Barriers to foreign direct investment in the power sector: evidence from Bangladesh

2019 ◽  
Vol 18 (3) ◽  
pp. 310-333 ◽  
Author(s):  
Tareq Mahbub ◽  
Juthathip Jongwanich
Keyword(s):  
Sustainable Development ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Structured Interviews ◽  
Power Sector ◽  
Content Type ◽  
Political Interference ◽  
The Government ◽  
The Individual ◽  
The Right

Purpose The purpose of this study is to investigate factors that deter firms from pursuing foreign direct investment (FDI) in Bangladesh’s power sector. Design/methodology/approach The study uses a mixed-method approach comprising semi-structured interviews and questionnaires. A quantitative analysis including a one-way analysis of variance and analytical hierarchy process is also included. Findings The results reveal that political aspects are the most influential barriers impeding FDI in the power sector, followed by economic and financial, societal and regulatory aspects. Of the individual factors, land acquisition/rent/lease, corruption, political interference, an inadequate gas transmission system and a long independent power producers’ approval process are key obstacles deterring FDI in the power sector. The ownership structure matters in ranking decisions to conduct FDI. Practical implications The study can assist managers in identifying key factors that deter FDI in the power sector. It can also assist the government to establish the right policies for the sustainable development of FDI in the power sector. Originality/value This study is the first of its kind in Bangladesh’s power sector that analyzes the key barriers hindering FDI systematically. It also discusses policies on removing these barriers for sustainable development of FDI in the power sector.

Understanding foreign direct investment in Indonesia

2016 ◽  
Vol 15 (1) ◽  
pp. 28-50 ◽  
Author(s):  
Sasidaran Gopalan ◽  
Rabin Hattari ◽  
Ramkishen S. Rajan
Keyword(s):  
Foreign Direct Investment ◽  
Data Analysis ◽  
Direct Investment ◽  
Policy Implications ◽  
Fdi Inflows ◽  
Content Type ◽  
Greenfield Investments ◽  
The Government ◽  
Data Investigation ◽  
Existing Data

Purpose This paper aims to examine the dynamics of foreign direct investment (FDI) inflows into Indonesia. It is interested specifically in analysing and deliberating on two important policy questions: First, are all kinds of FDI useful from a policy perspective and what does the existing data on FDI reveal about the type of FDI inflows into Indonesia? Second, does the existing data help understand the extent of de facto bilateral linkages between Indonesia and other countries? Design/methodology/approach The paper offers an in-depth case study of Indonesia using extensive exploratory data analysis on FDI inflows into Indonesia. As discussed in the paper, the data investigation uses and reconciles available FDI data both from national and international sources to understand the usefulness of such data for policy analysis. Findings A data investigation of the trends in different types of FDI flows reveals a discernible downward trend in the ratio of mergers and acquisitions (M&A)–FDI ratio over the years. The paper argues that from a sequencing perspective, while a medium-to-long-term framework encouraging both domestic and foreign Greenfield investments could help Indonesia regain its growth luster, in the near term much more attention needs to be paid to FDI inflows in the form of M&As. Further, reconciling FDI and M&A data might help identify the original sources of FDI flows because existing data are based on flow of funds rather than ultimate ownership. Practical implications Since the Asian financial crisis, Indonesia has successfully embarked on a phase of economic and political transition post-Suharto, with the cornerstones of such a strategy being a process of greater democratisation and decentralisation. However, there have been growing concerns of economic growth stagnation in recent years. One of the policies to revive the economy’s lustre adopted by the government has been to attract greater FDI inflows. In this light, this paper examines the dynamics of FDI into Indonesia and deliberates on what kinds of FDI policymakers should focus on attracting to restore the country’s growth lustre. Originality/value The question of whether a policy to attract FDI should be careful in distinguishing the kind of FDI it wants to attract has not been sufficiently addressed in the related literature. This paper provides a framework to understand the different macroeconomic policy implications of types of FDI and provides extensive data analysis to not only understand the types of FDI but also sources of bilateral FDI inflows to Indonesia by reconciling FDI and M&A data.

