Columbia FDI Perspectives | Vale Columbia Center on Sustainable International Investment

Columbia FDI Perspectives is an occasional series of perspectives on important and topical foreign direct investment issues.

The Vale Columbia Center on Sustainable International Investment seeks to promote a robust and wide ranging exchange of perspectives in the FDI area. Accordingly, the opinions expressed by individual authors through the Columbia FDI Perspectives do not necessarily reﬂect the opinions of Columbia University or its partners and supporters.

If you would like to contribute to the Columbia FDI Perspectives, see details here.

Editor-in-Chief: Karl P. Sauvant (Karl.Sauvant@law.columbia.edu)

Managing Editor: Jennifer Reimer (jreimer01@gmail.com)

No. 84: "Inward foreign direct investment: Does it enable or constrain domestic technology entrepreneurship?," by Saurav Pathak, André Laplume and Emanuel Xavier-Oliveira.
There are potential negative effects of FDI on domestic technology-based entrepreneurship in developing countries. Crowding effects in the labor and product markets combined with stronger intellectual property regimes that prevent knowledge spillovers may stifle technology entrepreneurship where it is needed most. 中ちゅう文ぶん版ばん
No. 83: "Untying the land knot: Turning investment challenges into opportunities for all citizens," by Xiaofang Shen.
Land-use conflicts also occur frequently outside the agricultural sector. In dealing with these conflicts, systematic change is necessary to lead to a fair, efficient and transparent system that both encourages investment and safeguards public interests. Diverse examples demonstrate that, although such change is difficult, it is possible and desirable. 中ちゅう文ぶん版ばん
No. 82: "Evaluate Sustainable FDI to Promote Sustainable Development," by John M. Kline.
Prescriptions to increase the role of FDI in promoting sustainable development generally focus on the macro level -- getting policies right and otherwise improving the investment climate. These steps are necessary but not sufficient. Effective implementation processes, especially at the micro project level, are also essential to encourage FDI that matches host country development needs and priorities. 中ちゅう文ぶん版ばん日本語にほんご版ばん
No. 81: "Is China’s outward investment in oil a global security concern?," by Ilan Alon and Aleh Cherp.
The dramatic increase in investment by Chinese SOEs in overseas oil assets is primarily driven by energy security concerns. Whether such investment will benefit or harm energy security of other countries is hotly contested. On one hand, this investment can supplement the overall lack of investment in the sector, benefiting all consumers. On the other hand, it may exacerbate environmental and political problems associated with fossil fuels. 中ちゅう文ぶん版ばん日本語にほんご版ばん
No. 80: "State-controlled entities as “investors” under international investment agreements," by Jo En Low.
A review of the definition of "investor" and investor-state dispute resolution clauses in 851 international investment agreements (IIAs) reveals that, except in two cases, state-controlled entities (SCEs) (including sovereign wealth funds and state-owned enterprises) have equivalent standing to their purely private counterparts as "investors" under such IIAs. This article highlights the various ways in which SCEs are covered under the definition of "investor". 中ちゅう文ぶん版ばん日本語にほんご版ばん
No. 79: "Absent from the discussion: The other half of investment promotion," by Lise Johnson.
Investment treaties can be tools for promoting the quantity and quality of foreign investment that furthers sustainable development. But to do so, they should move beyond their current focus on simply regulating the conduct of host states, and include appropriate home-country commitments to facilitate and encourage outward investment. 中ちゅう文ぶん版ばん日本語にほんご版ばん
No. 78: "Reconciling IMF rules and international investment agreements: An innovative derogation for capital controls," by Elizabeth L. Broomfield.
In the absence of an international framework governing capital controls, a conflict has developed due to the different approaches towards such controls taken by various international organizations and international investment agreements (IIAs). IIAs should incorporate derogations for countries when treaty obligations conflict with IMF recommendations to impose controls in response to severe economic hardship. 中ちゅう文ぶん版ばん
No. 77: "A new economic nationalism? Lessons from the PotashCorp decision in Canada ," by Sandy Walker.
Foreign investors must be alert to the possibility that political sensitivities may impact foreign investment review processes, hence jeopardizing a small number of deals involving perceived national champions. One example, which underlines that politics can occasionally hijack the review of foreign investments, is the Canadian Government’s rejection of BHP Billiton’s takeover of Potash Corporation. 中ちゅう文ぶん版ばん
No. 76: "A good business reason to support mandatory transparency in extractive industries," by Perrine Toledano and Julien Topal.
The Cardin-Lugar Transparency Amendment is a promising step toward ending the resource curse by improving accountability and access to information for both citizens and investors. The Amendment has run into heavy corporate opposition, and its implementation has been much delayed. However, there is a business case for mandatory transparency requirements. 中ちゅう文ぶん版ばん
