The UK’s banking FDI flows and Total British FDI: a dynamic BREXIT analysis

Baier, Fabian; Welfens, Paul J. J.

doi:10.1007/s10368-018-00426-x

Cited by 6 publications

(4 citation statements)

References 41 publications

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“…An argument that can be made, however, is that target countries of FDI should focus on other projects, as their corruption levels do not seem to deter FDI. Therefore, focusing on improving infrastructure or generating a business-friendly environment (possibly through reducing corporate taxation, for evidence see Baier and Welfens ( 2019 )) seems to be the way to move forward for these countries. It is also worth noting that FDI is usually associated with positive spill-over effects not just in the technological plane but also in the cultural plane.…”

Section: Policy Conclusion and Further Researchmentioning

confidence: 99%

Does corruption matter for FDI flows in the OECD? A gravity analysis

Zander

2021

Int Econ Econ Policy

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In this paper, the effect of corruption on foreign direct investment (FDI) flows is analyzed. The literature is thus far divided regarding the effects of corruption: One hypothesis argues that corruption greases the wheels of government and is therefore beneficial while the other hypothesis argues that it sands the wheels of government leading to suboptimal results in an economy. For the empirical analysis, a dataset consisting of bilateral FDI data from the OECD and the control of corruption measure from the World Governance Indicators of the World Bank is compiled. To further analyze the effects of corruption the Panama Papers revelation is used as a corruption increasing event and the implementation into law of the OECD Anti-Bribery Convention is used as a corruption decreasing event. Finally, the difference between corruption levels in the target and the origin country, will be examined. Then, a gravity model with dyadic and time-fixed effects is employed to analyze the data. Findings are ambiguous in that corruption is positively correlated with FDI inflows in the target country and negatively correlated with FDI inflows in the origin country. The Panama Papers variable shows strong evidence, that the release of the Panama Papers resulted in a drop in FDI flows. Therefore, it seems that corruption has complex country specific effects and that target and source countries have to adopt varying policies with regards to corruption. The general effect of corruption harms FDI flows, as shown by the Panama Papers revelation.

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Section: Policy Conclusion and Further Researchmentioning

confidence: 99%

Does corruption matter for FDI flows in the OECD? A gravity analysis

Zander

2021

Int Econ Econ Policy

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“…At the same time, it is remarkable that in 2018, the US Council of Economic Advisors argued that Scandinavian EU countries in 2016 were far behind the US in terms of per capita consumption figures, but these arguments are quite inaccurate if one considers effective lifetime per capita consumption; Norway, for example, is no longer 18 points behinds the US as argued in the paper of the Council of Economic Advisers ( 2018b ), rather an adequate lifetime perspective shows that Norway is in fact slightly ahead of the US and if one compares the US lifetime effective per capita GDP with that of Germany and France – where the populations enjoy higher life expectancy than in the United States – the figure for the three countries (with real per capita GDP growth rates in all three countries assumed to be identical in the long run) are equal as the subsequent Table 1 shows. Effective per capita lifetime income means that this income category is net of health care expenditures which relative to GDP is 1/3 higher in the US than in Germany and France; in addition, the relevant comparisons (Baier and Welfens 2019 ) take into account that West European countries have more leisure time and higher – paid – vacations than US workers.…”

Section: Trade Policy Perspectives Under the Trump Administrationmentioning

confidence: 99%

“…In a similar way, the following graph shows the true FDI openness of selected countries. As regards FDI inflows in OECD countries, many crucial factors can be shown within a gravity modelling approach to influence FDI dynamics (Welfens and Baier 2018 ) and in a similar way outward FDI dynamics (Baier and Welfens 2019 ) show clearly the variables that are influencing FDI flows. While FDI flows have become increasingly important in the world economy since the 1980s, the impact of FDI on key economic variables has not been studied broadly, despite the fact that the role of multinational companies has been growing over decades in many countries.…”

Section: Appendix 1: the Optimum Tariff In The Presence Of Outward Fomentioning

confidence: 99%

Trump’s Trade Policy, BREXIT, Corona Dynamics, EU Crisis and Declining Multilateralism

Welfens

2020

Int Econ Econ Policy

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Since 1991 there has been a reinforcement of the World Market Economy, not least since China and the, then new Russian Federation have joined the World Trade Organization and because of EU Eastern enlargement and ASEAN integration deepening, while the Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP) negotiations seemed to indicate stronger regional integration dynamics. With the Trump Administration, the situation has changed dramatically as President Trump is supportive of neither multilateralism in general nor of the EU, which is weakened through BREXIT, in particular. Trump's focus on the US merchandise trade balance deficit is ill-placed and import tariffs imposed on China seem to be excessive as the optimum tariff rate is miscalculated on the basis of the traditional formulawhile a new adequate formula would include the role of sectoral US outward FDI stocks. Asia, the EU and the US could define fighting the Corona World Recession as a global public good, but the United States is weakened in the corona pandemic crisis; the EU is facing serious problems in avoiding a Euro Crisis 2 problem and the €750 billion EU loan package could undermine the Eurozone's stability while being inadequate to minimize the risk of a Euro Crisis 2. At the same time, the prospects for EU cooperation are declining due to political disappointment concerning the national corona pandemic policy in some member countries. An effective anti-corona pandemic policy would mean to organize a consistent EU-ASEAN cooperation or a G20 cooperation with a later extension to UN Organizations, including the IMF, the World Bank and the WHO. Post-corona, global governance could change strongly because of the long-term political scarring effects of the pandemic shock which could undermine EU and Western stability. Networked international leadership in support of multilateralism is an innovativebut difficult-option for EU-ASEAN-Mercosur.

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“…From a macroeconomic perspective, Wielechowski & Czech (2016) found that brexit had a negative impact on UK GDP growth rate. As for the banking system in the U.K., Baier and Welfens (2019) have adopted the Gravity models and use locational banking statistics to estimate the negative effect of Brexit on the movement of Foreign direct investment in the U.K. banking system. The significant uncertainty caused the financial market to fluctuate wildly and caused the stock price to drop sharply, especially for financial institutions.…”

Section: Introductionmentioning

confidence: 99%

Brexit: The Impact of the Fluctuation of Pound Exchange Rate on the Banking Performance and Profitability

Lu¹,

Lu²,

Lv³

2021

AJIBM

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The study investigated the relationship between exchange rate and bank performance or profitability after Brexit. The study uses three performance measures (including return on equity, return on assets, and the ratio of capital to deposit) as dependent variables and five various measures (government expenditure, GDP, inflation rate, and Dummy-Brexit) independent variables. The investigation is performed using data from two levels: one is for a sample of 34 banks in the United Kingdom from 2009 to 2018, another is for the whole country's bank performance. The result indicates a correlation between bank performance and exchange rate during the period of Brexit. However, due to the size and availability of the data, the finding remains to be discussed.

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The UK’s banking FDI flows and Total British FDI: a dynamic BREXIT analysis

Cited by 6 publications

References 41 publications

Does corruption matter for FDI flows in the OECD? A gravity analysis

Does corruption matter for FDI flows in the OECD? A gravity analysis

Trump’s Trade Policy, BREXIT, Corona Dynamics, EU Crisis and Declining Multilateralism

Brexit: The Impact of the Fluctuation of Pound Exchange Rate on the Banking Performance and Profitability

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