nep-ifn New Economics Papers
on International Finance
Issue of 2023‒07‒10
four papers chosen by
Jiachen Zhan
University of California,Irvine

  1. The 2022 EU Industrial R&D Investment Scoreboard By GRASSANO Nicola; HERNANDEZ GUEVARA Hector; FAKO Peter; NINDL Elisabeth; GEORGAKAKI Aliki; INCE Ela; NAPOLITANO Lorenzo; RENTOCCHINI Francesco; TUEBKE Alexander
  2. The equity-efficiency trade-off of the European cohesion policy By Tryfonas Christou; Francesca Crucitti; Abian Garcia Rodriguez; Nicholas Lazarou; Simone Salotti
  3. The Macroeconomic Effects of Portfolio Equity Inflows By Nick Sander
  4. Be my guest: the effect of foreign policy visits to the USA on FDI By Adam, Antonis; Tsarsitalidou, Sofia

  1. By: GRASSANO Nicola (European Commission - JRC); HERNANDEZ GUEVARA Hector (European Commission - JRC); FAKO Peter (European Commission - JRC); NINDL Elisabeth (European Commission - JRC); GEORGAKAKI Aliki (European Commission - JRC); INCE Ela (European Commission - JRC); NAPOLITANO Lorenzo (European Commission - JRC); RENTOCCHINI Francesco (European Commission - JRC); TUEBKE Alexander (European Commission - JRC)
    Abstract: The main objective of the EU Industrial R&D Investment Scoreboard (the Scoreboard) is to benchmark the performance of EU innovation-driven industries against major global counterparts and to provide an R&D investment database that companies, investors and policymakers can use to compare individual company performances against the best global competitors in their sectors. The 2022 edition of the Scoreboard analyses the 2500 companies that invested the largest sums in R&D worldwide in 2021. These companies, with headquarters in 41 countries, and more than 900k subsidiaries all over the world, each invested over EUR 48.5 million in R&D in 2021. The total investment across all 2500 companies was EUR 1093.9 billion - an amount equivalent to 86% of the world’s business-funded R&D and passing the trillion Euro mark for the first time. The results of this report reveal challenges and opportunities for the EU as it seeks to improve its technology capabilities and reinvigorate its industrial base in the context of increasing global competition pressure and ongoing green and digital transformations.
    Keywords: industrial R&D
    Date: 2023–05
  2. By: Tryfonas Christou (European Commission - JRC); Francesca Crucitti (European Commission - JRC); Abian Garcia Rodriguez (European Commission - JRC); Nicholas Lazarou (European Commission - JRC); Simone Salotti (European Commission - JRC)
    Abstract: The European cohesion policy aims to strengthen economic, social and territorial cohesion, and to correct imbalances between countries and regions. The existing evidence on the impact of the policy on the regions of the European Union (EU) suggests that it is capable of positively influencing cohesion, triggering convergence at the country level. Little is known about the effects of the policy on within-country regional inequality, which is an important dimension of economic disparities. The results summarised here focus on the impact of cohesion policy investments on regional disparities within countries targeted by the policy. The investments can target either peripheral regions or core regions within each country. The economic impacts in the two types of regions differ substantially in terms of magnitude and spillovers generated. Investing in core regions may maximise country-wide returns, but it could be harmful to within-country regional disparities.
    Keywords: rhomolo, general equilibrium, economic growth, cohesion policy
    JEL: C68 R13
    Date: 2023–04
  3. By: Nick Sander
    Abstract: I provide evidence that portfolio equity inflows can have expansionary effects on GDP and inflation if not offset by monetary policy. I use a shift-share instrument to estimate equity inflows based on plausibly exogenous timing of inflows into mutual funds with heterogeneous country portfolios. For countries with fixed exchange rates, GDP rises for at least two years following an exogenous inflow with a peak effect of 0.8 percent after 18 months. This is driven by rises in investment and exports, where the latter response is inconsistent with standard expenditure switching channel mechanisms. Non-fixing countries maintain GDP roughly at the same pre-shock levels but achieve this with higher interest rates.
    Keywords: Business fluctuations and cycles; International financial markets; International topics; Monetary policy
    JEL: E32 F32 F44
    Date: 2023–06
  4. By: Adam, Antonis; Tsarsitalidou, Sofia
    Abstract: We examine whether a country leader’s diplomatic visit to the USA affects the Foreign Direct Investment inflow. The literature so far has found inconclusive results regarding diplomatic relations' effect on international flows. We use a dynamic Inverse Probability Weighting Regression Adjustment framework to examine this relationship and estimate the causal effect of foreign visits. Our results indicate that a visit to the US increases the country’s total FDI inflows by up to one percentage point per annum, with a cumulative effect reaching 2.5 percentage points six years after the visit. However, this is a short-run effect as it disappears in the subsequent years. Furthermore, our first-stage results shed light on the profile of the leaders that visit the US. Our findings are consistent with the view that foreign visits act as signals to investors regarding the country’s political risk.
    Keywords: FDI; foreign visits; inverse probability weighting
    JEL: F21 H80
    Date: 2023–05–21

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