Fading FDI faces increasing challenges in Chile

2016 ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Food Industry ◽  
Public Infrastructure ◽  
Sharp Drop ◽  
Content Type ◽  
Investment Promotion ◽  
The Government

Subject The fall in foreign investment last year. Significance The government has launched a new Foreign Investment Promotion Agency (APIE) to buck a sharp drop in foreign direct investment (FDI) last year. Breaking with the country's long-standing sector-agnostic approach, the agency will seek to attract investment to specific sectors, including energy, public infrastructure and the food industry. Impacts A more business-friendly administration in Argentina could potentially divert FDI from Chile. Critics of the new FDI regulation maintain that it will dampen inflows. Efforts to attract investment in food and mining services represent a bid to diversify from mineral exports.

Indonesia's liberal reform reveals growth priorities

2016 ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Payment Systems ◽  
Content Type ◽  
Toll Road ◽  
Insurance Programme ◽  
Road Projects ◽  
Liberal Reform ◽  
National Health Insurance Programme ◽  
The Government

Subject Outlook for foreign direct investment into Indonesia's economy. Significance The government last month revised its Negative Investment List, opening 35 new sectors to foreign direct investment (FDI), especially in the services and trade segments. With these reforms, the government hopes to attract 594.8 trillion rupiah (43.52 billion dollars) of new investment this year. Impacts Firms supporting e-commerce operations, for example through developing secure payment systems, have good prospects. Land clearance hurdles facing toll road projects are unlikely to be resolved easily. The national health insurance programme will help Indonesia harness its demographic dividend.

Georgian protests point to more united opposition

2019 ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Political Instability ◽  
Proportional Representation ◽  
Content Type ◽  
Political Landscape ◽  
The Government

Significance Parliament's failure last month to enact the promised transition to proportional representation sparked demonstrations in Tbilisi and other cities. The ruling Georgian Dream-Democratic Georgia party's immediate position seems safe, but it will have to reckon with signs that a more confident, determined and united opposition is emerging out of the previously diffuse political landscape. Impacts A bout of political instability would reduce the inflow of foreign direct investment. Russia's instinct to exploit turmoil will be curbed by its reluctance to see the opposition win. To address one area of discontent, the government may unblock the Anaklia port project.

Georgian Dream is beleaguered but may win again

2020 ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rates ◽  
Direct Investment ◽  
Content Type ◽  
The Government

Significance The ruling Georgian Dream party faces a more united opposition and mounting pressure from US and EU partners. Economic challenges are increasing as inflation rises, wages remain low and external state debt grows. Impacts Foreign direct investment is set to fall, worsening the outlook for recovery. The Georgian lari is likely to recover but not return to pre-pandemic exchange rates. The government is hoping to open safe 'tourist corridors' to encourage foreign visitors to return. Pro-Russian parties may win some parliamentary seats.

New year brings fresh challenges for Ecuador’s Moreno

2019 ◽  
Keyword(s):  
Foreign Policy ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Vice President ◽  
Local Elections ◽  
Right Wing ◽  
Content Type ◽  
Natural Support ◽  
International Investors ◽  
The Right

Subject Moreno's challenges. Significance President Lenin Moreno begins 2019 with a new vice-president -- his third so far -- and a deeply divided party. Worsening relations between himself and his predecessor are polarising his natural support base. While he has managed to consolidate his position by forming alliances with the right, he remains in a vulnerable position, and will face major political challenges over the coming year. Impacts Moreno’s continued drift to the right will please international investors and help his government attract foreign direct investment. Moreno’s line on Venezuela signals alignment with regional right-wing governments and a further break with Correa’s foreign policy. Political tensions will build as the local elections approach -- isolated episodes of violence will almost certainly occur.

