FOREIGN DIRECT INVESTMENT OUTFLOW FROM ASIAN COUNTRIES TO EU MEMBER STATES

Preface

This FDI Book is the result of a joint effort of academic professional authors from European, Asian and The North American universities to review the trends in foreign direct investment flow from Asia to Europe and to systemise the knowledge in this subject. This monograph has the character of a textbook introducing the area of Asian investments in Europe and constitutes a case study of selected Asian countries as well as their selection. Chosen Asian countries like China, India, South Korea and Japan are the most of the interest of the authors. Presented individual cases in each chapter by the authors give interesting insight and variety of FDI inflow concepts and outcomes in the global economy. The development of Asian studies and related didactics are very important premise of this publication. The main research question raised in this book is how does foreign direct investment from chosen Asian countries to Europe look like? The other questions are related to the main one as following; (1) What is the impact of global financial crisis on the foreign direct investment in Europe? (2) What is the effect of a foreign direct investment flow on the Asian currency market? (3) What are the distinctive features of foreign direct investment from China to Poland and Germany? (4) What are the main characteristics of Japanese FDI outflow to Poland? (5) Why the region of Spain Catalonia was chosen by Japan for FDI outflow? (6) How do government authorities in chosen Asian countries supports foreign direct investment outflow to EU countries?

The choice of the title of his book focuses mainly on investment outflow from chosen Asian countries to EU member states rather than inflow due to the fact that this area of studies is not a common choice of the researchers. Despite numerous publications on the EU-Asia economic relations, there may be found still only few studies dedicated to Asian investments in the EU countries. It should be emphasized that this is the case despite the fact that a systematic increase in these investments is noted, especially Chinese ones, since 2001. In particular, there are no comprehensive monographs presenting Asian investments in EU countries that would go beyond discussing one case study.

The literature overview presented in Chapter 1 confirmed that there is limited number of such studies done recently on international level by the assigned group of academic researchers. One of the reasons for that could be the nature of FDI which is mainly inflow then outflow to Asian countries, but outflow from Asian countries into EU was definitely improving in analysed periods by each individual author. The authors chose different periods according to their best knowledge and data availability. These periods are in range of 1990-2020. Due to the different topics raised in each chapter and analysed period by the authors there is a common bridge as of Foreign Direct Investment outflow from Asian countries to specific EU member state such as Germany, Spain, Poland. Chapter 2 and Chapter 3 are important inputs of this book presenting econometric models. The authors in Chapter 2 from Iceland focused on the link between global crisis and FDI flow in Europe applying gravity model approach which compared three economic factors: FDI flows, FDI stocks, and portfolio-equity capital flows. Findings show larger investment share in the form of FDI and the influence of global crisis on FDI inflow to EU countries was proved. Another interesting model was presented by the author in Chapter 3. The model which was applied by the author was Vector Autoregressive model explaining the impact pressure of FDI flow on the Asian currency market. The author used an index of Exchange Market Pressure (EMP) to explained that impact in chosen Asian countries such as India, Japan, Malaysia, China, South Korea in period from 1999 to 2019. This is important aspect of FDI flow which can be measured and analysed to steer FDI flow inter- nationally by Asian investing countries. Asian countries impact global trade significantly in era of world economy globalisation and digitalisation. Even though there was a drop in global FDI in 2018 new standards were created in foreign direct investments, international trade policy, business models and requirements for security of transactions between Asian countries and EU member states. In 2018 according to UNCTAD statistics Japan and China were leaders in FDI outflow in value terms but Hong Kong and Singapore had the highest FDI/GDP ratios of 23,5% and 10,7% respectively . On the contrary India was still rather FDI inflow type country but since 2018 there are more outflow investment activities in European countries such as Germany, Spain, Iceland and CEE region of Europe especially Poland related to the recent initiatives and Indian government programs created and supported by dedicated Indian Authorities. From the point of view of FDI recipients in Central Europe, including Poland, data on Chinese and Japanese FDI in Poland present- ed in Chapter 4 and Chapter 5 are quite valuable. Especially in the case of the latter, the chapters are innovative, as there are not many publications in this field on the publishing market. Another interesting aspect of FDI outflow described by the author based on the China case from perspective of the digitalization was presented in Chapter 7. It is very important feature of Chinese FDI policy to reach a dominance in many sectors globally with a specific focus on the infrastructure and to manage a global digital ecosystem. The author of in Chapter 8 confirmed a Chinese involvement increase on the investment side in Germany in period 1989-2017. The attractiveness of Germany was reflected in a huge number of individual investment decisions, and had the temporal status of a long term development, which enabled Germany to build up its reputation as excellent investment hub especially started from 2004. As the interesting future of Chinese FDI in Germany is worth stated that Chinese investments into German economy was about small and medium companies in analysed period by the author.

