Related items
Showing items related by title, author, creator and subject.
-
Investment Law ReformThe chief purpose of this handbook is to
 provide government lawyers with a framework to evaluate the
 quality of a country's investment legislation (if it
 exists) and how the legislation relates to its investment
 policy and investment incentives. More specifically, it
 deals with creating new and reforming existing investment
 legislation in developing and transition economies in
 furtherance of the World Bank Group's (WBG's)
 mandate to promote private investment - domestic and foreign
 - in those economies. Handbook appendices contain drafting
 guidelines and checklist of issues that foreign direct
 investment (FDI) laws should include and that countries can
 use when drafting investment legislation. The report is
 structured as follows: chapter one defines key terms about
 investment law reform in an effort to clarify terminology
 and concepts and show how they are related. Chapter two
 examines how widespread investment codes are and explains
 their utility and limitations. Chapter three provides
 recommendations on the structure of investment legislation
 and the key provisions to be included such as definitions,
 investors' guarantees, incentives, framework for
 investment promotion, and transitional provisions. Chapter
 four discusses the fundamental issue of investor entry, in
 particular the conditions under which foreign investors can
 invest including sectoral restrictions, limitations on
 foreign ownership, authorization and screening, minimum
 investment, and performance requirements. Chapter five
 discusses key investor guarantees including fair and
 equitable treatment, national treatment, most-favored-nation
 (MFN) treatment, protection against expropriation,
 guaranteed convertibility and repatriation of profits, and
 settlement of disputes. Chapter six looks at the issue of
 investment incentives, (fiscal incentives in particular) and
 their effectiveness. Chapter seven summarizes key aspects of
 investment promotion to guide legal drafters, should
 policymakers want the investment code to set out the basic
 framework of investment promotion. Chapter eight presents
 the various phases of investment law reform projects, from
 the government's request for assistance with
 legislation to the delivery of a project plan. Chapter nine
 identifies some of the challenges in preparing an investment
 code and the support that governments may need until the law
 is promulgated. Chapter ten discusses the monitoring and
 evaluation (M and E) of investment law reforms, including
 the key indicators involved in a desk review and medium- and
 large-scale projects.
-
Government Connections and Financial Constraints : Evidence from a Large Representative Sample of Chinese FirmsThis paper examines the role of firms' government connections, defined by government intervention in the appointments of Chief Executive Officers and the status of state ownership, in determining the severity of financial constraints faced by Chinese firms. In line with the previous literature, the paper demonstrates that investment by non-state firms is highly sensitive to internal cash flows, while no such sensitivity is found for government-owned enterprises. Even within the subset of non-state firms, government connections are associated with substantially less severe financial constraints (less reliance on internal cash flows to fund investment). The paper also finds that large non-state firms with weak government connections are especially financially constrained, due perhaps to the formidable hold that their state rivals have on financial resources after the "grabbing-the-big-and-letting-go-the-small" privatization program in China. Firms with government-appointed Chief Executive Officers also have significantly lower investment intensities, due perhaps to their lower-powered incentives. The empirical results suggest that government connections play an important role in explaining Chinese firms' investment behavior and financing conditions, and provide further evidence on the nature of the misallocation of credit by China's dominant state-owned banks.
-
Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector?This paper seeks to assess the extent to which a country's overall level of development and that of its financial sector, in particular, are factors that attract private capital into infrastructure projects. The authors investigate these effects in a 1990-2007 dataset on the power sector in 37 developing countries. The results suggest that economic growth is a key determinant of private investors' investment in infrastructure projects, and that investors tend to take countries governance quality into account in their decisions to invest. The empirical results highlight that the development of the financial sector also plays a significant role in private investors' decisions to enter infrastructure sectors. In particular, the degree of country risk and exchange rate volatility is found to be negatively related to the volume of private sector investment in power projects. Furthermore, when the banking sector and the capital market are separately treated in the analysis, the existence of a well functioning capital market is the main attracting factor. In addition, the existence of an independent energy regulatory authority significantly improves the level of private investors' implication in energy projects. When accounting for the interactions between the overall economic development and the financial sector development variables, the effects of these variables are still significant and the results also confirm the importance of an independent energy sector regulator.