Journal Press India^®

This issue of FOCUS has an interesting amalgam of diverse perspectives on IB related issues ranging from multilateral governance system and implications of Offshore Financial Centres to implications of agricultural subsidies and spillover effects of FDI.

We have an Invited article in this issue from Prof. Raymond Saner, Titular Professor Emeritus, Department of Economics & Management, University of Basel, Switzerland and Prof. Lichia Yiu, President, Centre for Socio-Economic Development Geneva, Switzerland. The authors discuss the strengthening of the governance system of the ILO Multinational Enterprise Declaration (MNED). The paper reviews official documents and expert critiques using a policy analysis framework to identify weaknesses and propose recommendations. The paper is significant in light of the fact that strengthening the MNED is crucial for advancing Sustainable Development Goal 8, which emphasizes decent work and economic growth, especially in regions with weak institutional frameworks for workers’ rights.

An interesting paper by Mr. Rohan Prasad Gupta and Dr. Bappaditya Biswas examines the tax implications of Offshore Financial Centres that are used as avenues by multinational enterprises (MNEs) to mitigate tax payments. The paper provides insights into the mechanism of reducing tax liabilities by MNEs through the case studies of Microsoft, Vodafone and Amazon. In order to address the taxation issue comprehensively, the BEPS strategy typically identifies fifteen actions and provides justification for a mark to be applied to the activities of the MNCs.

The spillover effects of foreign direct investment constitute an important dimension of international business activity. The paper by Dr. Meghna Malhotra, Prof. K. V. Bhanumurthy and Dr. Deepa Saran studies the spillover effects of disembodied technological progress between foreign firms and domestic firms in Indian manufacturing firms during the period 2000-01 to 2018-19, using Malmquist Index, of productive efficiency. The findings of the study reveal that foreign firms are found to be initially more efficient in 9 out of 13 industries, but due to dynamic spillover effects, there are ‘positive spillovers’ from foreign to domestic industries in 7 cases; and ‘negative spillovers’ from domestic to foreign firms in 6 industries. The study is important from a policy perspective and the authors suggest that the government should encourage FDI only in those sectors in which there are positive spillovers rather than as a blanket approach.

Another insightful paper is by Dr. Shobha B. G. that examines the interactive relationship of exchange rates with gold and silver prices. The paper tests the relationship between currency exchange rates and the prices of gold and silver in domestic and international markets from 1971 to 2023. The major currencies covered in the analysis are SDR, US Dollar, Pound Sterling, Japanese Yen, Deutsche Mark and Euro. The results show that in Mumbai and London markets, there are significant positive correlations between the values of gold and silver and exchange rates. Mr. Vikas Kumar explores the impact of agricultural subsidies on industrial sector development in developing countries. The paper examines the direct and indirect effects of subsidies on industrial development through a comparative analysis of India, Brazil, and Kenya. The findings of the paper reveal that while subsidies enhance rural incomes and demand for industrial goods, they may also distort resource allocation and reduce competitiveness. The author recommends aligning subsidies with broader economic goals, promoting agricultural innovation, and ensuring that subsidies do not undermine industrial competitiveness.

The paper on ‘Examining association between consumption, production and foreign trade: A study of select economies’ by Dr. Vinod Kumar Adwani attempts to form an effective concept to measure the consumption level of a domestic territory and to find the relationship between the production, consumption and foreign trade. This study is focused on the measurement of consumption level of top ten global economies along with level of the self-reliance/dependency on the imports. Ms. Nidhi Yadav and Dr. Shivendra Singh examine the impact of sectoral dynamics on economic growth. Employing the Cobb-Douglas production function, they determine how different macroeconomic factors affect the components of the GDP. The study finds significant influence of FDI, net FII equity, and imports on GDP. However, it didn’t observe a significant influence of net FII debt on GDP sub-components. While exports had little impact on the manufacturing and industrial sectors, services had a huge impact.

This issue of FOCUS has a Book review by Mr. Soumyajit Das for the book ‘Marketing of High-Technology Products and Innovations’. The review provides a summary of the book, its major objectives, intended audience and comparison with other works along with its contribution to the IB literature and implications for policy and research related to IB.

With the untiring efforts of our Editorial team, authors and reviewers, FOCUS continues to delve into pertinent issues of international business and we thank all of them for their unconditional support.

Festive greetings to all our readers and our team and wishing all a happy, healthy and prosperous 2025!

Prof. (Dr.) Niti Bhasin
Editor-in-chief