An Assessment of the Level of Sustainability of Foreign Direct Investments (FDI) of German Companies in Latvia

• Autorzy: Günter Hofbauer , Andrejs Limanskis
• Języki publikacji: EN

Abstrakty

EN

The purpose of this paper is to find out the drivers of and barriers to Foreign Direct Investments (FDI) within the scope of sustainability considerations in order to add new knowledge to the scientific discussion. The sustainability of FDI deserves attention due to the importance of cross-border flows of capital in major fields of the economy and politics. The level of sustainability awareness of investors, however, is not known. Pioneering field research was conducted among 160 German companies in Latvia. Methodologically, a literature review, FDI statistics, primary data from an Internet-based questionnaire, the statistical evaluation of responses with SPSS, and an analysis of correlations measured by Cramér's V, based on Pearson's chi-squared statistic, were used. A gap in the scientific literature pertaining to sustainability drivers and outcomes in relation to FDI was addressed. The empirical part disclosed the level of mainstream implementation of sustainability in the operations of German investors in Latvia. The understanding of the sustainability awareness of investors can be used at the level of political decision making in Latvia and other countries in order to promote the sustainability of incoming FDI. A remarkable level of measurable awareness of sustainability issues among German entrepreneurs in Latvia was found. However, there is still room for improvement and further research. (original abstract)

Słowa kluczowe

PL

Inwestycje bezpośrednie; Inwestycje zagraniczne; Rozwój zrównoważony; Inwestycje przedsiębiorstw

EN

Direct investments; Foreign investment; Sustainable development; Enterprises investments

• Czasopismo: Forum Scientiae Oeconomia
• Rocznik: 2022
• Tom: 10
• Numer: nr 1
• Strony: 97-116