No. 75: "Attracting FDI through BITs and RTAs: Does treaty content matter?," by Axel Berger, Matthias Busse, Peter Nunnenkamp, and Martin Roy.
The authors analyze empirically whether the impact of BITs and RTAs on bilateral FDI flows depends on the inclusion of two legal innovations: investor-state dispute settlement (ISDS) and pre-establishment national treatment (NT) provisions. Indeed, they find strong evidence that liberal NT provisions promote FDI. ISDS mechanisms appear to play a minor role. Surprisingly, the impact of similar investment provisions on FDI depends on whether these provisions are contained in RTAs or BITs. 中ちゅう文ぶん版ばん
No. 74: "Starting anew in international investment law," by M Sornarajah.
There is a crisis in international investment law brought about by rapid changes in the economic order resulting in movements of capital from erstwhile developing countries like China and India into developed ones. This is accentuated by the stances taken in investment treaty arbitration that restrict regulatory control. The reaction has been to bring about so called "balanced treaties" that neither secure investment protection nor bring about clear rules on regulatory control. There is a need for a new beginning. 中ちゅう文ぶん版ばん
No. 73: "Law at two speeds: Legal frameworks regulating foreign investment in the global South," by Lorenzo Cotula.
The global legal system regulating foreign investment in lower-income countries is more geared towards enabling secure transnational investment flows than it is towards ensuring that these flows benefit people in recipient countries. There is a need to improve national and international law safeguards for rights that may be affected by investment flows, and to strengthen local capacity to exercise those rights and get a better deal from incoming investment. 中ちゅう文ぶん版ばん
No. 72: "Roll out the red carpet and they will come: Investment promotion and FDI inflows," by Torfinn Harding and Beata Javorcik.
Foreign direct investment flows to developing countries are hindered by many factors. Two of these factors -- the mere lack of information and red tape -- could be easily remedied through investment promotion efforts. 中ちゅう文ぶん版ばん
No. 71: "Much ado about nothing? State-controlled entities and the change in German investment law," by Thomas Jost.
Despite a tightening of German foreign investment law in 2009 in reaction to the growing importance of state controlled entities and national security concerns, Germany has remained open for FDI. So far German authorities have handled the new law carefully. But, was the change necessary? 中ちゅう文ぶん版ばん
No. 70: "FDI, catch-up growth stages and stage-focused strategies," by Terutomo Ozawa.
For the initial stage of catch-up growth, the “FDI-led takeoff” is an expedient alternative to the traditional infant-industry protection approach. Higher stages call for more nuanced, national-interests-dictated strategies to enhance domestic knowledge capability. A stages perspective cannot be overemphasized. 中ちゅう文ぶん版ばん
No. 69: "The times they are a-changin’ -- again -- in the relationships between governments and multinational enterprises: From control, to liberalization to rebalancing," by Karl P. Sauvant.
After a long period during which governments made the national and international frameworks for foreign investors more welcoming, a number of indicators suggest that a rebalancing is taking place toward an approach that is more protective of sovereigns, allowing governments more policy space to regulate FDI in the public interest. 中ちゅう文ぶん版ばん
No. 68: "Economic patriotism: Dealing with Chinese direct investment in the United States ," by Sophie Meunier et al..
As Chinese FDI in the United States increases, a few investments are likely to attract negative attention. However, even though hosting Chinese FDI in the United States is not free from risk, the benefits outweigh the costs. As such, the United States should implement policy recommendations to welcome Chinese FDI, while dealing with its potential risks to limit a possible political backlash. 中ちゅう文ぶん版ばん
No. 67: "The Arab Spring: How soon will foreign investors return?," by Paul Antony Barbour, Persephone Economou, Nathan M. Jensen, and Daniel Villar.
The Arab Spring dramatically increased investors’ perceptions of political risk in MENA. An examination of these perceptions indicates long-run optimism that political transitions in the region -- if democratic and coupled with political stability -- could increase FDI and contribute to MENA’s economic development. 中ちゅう文ぶん版ばん
No. 66: "Does it matter who invests in your country?," by Kalman Kalotay.
“Indirect” FDI – investment in which immediate investors differ from ultimate owners – plays an increasingly important role in corporate strategies and financial management. This Perspective analyses its different forms, explores its implications for development and suggests ways to minimize the potential negative impact of such investment. 中ちゅう文ぶん版ばん
No. 65: "The standing of state-controlled entities under the ICSID Convention: Two key considerations," by Mark Feldman.
ICSID tribunals likely will need to address with greater frequency the fundamental issue of whether disputes arising from SCE investments fall within the scope of the ICSID Convention. To help preserve clear ICSID Convention boundaries -- which exclude public foreign investment disputes between states -- ICSID tribunals should consider not only the nature, but also the purpose, of SCE investments. 中ちゅう文ぶん版ばん

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