Role of foreign direct investment – As a strategic move towards growth, economic integration and development

2021 ◽  
pp. 002072092199659
Author(s):  
Rima H BinSaeed
Keyword(s):  
Saudi Arabia ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Vital Role ◽  
Foreign Investors ◽  
Technological Infrastructure ◽  
Industrial Sectors ◽  
Vision 2030 ◽  
International Investors ◽  
The Government

Kingdom of Saudi Arabia with its developed economy and advanced technological infrastructure has shown a major progress in business opportunities for overseas investors. Saudi Arabia’s education sector is one of the most attractive investment opportunities for the foreign investors Earlier in 2019, 9 new foreign education enterprises were granted investor licenses, amounting to a total of $141mn of investment deals. The Saudi government introduced Saudi Vision 2030, an aspiring development plan that foresees vital prospects for foreign investors in the regions of education, housing, health and energy, amongst others. In 2016, Saudi Arabia permitted the procurement of 100% of assets by foreign investors in retail and wholesale trade. A privatisation program has also been introduced. The government also attempts to attract FDI in the regions of renewable energy and entertainment. A foreign direct investment (FDI) plays a vital role in local and international economy. Several opportunities and ventures are encouraged by Saudi Arabia to improve the standard of business and economical environments. To accomplish the finances for the projects SAGIA, the lawful authority is there to smooth the progress of investments, which encourages Saudi FDI prospective to grow simultaneously. FDI has a greater scope for diverse businesses and investing in to underdeveloped industrial sectors. FDI plays an important role in boosting the economy of Saudi Arabia by managing international investors who shares the huge portion of 34% in General GDP (Gross domestic product) of Saudi Arabia. This paper aims to review the literature to shed light on the steps taken by the government to increase FDI in the country and what are the current trends that are helping to fulfil VISION 2030.

scholarly journals The Impact and Contribution of FDI to Saudi Economy During King Abdullah Regime

2020 ◽  
Vol 11 (6) ◽  
pp. 37
Author(s):  
Khaled Jadeaf Alanazi ◽  
Salawati Mat Basir
Keyword(s):  
Saudi Arabia ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Capital ◽  
Regulatory Environment ◽  
Investment Promotion ◽  
Incentive Policies ◽  
The Government ◽  
The Impact ◽  
Opening Up

Foreign Direct Investment resulted in the disclosure of different investment chances and opportunities through active investment promotion agencies. A country must execute various reforms capable of improving the fundamental determinants of FDI for achieving a high percentage of Foreign Direct Investment. These reforms among others include improving investment laws, reducing political risk and level of corruption, establishing a consistent legitimate and regulatory environment, freeing repatriation of funds and capital, as well as opening up to international trade. Saudi Arabia adopted generous incentive policies for attracting foreign capital and invite Foreign Direct Investment during king Abdullah regime. These policies present positive incentives while eliminating negative disincentives. Positive incentives consist free custom duties, reductions of tax and export zones, by the government of Saudi Arabia. Disincentives elimination to investments indicates the removal of overlong and rigid systems as they can delay visas issuance, restraint travel and complicate the licensing and registration of a project. This paper discusses the impact of FDI on Saudi economy during King Abdullah regime and finally, ascertains the contribution of FDI to Saudi Economy during King Abdullah regime.

scholarly journals What worth is a BIT? Impact of BITs on FDI Inflows into India

2018 ◽  
Vol 4 (02) ◽  
Author(s):  
Anshuman Kamila ◽  
Mitali Chinara
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Best Practice ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
New Model ◽  
Indian Model Bit ◽  
The Government

Developing countries often consider foreign direct investment (FDI) as an engine to boost economic growth. Therefore they try to promote investment inflow by various means. One approach is to offer investment guarantees to foreign investors using Bilateral Investment Treaties (BITs). Following international best practice, India has signed a number of BITs to stimulate inflow of FDI. Till date, the Government of India has signed BITs with 83 countries. These BITs were largely negotiated on the basis of the Indian Model BIT of 1993. There have been recent moves that point in the direction of India fundamentally altering the text of its BITs with countries, including calling off existing BITs and approving a new model BIT. However, concerns have been raised as to the possible pernicious impact of these changes on the inflow of FDI into India. This paper investigates whether the concern is warranted at all – by asking if BITs significantly impact the inflow of FDI. It is established that BIT is indeed a veritable boost to FDI inflow, and the estimated coefficient remains significant and robust across econometric specifications. Therefore, a note of caution is sounded for the rejigging exercise involving BITs that has been initiated by India.

scholarly journals Determinants of Foreign Direct Investment in Saudi Arabia: A Review

2017 ◽  
Vol 9 (7) ◽  
pp. 222
Author(s):  
Haga Elimam
Keyword(s):  
Economic Growth ◽  
Saudi Arabia ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Maximum Flow ◽  
International Capital ◽  
Host Government ◽  
The Government

Foreign direct investment is identified as the major tool for the movement of international capital. Thus, the study has employed a review research to examine the determinants of foreign direct investment in Saudi Arabia. The results are significant as they have contributed towards determinants of foreign direct investment by comparing with previous studies. The results showed that trade openness, infrastructure availability, and market size play significant role in attracting foreign direct investment within a country. The inflow of foreign direct investment has a potential to benefit the investing entity as well as the host government. It also renders economic growth and socioeconomic transformation of the country. The flow of foreign direct investment in Saudi Arabia is affected by several factors including growth rate, GDP, exports and imports. It is the duty of the government to ensure the attractiveness of their country to maintain maximum flow of foreign direct investment, as it promotes sustained long-term economic growth by increased investment in the human capital.