Besides China there was also important individual case of Japan's FDI inflow to Spain (mainly Catalonia in 2010 onwards) presented in Chapter 6. Interesting observation regarding Japanese FDI in Spain was a concentration of the Japanese companies in one of the regions in Spain - Catalonia. It was explained that one of the reasons of that was a support of local Agencies of investment promotion which helped Japanese companies to invest in that region of Spain. That idea of investment support by government agencies was also analysed by the authors in the Chapter 9 regarding not only Japan but also India, China and South Korea. It is worth to state that EU created one of the most open investment systems in the world but most of the EU authorities or dedicated agencies rather support FDI outflow from EU to Asia than from Asia to EU countries. The main focus of EU for collaboration are still the following countries such as India, China, Japan and South Korea. That is why the topic of this FDI book is important from global economy perspective.

Considering each chapter as the individual case study the chosen problems in the context of FDI outflow such as Asian currency market, investments in European digital platforms, supporting roles of dedicated government authorities described by the different authors in this book Foreign Direct Investment outflow from Asian countries to EU Member states get more attention of the governments of different Asian countries while shaping their outflow foreign direct investment policy. EU economy needs Asian capital and cooperation with multinational Asian companies to establish friendly business environment for bilateral trade agreements between EU and Asian countries especially India which is still not signed. Both Europe and India have common goals raised during recent Raisina Dialog in 2020 like global governance, multilateralism, development of trade in Indo- Pacific region, to make World Trade Organisation to survive, and strategic partnership in 2025 in areas from maritime security to digital. This book gives the insight on those problems and a distinguishing feature of the book is the accurate selection of the most important, key information on Asian FDI in the EU countries.

P K Biswas & Robert Dygas

Preface

Chapter 1

Research Literature Analysis on FDI and FDI Flow between Asia  and the EU Member States

- Dr. Smita Shukla, University of Mumbai

Chapter 2

The Global Financial Crisis and Foreign Direct Investment in Europe

- Prof. Helga Kristjánsdóttir, University of Akureyri, and Prof. Stefanía Óskarsdóttir,  University of Iceland

Chapter 3

The Effect of Capital Flows on Asian/Euro Exchange Market Pressure

- Prof. Scott W. Hegerty, Northeastern Illinois University, Chicago

Chapter 4

FDI outflow from China to Poland - Two Decades of Chinese FDI in Poland

- Dr. Agnieszka McCaleb, SGH Warsaw School of Economics

Chapter 5

Japanese Foreign Direct Investment in Poland

- Dr. Anna Dzienis, SGH Warsaw School of Economics

Chapter 6

Japanese FDI in Spain: Why do Japanese Firms locate in Catalonia?

- Prof. Makiko Narita, University of Nagasaki

Chapter 7

FDI outflow from China to EU Countries - Exploring Alternative Futures  for Chinese Investments in European Digital Platforms

- Prof. Meelis Kitsing, Estonian Business School

Chapter 8

FDI Outflow from China to Germany

- Dr. habil. Andreas Bielig, SGH Warsaw School of Economics

Chapter 9

Role of Government Authorities in facilitating Asian FDI outflow to EU Member States

- Prof. Prana Krishna Biswas IMT Ghaziabad, Dr. Robert Dygas SGH Warsaw School  of Economics

ACKNOWLEDGEMENTS AND CONCLUSIONS

Authors and their email IDs