scholarly journals Qualitative validation of a financially affordable Islamic home financing model

2018 ◽  
Vol 10 (2) ◽  
pp. 143-161
Author(s):  
Mohd Zaidi Md Zabri ◽  
Mustafa Omar Mohammed
Keyword(s):  
Good Governance ◽  
Third Sector ◽  
Limiting Factors ◽  
Structured Interviews ◽  
Middle Income ◽  
Content Type ◽  
Small Industry ◽  
The Government ◽  
Medical Relief ◽  
The Right

Purpose This study aims to validate a potential synergistic venture between cash waqf (Islamic endowment) institutions (CWIs) and financial cooperatives (FCs) in the provision of affordable Islamic home financing (IHF) in Malaysia. Design/methodology/approach The study adopted semi-structured interviews with ten experts to validate the cash waqf-financial-cooperative-mushārakah mutanāqiṣah (CWFCMM) model. Thematic analysis technique was used to analyse the verbatim texts. Findings The findings show that the majority of the informants have positive perceptions of the potential of the CWFCMM model to provide financially affordable IHF products in Malaysia. Nevertheless, this study sheds light on the varying degrees of latent issues and challenges that might arise in the implementation of this model. For example, FCs need to practice the correct business model, implement good governance structures and employ the right people. Meanwhile, CWIs need to work on their accountability issues by publishing their audited accounts in mainstream newspapers, much like what is being done by non-governmental organisations such as the widely recognised Malaysian Medical Relief Society (MERCY Malaysia). Research limitations/implications This study interviewed a small, industry-specific number of informants in generating its findings. Time and budget constraints are some of the limiting factors in carrying out the study. Because of these factors, the generalisation of the study’s findings will be limited. Practical implications First, the CWFCMM model offers an alternative, financially affordable IHF instrument to low- and middle-income households in Malaysia. Second, the involvement of third-sector institutions such as FCs and CWIs in the provision of IHF will reduce the burden of the government in its spending on home financing solutions for civil servants. Third, this model will harness the potential of waqf-based financing beyond the contemporary limited applications to mosques, graveyards and taḥfīẓ (Qurʾan memorization) schools. Originality/value This study presents an alternative IHF model that transcends the current institutional framework that is heavily dominated by Islamic commercial banks and government-owned home financing institutions. The study does not focus on a single third-sector institution but on an integration of at least two of them, CWIs and FCs, in implementing the IHF model.

Swedish sustainability through a Zhang and London lens

2016 ◽  
Vol 26 (4) ◽  
pp. 370-394 ◽  
Author(s):  
Lars Lindbergh ◽  
Mattias Jacobsson ◽  
Timothy L. Wilson
Keyword(s):  
Sustainable Development ◽  
Formal Model ◽  
Content Type ◽  
Secondary Sources ◽  
Study Approach ◽  
The Government ◽  
Definition Of ◽  
The Right ◽  
High Level

Purpose The purpose of this paper is to describe how sustainable development has been initiated in a country (Sweden) in which sustainable development has priority and has produced observable results – essentially, the definition and reshaping of contents (p. 107) referred to in the Zhang and London (ZL) paper, therefore adding some validity to the model. Design/methodology/approach The research is both exploratory and qualitative in nature and uses an in-depth case study approach to the Swedish international economy as might be reflected by ZL’s modified Porter model. Information drawn from current secondary sources is complemented by personal contemporaneous observations of individuals in the country of interest. Findings The task of implementing Sweden’s strategy for sustainable development is holistic, and the State has played a major role in its development. That is, sustainability is the responsibility of the Government Offices as a whole, which produces proactive programs in each of the interactions analyzed in the ZL modified model. As an aside, the country has sustained a high level of competitiveness while producing a pleasant environment in which to live. Research limitations/implications Limitations in the study follow the same criticisms made of Porter’ seminal treatment – (still) lack of a formal model construction (although ZL make a meaningful contribution), (still) lack of clear definitions (although ZL make a meaningful contribution), problematic research methodology (although an attempt has been made at improvement) and lack of empirical testing among others (and it is thought that this paper is a step in the right direction). Practical implications Insofar as Sweden might be a model for other countries interested in extending their efforts in sustainable development, observations here provide some insights into possible approaches and results. Originality/value The approach basically followed Siggelkow’s (2007) definition of the use of cases as illustrations, which is useful when the underlying development depends upon constructs. It follows that the association of real-world observations with theory well serves the underlying foundation and cannot help but build credibility of those concepts and theory.

