Call for Papers for Special Issue: FDI [Divestment] inflows and outflows in Developing Economies

Introduction:

The word de-internationalization comes into frequent existence as departure from foreign market, is becoming a mass phenomenon similar to entering a foreign market in this era of globalization. The definition of the concept started to came into existence around 90’s. According to Johanson and Vahlne (1990), internalization is “a process of developing networks of business relationships in other country markets through extension, penetration, and integration,” while deinternalization is the reverse in terms that it is the process of cutting contacts or withdrawal from the other economy market. Further, Benito and Welch (1997) define it as “any voluntary or forced action that reduce a company`s engagement in or exposure to current cross-border activities.”

Typology of de-internalization shows the continuum of de-internationalization in which an organization is positioned in the international market in terms of total and partial withdrawal. Divestment is also part of de-internationalization. For both home and host economy, it has now become a considerable part of business strategy. The concept of Foreign Divestment is just the opposite of the Foreign Direct Investment (FDI) concept; therefore, the determinants of divestment can be similar to that of FDI although having opposite sign (Chen and Wu, 1996). Further, divestment decisions offer information about organizations prospects for future leading to valuation implications.

Foreign Direct Divestment: An Overview:

The process of internationalization has led to the emergence of not only foreign direct investment but also divestment of such investment. Divestment of foreign investment is deliberate or forced diminution of activities or capacity by an entity in terms of closing part of its work or selling it. According to Nowara (2013), transformation in the activities and/or ownership of foreign subsidiaries leads to foreign divestment of an organization. The determinants of foreign direct investment are also the determinants of foreign direct divestment but with the opposite sign at different levels for parent company, subsidiary and host economy. Boddewyn (1983) based on Dunning’s three conditions found that foreign direct divestment takes place when an organization no longer enjoys net competitive advantages over organizations of other economies; or when it has competitive advantages but it is not lucrative to internalize these advantages; or it became less beneficial to remain in other foreign markets through this particular mode. Various studies have found that in most of the cases, divestment is the result of poor performance of an organization (Berry, 2010; Njuguna, 2010; Steenhuis and Bruijn, 2009). Further, relatedness of product market and market differences at geographical level can moderate the negative relationship between performance and divestment through various macroeconomic parameters like stable policy, volatility of exchange rate and economic growth (Berry, 2013).

In 2018, global foreign direct investment flows persistently decreasing by 13 percent. This decline is mainly because of United States multinational enterprises through repatriations at United States of foreign earnings and tax reforms. Since 2004, with a decline of 27 percent, FDI flows to developed countries arrived at the lowest level, however, for developing economies, it is quite stable with an increase of around two percent (UNCTAD, 2019). According to Global Asian Profile 43 Corporate Divestment Study (2019) of EY, 84 percent of organizations are planning to divest within next two years, which is a global average of 85 percent American, 82 percent Asia-Pacific, 84 percent of Europe, Middle East and Africa. Further, it has been found that the drivers which prompt divestment are sector convergence, advancement of technology, geopolitical shift and strategic move in terms of grasping the opportunity. When an opportunity came in to existence, potential divestment preparation helps in meeting cost and time prospects. Strategic opportunities also help in understanding performance of business in terms of data reliability. Therefore, organizations at the international level should not be reluctant to acknowledge FDD as an integral part of strategy.

Foreign direct divestment has become a strategic shift for organizations to meet the prospects of the various shareholders. Still, it is suggested by some studies that divestment should be last step, however, if it provides better opportunities then that must be done as it plays an incredibly significant role in reforming organizations and their sustainable growth.

Why Special Issue?

This is the most neglected area of research. Limited availability of literature; information and data, It was felt that there is a need to touch upon this rea of research especially in developing economies in general and emerging economies in particular. Hence, I decided that a Special Issue be organised and published on emerging importance and trends in FDI divestment in developing countries in general and emerging economies in particular. Therefore; the main objective of the special issue is to invite academicians; professionals; policy planners and makers to examine the role and contribution of FDI divestment in the process of growth and development of economies of the developing and emerging economies of the world.

Research in world Economy:

The journal namely- Research in World Economy (RWE) is a well-established academic SCOPUS journal [ Cite Score in 2020 0.4] having readers across the world. The journal has agreed upon to publish the special issue in coming year 2021. The special issue of RWE may serve a great cause for brining to light the neglected areas of research on FDI divestment to the readers of the journal.

The special issue may prove to be store house of knowledge on the FDI Divestment. The journal is published by SCIEDU Press; Canada. Every accepted paper has to bear the Article Processing Fee (APF) of US$ 400/-

Tentative topics for papers:

Conceptual framework;

Significance of FDI Divestment in the growth and development of an economy;

Role and contribution of FDI divestment in building up strong corporate sector;

Emerging trends in Inflows and Outflows of FDI Divestment;

Issues related to FDI divestment;

Determinants of FDI Divestments;

Role in reforming organizations and their sustainable growth;

NB: - The authors/ contributors are free to write the paper on any other aspects of FDI

Divestment that is not covered under tentative topics given above.

Deadline for Papers:

The papers may be accepted on or before 28th February 2021.

The authors or contributors may submit their respective papers to Guest Editor;

Dr. Badar Alam Iqbal; Emeritus Professor and Professor Extraordinary on the following Email IDs.

badar.iqbal@fulbrightmail.org/ biqbal@daad-almuni.de/ dr.iqbal@monarch-university.ch