الزراعة والتنمية الريفية والغابات

International trade, investment and tax policies are inextricably linked. Tax is a key investment determinant influencing the attractiveness of a location or an economy for international investors, particularly those heavily engaged in international trade. Taxation, tax relief and other fiscal incentives are key policy tools to increase exports and attract investors. Investors, once established, add to economic activity and the tax base of host economies, and make direct and indirect fiscal contributions. And international investors and MNEs, by the nature of their international operations and intra-firm trade, have opportunities for tax arbitrage between jurisdictions and for tax avoidance.

This article examines the theoretical and empirical links between a new generation of industrial policy, which is rapidly emerging as a dominant paradigm in development economics, and foreign direct investment (FDI). It finds that thus far, the theoretical role of FDI in “new” industrial policy has been vague, despite openness to FDI being one of the characteristics which sets it apart from an “old” generation of industrial policy, which advocated protectionism. Based on primary and secondary research, the article argues that a set of interventions into the economies of low- and lower-middle-income countries combined with an in-depth understanding of the complex interactions involved in TNC subsidiary upgrading, the internationalization processes within TNCs, and TNC strategies and objectives on the part of policymakers, offers such countries the opportunity to maximize the benefits of FDI and move further up in global value chains.

This study draws on preliminary case evidence to explore the motivations and advisability of engagement by African multinational enterprises (MNEs) in outward foreign direct investment (FDI) activities outside their home region. It complements recent research on MNEs from emerging markets, focused on the BRICS (Brazil, the Russian Federation, India, China, and South Africa) economies, with virtually no attention to potentially important players from rising Africa. The MNEs explored in this study are active in the energy, manufacturing, construction, chemicals, agribusiness, extractive/mining, and financial services sectors, and they have investment footprints both in countries in the North and the South. Their investment decisions are motivated by the search for market opportunities, strategic assets/resources and performance-boosting relationships, though more advanced economies appear to attract more strategic asset-seeking FDI from African MNEs. The paper argues that intra-regional investments by African MNEs should continue to be prioritized, but selective and strategic extra-regional FDI, undertaken with an eye on furthering global competitiveness, also requires appropriate policy support. This seems even more sensible given that the acceleration of borderless digital internationalization and the increasingly blurred nationality of MNE affiliates are lessening the relevance of regional distinctions.

This study applies both the internationalization and regulatory focus theories to understand what motivates SMEs to implement springboard strategies – i.e. to invest in a country to re-export to third countries. While some academics emphasize the importance of free trade agreements and cost differentials, others highlight the role played by the individual and network dimensions. We conducted 66 in-depth interviews and five days of non-participant observations with five French manufacturing SMEs and ten investment promotion agencies. Our analysis revealed the existence of firm, network and country-related motivations – springboard strategies being mainly firm-driven – as well as common, partially-shared and specific motivations. Public policy to promote and/or attract springboard-oriented foreign direct investment (FDI) should look at developing dedicated support and educational programmes for SMEs, offering better access to promising markets by removing barriers and enforcing transparency and trade agreements.