scholarly journals The Measure of Financial Stability and its Impact on Foreign Direct Investment: Evidence from BRIC Nations

2020 ◽  
Vol 5 (2) ◽  
pp. 80-93
Author(s):  
Anjala Kalsie ◽  
Jyoti Dhamija ◽  
Ashima Arora
Keyword(s):  
Foreign Direct Investment ◽  
Financial Stability ◽  
Direct Investment ◽  
Jel Classification ◽  
Least Square ◽  
Regression Framework ◽  
The Government ◽  
The Stability ◽  
The Right ◽  
The Impact

The stability of the economy has explicitly become a key objective for fiscal, economic, and monetary policy. It is a broader term described by different aspects of finance and the financial system. One variable cannot be recognized for defining and achieving stability. The purpose of this paper is two-fold, one to construct four measures of financial stability (MFS). The second purpose is to use the four constructed measures of financial stability in two stage least square (TSLS) regression framework to know the impact of MFA on Foreign Direct Investment (inwards) of BRIC for a period from 2000-2017. In case of Brazil, all the four measures of financial stability are significant. In case of Russia, government finances are not appropriately managed. In case of China, the large inflow of FDI is because of government policies as rest of the measures are negative. In case of India, the government measures are not efficient to attract the FDI.The openness of the economy is positively contributing to FDI in all countries except India. Of all the four nations Brazil is on the right path. JEL Classification Codes: F4, F6, H11, E60.  

scholarly journals Regional Marketization, OFDI, and Sustainable Employment: Empirical Analysis in China

2019 ◽  
Vol 11 (15) ◽  
pp. 4101
Author(s):  
Ruan ◽  
Liu ◽  
Na ◽  
Tan ◽  
Xue
Keyword(s):  
Sustainable Development ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Substitution Effect ◽  
Sustainable Growth ◽  
System Construction ◽  
Promotion Effect ◽  
The Sustainable Development ◽  
The Government ◽  
Labor Resources

To maintain sustainable development, the government’s macro control is very important, but the system construction of the market itself can’t be ignored. From the perspective of aggregate supply, OFDI (outward foreign direct investment) in developing countries can sustainably promote domestic employment through different kind of channels such as human capital, a reverse spillover of the international technology, and marketization processes. Based on 30 provincial panel data from 2005 to 2017, stating from the C–D production function, this article empirically estimates the total effect and regional differences in the effect of OFDI on domestic employment in China by using the main approach of Sys-GMM. The results show that the promotion effect of OFDI on domestic employment has an obvious lag; the faster the marketization process, the more significant the current period’s substitution effect and the lagged period’s promotion effect of OFDI on domestic employment. This means that it is a lagged-period process for OFDI to enhance total factor productivity and realize the effective allocation of labor resources through various channels. Furthermore, whether the domestic promotion effect of OFDI can be effectively exerted is closely related to the process of domestic marketization. A good market system environment can effectively improve the efficiency of labor resources allocation, thus promoting the sustainable development of domestic employment. China’s market-oriented transformation has not yet been completed. The sustainable growth of China’s employment depends on further promoting a market-oriented economy. Therefore, it is suggested to accelerate the improvement of market mechanisms and related system construction, strengthen the role of the government in public service, and promote the coordinated development of OFDI and IFDI (inward foreign direct investment) in various regions to promote the sustainable development of employment.

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