effective assistance. These include, for example, data collection and visualization tools for investment generation and virtual mapping and site selection and matchmaking tools for investment facilitation. These tools should be fully and consistently integrated into IPA information systems and should ideally inter-operate with those of other relevant entities.3 - *Mainstream sustainability and gender equality in promotion approaches and metrics*. Well-defined activity and outcome indicators based on relevant underlying micro- or at least sector-level statistics on pollution, gender and inclusiveness in general should be used for FDI-targeting purposes and become standard components of IPAs’ dashboards <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=1077a90735&e=1c36d4a4fd>. These indicators include for instance, greenhouses emissions relative to production levels, the share of women in total employment (or leadership positions) and jobs created outside of capital cities (which is used by IDA Ireland), either for specific MNEs as reported in proprietary ESG or administrative databases or for their respective sectors as computed based on publicly available statistics (e.g., OECD and US BLS data). - *Improve promotion strategies by making them evidence-based*. There are more than 200,000 MNEs globally, and they differ in attributes and performance measures, including revenues and networks of affiliates. IPAs should make systematic use of trade and multinational production microdata by applying new technologies and methods such as machine learning.4 These can help IPAs predict the probability of specific MNEs establishing affiliates in their countries and allow them to use this information to guide promotional efforts. IPAs, especially those from developing countries, can build this capacity by working together with international organizations and academia. In fact, the IDB is currently collaborating with several Latin American IPAs in this area.5 - *Institutionalize monitoring and evaluation practices* and carry out systematic, comprehensive impact assessments that go beyond direct effects and examine the indirect effects of investment promotion on the local economy.6 This requires IPAs to generate better data and integrate better third-party data. Specifically, IPAs should: (i) enhance their recording capabilities to generate granular information on the services they offer and their costs; (ii) create and use a consistent, unified register of MNEs established in their countries; and (iii) establish inter-institutional collaborations with the tax, customs and social security agencies, the statistical office, and the central bank to obtain microdata that enable the tracking of sales and purchases between firms and individuals’ labor histories across firms over time. Combined with MNE registers, this would help identify transactions and labor turn-over involving foreign affiliates and measure spillovers from MNEs to domestic firms. The experience of Costa Rica’s CINDE in conducting this kind of study is illustrative. - *Coordinate programs as much as possible.* The effectiveness of investment promotion depends on contextual factors such as the institutional ecosystem and other policies. Thus, attracting foreign affiliates and participating in global value chains (GVCs) will be more successful if crossing borders is easy. Investment promotion programs should therefore be coordinated with trade facilitation and export promotion counterparts, as well as with innovation and linkage programs, given the highly integrated nature and complementarities between exports, FDI and multinational production, particularly within GVCs. When implementing the above recommendations, IPAs should combine longer-term plans with consistent annual action-lines. They should introduce mechanisms such as periodic structured revisions that allow agile adjustments to policy and business conditions that are likely to arise in the new international context. ------------------------------ * Fabrizio Opertti ([log in to unmask]) is the Manager of IDB’s Integration and Trade Sector, where he supervises an operational team in charge of a large portfolio of international trade and FDI promotion, loan and technical cooperation projects in Latin America; Christian Volpe Martincus ( [log in to unmask]) is Principal Economist at the IDB’s Integration and Trade Sector, where he leads the research on trade and investment policies associated with IDB operations, the impact evaluations of these operations and the IDB academic trade policy networks.. The views expressed here do not necessarily reflect the views of the institutions with which the authors are affiliated. The authors wish to thank Armando Heibron, Manfred Schekulin and Bostjan Skalar for their helpful peer reviews. 1 This estimate is based on a sample of 12 Latin American countries. See the IDB flagship report on investment promotion <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=ae9ad781ae&e=1c36d4a4fd> for additional details. 2 Least developed countries’ IPAs need to consolidate basic institutional aspects and operational and technological practices to be able to implement these recommendations. 3 The IDB is preparing a report mapping IPAs’ use of innovative digital tools. 4 Machine learning refers to the use of algorithms that are trained on subsets of data to predict outcomes. 5 With Costa Rica’s CINDE, Invest Chile and URUGUAY XXI. 6 Insights from these assessments can feed back into monitoring of investment climate and policy advocacy. *The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Fabrizio Opertti and Christian Volpe Martincus, ‘Investment promotion in the new international context: what is the next frontier and how to get there,’ Columbia FDI Perspectives, No. 355, April 17, 2023. 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=41d0765e94&e=1c36d4a4fd>*).” 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=96f287fdd2&e=1c36d4a4fd> - No. 354, Martin Wermelinger, “What can governments do to boost FDI for sustainable development? <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=1383bf8d64&e=1c36d4a4fd>” *Columbia FDI Perspectives*, April 3, 2023 - No. 353, Mark Feldman, “An opportunity to reimagine investment arbitration in Beijing <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=845eeee8f8&e=1c36d4a4fd>,” *Columbia FDI Perspectives*, March 20, 2023 - No. 352, Nicola Woodroffe and and Erica Westenberg, “Governments and companies must address climate and governance risks when petroleum assets change hands <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=16b4fe3804&e=1c36d4a4fd>,” *Columbia FDI Perspectives*, March 6, 2023 *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=252fd6ce7f&e=1c36d4a4fd>* . *Other relevant CCSI news and announcements* - CCSI is seeking an *Associate Research Scholar *to help carry forward the Center’s diverse research agenda. This position will collaborate with CCSI's Director and Research Staff to execute the Center’s applied research agenda on the laws, policies, and practices that shape international investment and its alignment with sustainable development and human rights. Specifically, the incumbent will supervise and contribute to ongoing advisory, research, and technical support projects with the goal of advancing more responsible and rights-respecting laws, policies and practices in land and resource investments <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=3829662d0e&e=1c36d4a4fd> (e.g. agriculture, renewable energy and mining projects) at the local, national and international level. The ideal candidate will also be able to lead or contribute to work related the Center’s other primary focus areas <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=9376197a4f&e=1c36d4a4fd>, including investment law and policy, natural resource governance, the energy transition, or SDG-aligned finance. *More details on the position, and how to apply, can be found here <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=8f9a064351&e=1c36d4a4fd>.* - CCSI and the Sabin Center for Climate Change Law are hiring for the position of *Associate Research Scholar or Senior Staff Associate, Climate Law & Finance*. The research scholar or staff associate 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. *Please note that there are two different application channels for this posting: we are accepting applicants with a JD (or equivalent legal degree) or PhD degree as well as applicants with other degrees. **More details on the position and instructions for applying can be found here <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=d7e8257542&e=1c36d4a4fd>* . - *Applications are now open* for our 2023 virtual Executive Training on Investment Treaties and Arbitration for Government Officials from *September 18-22, 2023*. This course is designed for government officials facing complex and pressing issues concerning international investment treaties. The course will address: States’ objectives in their investment policy; links between treaties, investment flows, and development objectives; investor-state dispute settlement, and the concerns of states; trends and developments in treaty practice; opportunities and challenges facing governments in treaty reform; and other approaches to investment governance. *Applications will be considered on a rolling basis until July 15, 2023. **For more information, and to apply, visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=ae3119ec6c&e=1c36d4a4fd>.* Karl P. 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