Investment Screening Mechanisms: The Trend to Control Inward Foreign Investment
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Date
2021-12
Publication Type
Report
ETH Bibliography
yes
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Abstract
In an increasing number of sectors, concerns are rising that foreign firm participation may pose risks to public order. Many developed countries have adopted or extended their investment screening mechanisms to control inward foreign direct investment in strategically important sectors over the last years. This paper documents the development of investment screening in OECD and EU countries and provides the first discussion from an economic perspective. We review existing and propose new explanations for the adoption of investment screening. Our exploratory quantitative analysis suggests that countries with higher levels of technological development and with a stricter regulatory environment for foreign investment are more likely to introduce investment screening. Contrary to the popular wisdom, we do not find evidence that higher Chinese inward investments are associated with the implementation of investment screening.
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Publication status
published
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Journal / series
Volume
34
Pages / Article No.
Publisher
EconPol Europe
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Date created
Subject
foreign direct investments; national security; investment screening mechanisms
Organisational unit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
03716 - Sturm, Jan-Egbert / Sturm, Jan-Egbert