Культурные и религиозные детерминанты прямых иностранных инвестиций
Аннотация
Over the past decade, the international economic literature has increasingly focused on identifying the cultural and religious factors that determine foreign direct investment. Although the impact of culture on business practice has been extensively studied, less research has been published on the impact of culture on international trade and investment. In addition, culture is often narrowly defined in terms of implicit attitudes, with little attention paid to the influence of explicit cultural characteristics, such as religion, or sociological factors, such as urbanization and educational level, that can have a decisive influence on abilities of countries and regions to attract FDI.
Foreign direct investment is a priori associated with interactions between different countries and, therefore, different cultures. The distance between cultures can directly affect the time, money spent setting up, and developing a business overseas, and can play a critical role in the success of an investment. The cultural factor is frequently mentioned in the literature, but there are not many studies that directly emphasize the impact of cultural variables on FDI flows, and these variables do not seem to reflect the full impact of culture.
The current competitive business environment encourages companies to cross national borders to explore and invest in foreign markets. Deciding which country to invest in is not easy. There are many factors that can influence this decision, and culture is one of the factors that international scholars have included in their research. Foreign direct investment (FDI) is a key element in understanding globalization. Countries most receptive to this type of investment have a better chance of economic development, so much so that receiving foreign direct investment is one indicator of this type of analysis. Therefore, it is necessary to understand what will affect the emergence of FDI. Based on the theses described earlier, it is safe to conclude that the topic is very relevant, because the problem of the influence of foreign direct investment has not been fully studied, and this study will help clarify the role of culture and institutional factors on foreign direct investment.
The purpose of this study to examine the possible cultural factors affecting FDI in terms of the varying religious, social and cultures backgrounds of the different states.
To achieve this goal, it is necessary to solve the following tasks:
to analyze scientific papers and material on the subject of this work;
to identify the most appropriate methods for studying the determinants in the context of the gravity model and to construct research hypotheses.
to evaluate the econometric model to identify culture and language factors affecting FDI;
to check the developed econometric model;
to evaluate the results and give recommendations.
Research object is Countries with foreign direct investment, subject - Factors influencing cross-country FDI flows. The idea of that is religion & culture may be thought of as a comprehensive system of moral values and behavioral standards that emerges in order to cooperation at the community level and may affect international trade relations (in particular FDI).
To test the impact of religious and cultural determinants on FDI, I rely on gravity econometric framework and examine the impact of cultural and religious factors on FDI using bilateral FDI flows between home (i.e. major trading partners). To test the impact of the hypothesized determinants of FDI as outlined earlier, methodology includes models with the OLS estimator using the log of some variables, and later to solve zero FDI issues and the problem — of heteroscedasticity, I re-estimated the specification with random effects by the preferred — PPML estimator.
The information and empirical base of the research includes the study of scientific and theoretical literature, the analysis of more than 25 articles with a relevant research topic, as well as econometric practical analysis of the sample which covers 100 countries for the period 2010-2016, including both developed and developing countries from around the world from IMF, CEPII, OECD.
The practical significance of the work lies in the fact that its results make it possible to understand the essence and characteristics of the main cultural and religious determinants of foreign direct investment more fully and comprehensively, to give a theoretical and economic assessment of this influence in practice. The analysis carried out in the diploma, the conclusions and generalizations obtained can be used for further scientific research. The work also makes up to a certain extent for the lack in domestic science of a comprehensive independent analysis of the influence of culture and religion on FDI from the moment of studying this issue to the present and can contribute to the conduct of new research and the preparation of new publications in the field of economic literature. The results obtained make it possible to use the recommendations proposed by the author to achieve stability in the functioning of political instruments and increase the level of bilateral FDI flows between partner countries.
The results indicate that religious and cultural distance is important for FDI. Foreign investors seem to be promoted to countries with a similar or better regulatory environment than at home, while they prefer to invest in countries with less diverse societies than their own.
Regarding with linguistic similarities between trading countries, it should be noted that it is this variable that is practically unchanged in almost all cases and has the same effect on FDI in different studies. As in our work, the similarity of the languages of trading countries absolutely always has a positive effect on international trade. It is much easier for countries to reach common agreements when their representatives and residents of these countries speak the same or the same language.
But the situation with cultural distance is ambiguous. As a result of the three models, with an increase in the degree of difference between the culture of the trading countries, FDI, which is also confirmed by some of the studies studied, and most importantly, is confirmed by the initially set hypothesis. I trust the results of the latter model as it is completely consistent and combats heteroscedasticity.
Moving on to the religious variable. The influence of the index of religious similarity in all models had a positive effect on international trade. The result of the analysis turned out to be complete and reliable, since we used both the index of religious similarity and several variables reflecting each religion. The result for religious similarities across specific religions is controversial. It is necessary to understand this topic in more detail in the following studies, to try to collect a more detailed database on these variables.
Speaking about Christianity and Islam religious, which were considered from my research because of more in terms of scientific interest, it is important to note that the results obtained prove us an impact on FDI, but each religion influences differently due to the inherent nature of the religions themselves. Previous literature on the impact of religions on growth has attempted to “rank” religions, or at least highlight characteristics of some faiths that might make them more conducive to economic growth than others. It can be concluded that, on average, Christian religions are more positively associated with attitudes conducive to economic growth, while Islam is negatively associated.
As a result, our assumptions turned out to be practically correct. FDI's relationship with religion and culture should be the subject of close scrutiny by traders. For example, before starting any business relationship, participants should have a more detailed understanding of not only the partner's language, but also religious preferences and cultural traditions. Future research should place even more emphasis on data collection in order to build a fully reliable database and explore this relationship in more detail.
