Abstract
Foreign direct investment is a complex phenomenon and the history of international investment law, particularly over the last three decades, ‘reflects economic and political debate and conflict’:1 This explains the attention paid to the subject by scholars from a wide range of disciplines, including law, the social sciences, business and management. These studies have contributed to the understanding not only of the various facets of FDI, but also the evolution of FDI as a phenomenon.
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Notes
T.W. Waelde, ‘The 1994 Energy Charter Treaty’ (1995) 29 (5) Journal of World Trade 5, 11.
C.D. Wallace, Legal Control of the Multinational Enterprise (1982) 6.
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Similarly, Lankes and Venables found that ‘host country transition progress, political stability and perceived risk influence FDI inflows as well as the predominant type of investment’. See H.-P. Lankes and A.J. Venables, ‘Foreign Direct Investment in Economic Transition: the Changing Pattern of Investments’ (1996) 4 (2) Economics of Transition 331.
S.H. Robock, ‘Political Risk: Identification and Assessment’ (1974) 6 (4) Columbia Journal of World Business 6, 6.
Robock states that political risk in international business exists (i) when discontinuities occur in the business environment, (ii) when they are difficult to, anticipate, and (iii) when they result from political change. Most important is that to constitute a ‘risk’ these changes in the business environment must have the potential to significantly affect the profit or other goals of a particular enterprise. See S.H. Robock, ‘Political Risk: Identification and Assessment’, ‘Assessing and Forecasting Political Risk’ (Abstract Paper for the Research Conference on the Multinational Corporation in the Global Political System, Philadelphia, 22–23 April 1971), p. 7. Root notes that a company investing abroad faces a wide spectrum of political risks that are generated by the attitudes, policies, and overt behaviour of host governments and other local power centres such as rival political parties, labour unions and nationalistic groups.
See F. Root, ‘U.S. Business Abroad and the Political Risks’ (1968) MSU Business Topics 73. Greene defines it as uncertainty stemming from unanticipated and unexpected acts of governments or other organizations which may cause loss to the business firm.
See F. Green, ‘The Management of Political Risk’ (1974) Bests Review. Fatehi-Sedeh and Safizadeh suggest that political risk is defined as negative perception emanating from internal instability, intergovernmental relationship or unanticipated government actions, or government discontinuities all brought about by social, economic, or political imperatives existing in a country’s internal or relevant external environment.
See K. Fatehi-Sedeh and M. Safizadeh, ‘The Association Between Political Instability and Flow of Foreign Direct Investment’ (1989) 29 (4) Management International Review 4, 10.
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See T. Rapakko, Unlimited Shareholder Liability in Multinationals (1997) chapter 3.4.1.
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See G.P. O’Driscoll and M.J. Rizzo, The Economics of Time and Ignorance (1985). They note that in economics there are three conceptions of time: static, dynamic and analytical. In the static conception, time is analogous to space. Economic agents can allocate fragments of time to different activities. The passage of time may be represented by ‘movements’ along a line. The future exists just like the points on a line that are given simultaneously. The dynamic conception perceives time as a flow of events, which implies novelty or a ‘continuous flow of novel experiences’. This flow is not in time, as would be the case from a static perspective; rather it is or constitutes time. The concept of analytical time resembles that of historical time insofar as it is characterized by path dependence. It leaves no room for a ‘continuous flow of novel experiences’, however, as it merely distinguishes ‘before’ and ‘after’.
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Fenwick illustrates this point: ‘Many of the most crucial and noticeable problems and trends in the evolution of joint ventures [in China] during their first five years are the outcome of the at-times conflictual interplay between two key roles envisaged for joint ventures: that of component of national development strategy (a role envisaged, by Beijing) and that of profit-making entrée into the China market (a role envisaged by foreign investors).’ See A. Fenwick, ‘Equity Joint Ventures in the People’s Republic of China: An Assessment of the First Five Years’ (1985) 40 Business Lawyer 839.
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P.A. Hall and R.C.R. Taylor, ‘Political Science and the Three Institutionalisms’ (1996) XLIV Political Studies 936;
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© 2002 E.K. Dosmukhamedov
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Dosmukhamedov, E.K. (2002). Methodological Approach. In: Foreign Direct Investment in Kazakhstan. St Antony’s Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230502178_2
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