Twórcy

autor

Günter Hofbauer

• Technical University Ingolstadt, Germany

autor

Andrejs Limanskis

• RISEBA University of Business, Arts and Technology, Riga, Latvia

Bibliografia

• Alshubiri, F.N. (2021), Analysis of financial sustain-ability indicators of higher education institutions on foreign direct investment: Empirical evidence in OECD countries. International Journal of Sustainability in Higher Education, 22(1), 77-99. https://doi.org/10.1108/IJSHE-10-2019-0306.
• Backhaus, K., Erichson, B., Plinke, W., Weiber, R. (2018), Multivariate Analysemethoden: Eine anwendungsorientierte Einführung (15th edition), Berlin: Springer Gabler. (Original work published in German).
• Baltrušaitytė-Axelson, J., Sauka, A., Welter, F. (2008), Nascent Entrepreneurship in Latvia, Evidence from the Panel Study of Entrepreneurial Dynamics, Riga: Stockholm School of Economics.
• Bilas, V. (2020), FDI and Economic Growth in EU13 Countries: Cointegration and Causality Tests, Journal of Competitiveness, 12(3), 47-63. https://doi.org/10.7441/joc.2020.03.03.
• Brenton, P., Di Mauro, F., Lücke, M. (1999), Economic Integration and FDI: An empirical analysis of foreign Investment in the EU and in Central and Eastern Europe, Empirica, 26, 95-121.
• Burlea-Schiopoiu, A., Brostescu, S., Popescu, L. (2021), The impact of foreign direct investment on the economic development of emerging countries of the European Union. International Journal of Finance and Economics. https://doi.org/10.1002/ijfe.2530.
• CEIC Data (2021), Latvia Foreign Direct Investment, retrieved from: https://www.ceic-data.com/en/indicator/latvia/foreign-direct-in-vestment (accessed 28 July 2021).
• Chipalkatti, N., Le, Q.V., Rishi, M. (2021), Sustainability and Society: Do Environmental, Social, and Governance Factors Matter for Foreign Direct Investment? Energies, 14, 6039. https://doi.org/10.3390/en14196039.
• Christoforidis, T., Katrakilidis, C. (2021), Does Foreign Direct Investment Matter for Environmental Degradation? Empirical Evidence from Central-Eastern European Countries, Journal of Knowledge Economy. https://doi.org/10.1007/s13132-021-00820-y.
• Cole, M.A., Elliott, R.J.R., Zhang, L. (2017), Foreign Direct Investment and the Environment, Annual Review of Environment and Resources, 42, 465-487. https://doi.org/10.1146/annurev-enviro-102016-060916.
• Densia, V. (2010), Foreign Direct Investment Theories: An Overview of the Main FDI Theories, European Journal of Interdisciplinary Studies, 2, 104-110.
• Dunning, J.H. (2001), The Eclectic (OLI) Paradigm of International Production: Past, Present and Future, International Journal of the Economics of Business, 8(2), 173-190. https://doi.org/10.1080/13571510110051441.
• Dunning, J.H. (1994), Transnational Corporations, UNCTAD/ITE/IIT, 3(1), retrieved from: https://unctad.org/webflyer/transnational-corporations-vol3-no1 (assessed 15 December 2021).
• Duuren, E., Plantinga, A., Scholtens, B. (2016), ESG Integration and the Investment Process: Fundamental Investing Reinvented, Journal of Business Ethics, 138(3), 525-533. https://doi.org/10.1007/s10551-015-2610-8.
• European Commission (2021), EU holistic approach to sustainable development, retrieved from: https://ec.europa.eu/info/strategy/internation-al-strategies/sustainable-development-goals/eu-holistic-approach-sustainable-development_en (accessed 20 August 2021).
• Eurostat (2021), Sustainable Development Goals, retrieved from: https://knowledge4policy.ec.europa.eu/online-resource/eurostat-sustainable-development-goals_en (accessed 10 April 2021).
• ESCAP (2019), Foreign direct investment and sus-tainable development in international invest-ment governance. Bangkok: United Nations Publication, retrieved from: https://www.unes-cap.org/sites/default/d8files/knowledge-prod-ucts/STII No.90 version 4-final.pdf (accessed 16 April 2021).
• Fiscal Discipline Council Monitoring Report 14 (2021), Latvian FDP monitornga ziņojums 14, retrieved from: https://www.fdp.gov.lv/lv/me-dia/3182/download (accessed 20 August 2021). (Original work published in Latvian)
• Gallagher E., Bancilhon C., Berruti G. (2021), What you should know about the EU Taxonomy, retrieved from: https://www.greenbiz.com/article/what-you-should-know-about-eu-taxono-my (accessed 24 August 2021).
• Gavoille, N., Zasova, A. (2021), Foreign ownership and labor tax evasion: Evidence from Latvia, Economics Letters, 207, 110030. https://doi.org/10.1016/j.econlet.2021.110030.
• He, J. (2006), Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces, Ecological Economics (2006), 229-245. https://doi.org/10.1016/j.ecolecon.2005.12.008.
• Irandoust, M. (2016), Structural changes, FDI, and economic growth: Evidence from the Baltic states, Journal of Economic Structures 5, 1-9. https://doi.org/10.1186/s40008-016-0045-8.
• Islam, M.A., Khan, M.A., Popp, J., Sroka, W., Oláh, J. (2020), Financial Development and Foreign Direct Investment-The Moderating Role of Quality Institutions. Sustainability 2020, 12, 3556. https://doi.org/10.3390/su12093556.
• Jansson, M., Biel, A. (2001), Motives to Engage in Sustainable Investment: A Comparison Between Institutional and Private Investors, Sustainable Development, 19, 135-142. https://doi.org/10.1002/sd.512.
• Kang X., Khan F.U., Ullah R., Arif M., Rehman S.U., Ullah F. (2021), Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries, Energies, 14(12), 3470. https://doi.org/10.3390/en14123470.
• Kardos, M. (2014), The relevance of Foreign Direct Investment for sustainable develop-ment. Empirical evidence from European Union, Procedia Economics and Finance, 15, 1349-1354. https://doi.org/10.1016/S2212-5671(14)00598-X.
• Kemplay, M. (2021) The developing art of measuring ESG performance, retrieved from: https://www.esg-specialist.com/the-developing-art-of-measuring-esg-performance/?xnpe_tifc=OFzXbfhNxFh.4DxlxFndxypsafeWaei-WhFWLauQZhfWDtupWafecVdAWVlB-ZRM4sbuYcayhSbIeLhkU_4FQNxkb8hfH-j41TT&utm_source=bloomreach&utm_cam-paign=Sustainable Views beta newsletter 18 Nov 2021&utm_me-dium=email (accessed 28 December 2021).