The interest in this work is high. Determinants of culture and religions of FDI will always be studied because of globalization and gigantic pace of development, the world is constantly changing culturally and sometimes even religiously. This constant change affects absolutely all areas, such as social, economic, technological, environmental, and so on.
Foreign direct investment is a priori associated with interactions between different countries and, therefore, different cultures. The distance between cultures can directly affect the time, money spent setting up, and developing a business overseas, and can play a critical role in the success of an investment. The cultural factor is frequently mentioned in the literature, but there are not many studies that directly emphasize the impact of cultural variables on FDI flows, and these variables do not seem to reflect the full impact of culture.
The current competitive business environment encourages companies to cross national borders to explore and invest in foreign markets. Deciding which country to invest in is not easy. There are many factors that can influence this decision, and culture is one of the factors that international scholars have included in their research. Foreign direct investment (FDI) is a key element in understanding globalization. Countries most receptive to this type of investment have a better chance of economic development, so much so that receiving foreign direct investment is one indicator of this type of analysis. Therefore, it is necessary to understand what will affect the emergence of FDI. Based on the theses described earlier, it is safe to conclude that the topic is very relevant, because the problem of the influence of foreign direct investment has not been fully studied, and this study will help clarify the role of culture and institutional factors on foreign direct investment.
The purpose of this study to examine the possible cultural factors affecting FDI in terms of the varying religious, social and cultures backgrounds of the different states.
To achieve this goal, it is necessary to solve the following tasks:
to analyze scientific papers and material on the subject of this work;
to identify the most appropriate methods for studying the determinants in the context of the gravity model and to construct research hypotheses.
to evaluate the econometric model to identify culture and language factors affecting FDI;
to check the developed econometric model;
to evaluate the results and give recommendations.
Research object is Countries with foreign direct investment, subject - Factors influencing cross-country FDI flows. The idea of that is religion & culture may be thought of as a comprehensive system of moral values and behavioral standards that emerges in order to cooperation at the community level and may affect international trade relations (in particular FDI).
To test the impact of religious and cultural determinants on FDI, I rely on gravity econometric framework and examine the impact of cultural and religious factors on FDI using bilateral FDI flows between home (i.e. major trading partners). To test the impact of the hypothesized determinants of FDI as outlined earlier, methodology includes models with the OLS estimator using the log of some variables, and later to solve zero FDI issues and the problem — of heteroscedasticity, I re-estimated the specification with random effects by the preferred — PPML estimator.
The information and empirical base of the research includes the study of scientific and theoretical literature, the analysis of more than 25 articles with a relevant research topic, as well as econometric practical analysis of the sample which covers 100 countries for the period 2010-2016, including both developed and developing countries from around the world from IMF, CEPII, OECD.
The practical significance of the work lies in the fact that its results make it possible to understand the essence and characteristics of the main cultural and religious determinants of foreign direct investment more fully and comprehensively, to give a theoretical and economic assessment of this influence in practice. The analysis carried out in the diploma, the conclusions and generalizations obtained can be used for further scientific research. The work also makes up to a certain extent for the lack in domestic science of a comprehensive independent analysis of the influence of culture and religion on FDI from the moment of studying this issue to the present and can contribute to the conduct of new research and the preparation of new publications in the field of economic literature. The results obtained make it possible to use the recommendations proposed by the author to achieve stability in the functioning of political instruments and increase the level of bilateral FDI flows between partner countries.
The results indicate that religious and cultural distance is important for FDI. Foreign investors seem to be promoted to countries with a similar or better regulatory environment than at home, while they prefer to invest in countries with less diverse societies than their own.
Regarding with linguistic similarities between trading countries, it should be noted that it is this variable that is practically unchanged in almost all cases and has the same effect on FDI in different studies. As in our work, the similarity of the languages of trading countries absolutely always has a positive effect on international trade. It is much easier for countries to reach common agreements when their representatives and residents of these countries speak the same or the same language.
But the situation with cultural distance is ambiguous. As a result of the three models, with an increase in the degree of difference between the culture of the trading countries, FDI, which is also confirmed by some of the studies studied, and most importantly, is confirmed by the initially set hypothesis. I trust the results of the latter model as it is completely consistent and combats heteroscedasticity.
Moving on to the religious variable. The influence of the index of religious similarity in all models had a positive effect on international trade. The result of the analysis turned out to be complete and reliable, since we used both the index of religious similarity and several variables reflecting each religion. The result for religious similarities across specific religions is controversial. It is necessary to understand this topic in more detail in the following studies, to try to collect a more detailed database on these variables.
Speaking about Christianity and Islam religious, which were considered from my research because of more in terms of scientific interest, it is important to note that the results obtained prove us an impact on FDI, but each religion influences differently due to the inherent nature of the religions themselves. Previous literature on the impact of religions on growth has attempted to “rank” religions, or at least highlight characteristics of some faiths that might make them more conducive to economic growth than others. It can be concluded that, on average, Christian religions are more positively associated with attitudes conducive to economic growth, while Islam is negatively associated.
As a result, our assumptions turned out to be practically correct. FDI's relationship with religion and culture should be the subject of close scrutiny by traders. For example, before starting any business relationship, participants should have a more detailed understanding of not only the partner's language, but also religious preferences and cultural traditions. Future research should place even more emphasis on data collection in order to build a fully reliable database and explore this relationship in more detail.
The interest in this work is high. Determinants of culture and religions of FDI will always be studied because of globalization and gigantic pace of development, the world is constantly changing culturally and sometimes even religiously. This constant change affects absolutely all areas, such as social, economic, technological, environmental, and so on.