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Economic & EU Policies 01: Trade and investment policies in the EU
Time:
Monday, 02/Sept/2024:
2:00pm - 3:30pm
Presentations
Uncovering Domestic Determinants of Investment Screening Mechanisms Across the EU Member States
Elif Cemre Besgur
University of Trento, Italy
The positive perception of hosting Foreign Direct Investment (FDI) has been challenged by China’s increasing influence on European strategic assets and the lessons learned from the COVID-19 experience. In response to potential threats to national security, almost all European Union (EU) member states have taken steps to either strengthen existing Investment Screening Mechanisms (ISMs) or implement new ones. In this context, the research aims to provide a theoretical understanding of how member states make decisions regarding two fundamental dimensions of their ISMs: scope (broad/narrow) and threshold (high/low) drawn from the Politics and Regulation of Investment Screening Mechanisms (PRISM) dataset. Arising from these two dimensions, the research presents four different configurations of ISM that lead to varying degrees of autonomy. It introduces an analytical framework grounded in member states’ technological intensity and ownership structure. The central argument is that the technological intensity of member states and the type of ownership network embedded in their state-society relations are the two key variables that explain the variations in different investment screening models across EU member states. By scrutinising four different types closely and comparatively, this research highlights domestic political economy sources of variations in the design of ISM across the EU member states.
What Single Market? Comparing its Incompleteness for Trade in Goods and Services through Spirits Drinks and Construction
Andy Smith1, Craig Parsons2
1Sciences Po Bordeaux, France; 2University of Oregon, United States
More than 30 years on from the much-proclaimed ‘completion of the Single Market’, research centred upon specific sectors reveals that trade across borders within the EU is still far from barrier-free. What do company managers, trade association officals and national government representatives think about this state of affairs. What, if anything, are they endeavouring to do about it and why? More fundamentally, what does the incompleteness of the EU’s internal market reveal about the political economy of the EU and, moreover, its potential linkages to the legitimation of European integration more generally? This paper will present answers to these questions based upon robust data generated by an ambitious project (SingleMarkets) which also includes the US equivalent. In Europe, through both interviews and a public opinion survey, to date this project has examined in depth the practice and regulation of trade in goods (via the case of spirits drinks) and services (through the case of cross-border construction work), and this at both national (France, Germany, Poland, Norway) and EU scales. Results from both sectors will be systematically compared in order to parse out explanatory variables which, we hypothesize, are transferable to analysis of the Single Market as a whole.
The Impact of Sanctions on Hungarian Business in Russia
Csaba Weiner
Institute of World Economics, HUN-REN Centre for Economic and Regional Studies, Hungary
The academic literature lacks a detailed long-term analysis of Central and East European (CEE) exports of goods to and foreign direct investment (FDI) in Russia and a firm-level empirical investigation of these activities. Western sanctions and Russian countermeasures, especially those from 2022 onwards, have made this gap even more apparent. Although the Russian market constituted a small part of CEE exports of goods and outward FDI activity even in the pre-sanctions period, it has continued to be important for selected CEE export products and investor firms, which have been challenged by hurdles caused by these sanction regimes. In this paper, we assess how sanctions have affected Hungarian exports of goods to and investment presence in Russia and the performance of Hungarian firms involved in these transactions. In an effort to diversify its exports and reduce its dependence on EU markets, Hungary launched its Eastern Opening foreign policy just two years before the 2014 sanctions. It has also built a cordial political relationship with Russia. Although Hungary has voted in favour of sanctions against Russia, the Hungarian government has consistently expressed its opposition to these measures on the grounds of their negative effects on Hungarian economic performance. In this paper, in addition to providing information on exports of goods and FDI at the level of aggregated data, we identify the specific areas where sanctions have impacted Hungarian firms and look at the types of difficulties and opportunities they have faced. We also determine how individual Hungarian firms have responded to the new situation, and which firm-specific factors (i.e., the characteristics of the firms and their products and activities) influence firm performance and adaptation strategies. We use a mixed-methods approach, relying on both qualitative and quantitative methods, and integrating the insights of the institutional theory with the resource-based view and the resource-dependence theory in pursuit of interpreting sanctions and assessing the response strategies of firms to a new political and economic environment. Our data derive from aggregate and firm-level national statistics, corporate registers/databases, other sources of documentary research and our own questionnaires and interviews.