• Kostoska, O., Kocarev, L. (2019), A Novel ICT Framework for Sustainable Development Goals, Sustainability, 11(7), 1961. https://doi.org/10.3390/su11071961.
• Kurtović, S., Maxhuni, N., Halili, B., Krasniqi, B. (2021), Does outward foreign direct invest-ment crowd in or crowd out domestic invest-ment in Central, East and Southeast Europe countries? an asymmetric approach, Economic Change and Restructuring 2021. https://doi.org/10.1007/s10644-021-09352-6
• Latvijas Gaze (2021), Steps of Latvijas Gāze to support the European Green Deal, retrieved from: https://lg.lv/en/investors/financial-informa-tion/presentations/steps-of-latvijas-gaze-to-support-the-european-green-deal (accessed 15 July 2021).
• Latvijas Piens (2021), SIA Latvijas piens uses only renewable energy resources, retrieved from: http://www.lvpiens.lv/en/about-us/news/63-sia-latvijas-piens-uses-only-renewable-en-ergy-resources (accessed 1 June 2021).
• Lei M., Zhao, X., Deng, H., Tan, K.C. (2013), DEA analysis of FDI attractiveness for sustainable de-velopment: Evidence from Chinese provinces, Decision Support Systems, 56, 406-418. https://doi.org/10.1016/j.dss.2012.10.053.
• Lemss I., Libkovska U. (2021), The methodology for the creation of an adapted model for the transition to the circular economy for the small and medium enterprises of Latvia in a long term perspective. Vide. Tehnologija. Resursi - Environment, Technology, Resources, 1, 145 - 148, 13th International Scientific and Practical Conference on Environment, Technology, Resources, ETR 2021, Rezekne DOI:10.17770/etr2021vol1.6518
• LIDL Latvija (2021), Understanding of sustainability, retrieved from: https://corporate.lidl.lv/lv/korporativa-atbildiba (accessed 11 August 2021).
• Lursoft Statistika (2021), Retrieved from: https://statistika.lursoft.lv/lv/statistika/arvalstu-ieguld-ijumi/pa-valstim/ (accessed 21 May 2021).
• Magnetic Latvia (2021), Foreign direct investment, retrieved from: https://investinlatvia.org/en/why-latvia/foreign-direct-investment (accessed 21 May 2021).
• Melane-Lavado, A., Alvarez-Herranzines, A., Gon-zalez, G. (2017), Foreign direct investment as a way to guide the innovative process towards sustainability, retrieved from: https://www.sciencedirect.com/science/article/abs/pii/S0959652617305760 (assessed 15 December 2021).
• Narula, K. (2012), 'Sustainable Investing' via the FDI Route for Sustainable Development, Procedia - Social and Behavioral Sciences, 37, 15-30 https://doi.org/10.1016/j.sbspro.2012.03.271.
• Renneboog, L., Ter Horst, J., Zhang, C. (2008), Socially responsible investments: Institutional aspects, performance, and investor behavior. Journal of Banking and Finance, 32: 1723-1742. https://doi.org/10.1016/j.jbankfin.2007.12.037.
• Santander (2021), Latvia: foreign investment, retrieved from: https://santandertrade.com/en/portal/establish-overseas/latvia/investing (ac-cessed 13 April 2021.
• Schwenk Latvia (2021), Sustainable manufacturing, retrieved from: https://schwenk.lv/en/sustain-ability/sustainable-manufacturing/ (accessed 13 April 2021).
• Simanovska, J., Pelsa, I., Kibilda-Kinna, N. (2021), When is Green Really Green? A Latvian Case Study on Updating of Food Supply Green Public Procurement, Environmental and Climate Technologies, 24(3), 513-520. https://doi.org/10.2478/rtuect-2020-0120.
• Singh, N., Kapuria, C. (2021), The effect of sustain-ability on foreign direct investment inflows: evidence from developing countries, Social Responsibility Journal. https://doi.org/10.1108/SRJ-08-2019-0289 (in press)
• Song, W., Mao, H., Han, X. (2021), The two-sided effects of foreign direct investment on carbon emissions performance in China, Science of the Total Environment 791, 148331. https://doi.org/10.1016/j.scitotenv.2021.148331.
• Spaiser, V., Ranganathan, S., Swain, R.B., Sumpter, D.J.T. (2017), The sustainable development oxymoron: quantifying and modelling the in-compatibility of sustainable development goals, International Journal of Sustainable Development and World Ecology, 24 (6), 457-470. https://doi:10.1080/13504509.2016.1235624.
• Titarenko, D. (2005), The Influence of foreign Direct Investment on Domestic Investment Process in Latvia, MPRA Paper No. 18192, Transport and Telecommunication, 7(1), 76-83
• Tvaronavičienė, M., Lankauskienė T. (2011), Plausible foreign direct investment's impact on sustainable development indicators of different-ly developed countries, Journal of Security and Sustainability Issues, 1(1), 27-38. https://doi.org/10.9770/jssi.2011.1.1(3).
• United Nations (2016), The Sustainable Development Goals Report 2016 (New York: United Nations Publications), retrieved from: https://unstats.un.org/sdgs/report/2016 (ac-cessed 28 December 2020).
• Valujeva, K., Debernardini, M., Freed, E.K., Nipers, A., Schulte, R.P.O. (2021), Abandoned farmland: Past failures or future opportuni-ties for Europe's Green Deal? A Baltic case-study, Environmental Science and Policy, 128, 175-184. https://doi.org/10.1016/j.envs-ci.2021.11.014.
• Wei, S.J., Smarzynska, B. (2003), Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth? Contributions in Economic Analysis & Policy, 3(2), 1-34. https://doi.org/10.2202/1538-0645.1244.
• Wilson J. (2014), Essentials of Business Research: A Guide to Doing Your Research Project, Thousand Oaks: SAGE Publications.
• Witkowski, J., Cheba, K., Kiba-Janiak, M. (2017), The macro- and micro-environmental fac-tors of decisions of production facility loca-tion by Japanese companies in Poland, Forum Scientiae Oeconomia, 5(1), 43-56. https://doi.org/10.23762/fso_vol5no1_4
• Zamani, Z., Tayebi, S.K. (2021), Spillover effects of trade and foreign direct investment on eco-nomic growth: An implication for sustainable development, Environment, Development and Sustainability. https://doi.org/10.1007/s10668-021-01597-5.
• Zhang, Q., Naqvi, S.A.A., Shah, S.A.R. (2021), The contribution of outward Foreign Direct Investment, human well-being, and tech-nology toward a sustainable environment, Sustainability 2021, 13, 11430. https://doi.org/10.3390/su132011430.

Identyfikatory

DOI

10.23762/FSO_VOL10_NO1_6