Saudi Arabia will seek Arab diplomatic leadership

2021 ◽  
Keyword(s):  
Saudi Arabia ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Border Region ◽  
Diplomatic Relations ◽  
Commercial Activity ◽  
Content Type ◽  
The Us ◽  
Vision 2030 ◽  
Southern Border

Significance This comes as the US Yemen envoy engages on a new Saudi-Huthi peace mission, while Washington and Iran intensify Vienna talks on a return to the nuclear deal. Riyadh is comprehensively revising its diplomatic relations as it seeks to adjust to the new US administration’s policies and refurbish its global image. Impacts Successful regional diplomacy will enhance the kingdom’s ability to secure the foreign direct investment needed for Vision 2030. The re-establishment of ties with Iran would ease the Yemen conflict and increase the number of pilgrims visiting Mecca. Ending the Yemen war would allow Saudi Arabia to open up towns in the southern border region to more commercial activity.

Energy Consumption, GDP, and Foreign Direct Investment in Germany

2014 ◽  
Vol 675-677 ◽  
pp. 1797-1809
Author(s):  
Kuo Cheng Kuo ◽  
Sue Ling Lai ◽  
Khunlaphat Chancham ◽  
Ming Liu
Keyword(s):  
Energy Efficiency ◽  
Foreign Direct Investment ◽  
Energy Consumption ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Service Industry ◽  
Renewable Energy Sources ◽  
Economic Activities ◽  
Foreign Investors ◽  
The Government

This research studies the causal relationship between energy consumption, gross domestic product (GDP), and foreign direct investment (FDI) in Germany for a period of 1971-2010. The empirical results reveal that there is a unidirectional causality running from GDP to energy consumption and from GDP running to FDI in Germany. This is due to the highly rising trends of economic activities in the country which can lead to the expansion in energy consumption. As there is an increase in economic activities within the country, then the growth rate will be in the rising path. As a result, the foreign investors will see the promising future and then invest in the host country. The conservative energy policy is recommended to support the energy saving because it will have little or no adverse effect on GDP. The energy efficiency should be applied by encouraging the use of renewable energy sources in economic activities as an alternative to stimulate the economic growth of the country. Also, the public expenditure should be expanded to increase the country’s economy and attract foreign investors. In addition, the government should support for the service industry such as insurance, finance and banking, and tourism because this type of industry does not consume as much energy as the manufacturing industry does in the overall manufacturing processes. Besides, the government should provide tax credit for the manufacturers who can fulfill the energy efficiency for their operation.

scholarly journals THE EFFECT OF AGGREGATE INSTITUTIONAL QUALITY ON FOREIGN DIRECT INVESTMENT IN NIGERIA: EVIDENCE FROM NARDL

2020 ◽  
Vol 2 (2) ◽  
pp. 1-13
Author(s):  
Musa Sakanko ◽  
James Obilikwu ◽  
Joseph David
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Quantitative Research ◽  
Time Series Data ◽  
Institutional Quality ◽  
Legal Framework ◽  
Vital Role ◽  
Series Data ◽  
Long Run ◽  
The Government

The vital role of foreign direct investment has been widely studied and documented in the economic literature; however, the argument remains largely on identifying the main determinants of FDI to developing countries. It is on this note, the quantitative research method was adopted to investigates the asymmetric relationship between aggregate institutional quality and foreign direct investment in Nigeria using the Nonlinear Autoregressive Distributive Lag (NARDL) model on quarterly time-series data from 1999 Q1 – 2019 Q4. The bounds test obtains revealed that long-run co-integrating relationship exist among the variables. The NARDL result shows that both in the short-run and long-run aggregate institutional quality have asymmetric and a statistically significant effect on foreign direct investment. The study recommends that the government should establish or strengthen the quality of institutional indicators and legal framework to assure confidence in the system to motivate Foreign Direct Investment (FDI) inflow.

scholarly journals Invest In India–The Foreign Direct Investment Scenario

2011 ◽  
Vol 2 (4) ◽  
pp. 138-153
Author(s):  
Kamaladevi B
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Retail Sector ◽  
Global Response ◽  
Strategic Vision ◽  
Domestic Capital ◽  
Investment Opportunities ◽  
International Investors ◽  
The Government ◽  
Medium Enterprises

Invest in India is an initiative to market India as an investment destination all over the globe, to provide a networking platform to the Indian businesses at a global level and to provide information to the international investors about investment opportunities in India. It is the policy of the Government of India to attract and promote productive Foreign Direct Investment (FDI) from non-residents in activities which significantly contribute to industrialization and socio-economic development. FDI supplements the domestic capital and technology. This paper firstly speaks about the FDI culture in India, secondly, reviews economic reforms in India and global response to India’s reforms, the next level discusses the policy issues that would address India’s relative lack of success in attracting FDI and the ‘Expanding Opportunities for Global Retailers’ with reference to the retail sector. The last part reveals the key recommendations towards attracting Diaspora FDI. Based on the objective analysis, the key recommendations towards attracting FDI are revealed like allow 100 % FDI in retail and Small & Medium Enterprises (SME), develop a strategic vision for FDI with focus on latest technology, reduce the transaction costs & improve the infrastructure, international and domestic entrepreneurship, decentralize the administration process, reduce overly bureaucratic FDI facilities, private public partnership with private sector taking the lead, Indian professionals placed in key decision making positions, creative joint ventures and partnership to tap entrepreneurship and fix the policies to convert remittances into investment & create venture capital.

scholarly journals Impact of Taxation on Foreign Direct Investment: Empirical Evidence from Pakistan

2021 ◽  
Vol 9 (1) ◽  
pp. 10-18
Author(s):  
Muhammad Nouman Shafiq ◽  
Liu Hua ◽  
Muhammad Azhar Bhatti ◽  
Seemab Gillani
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Developing Economies ◽  
Trade Openness ◽  
Vital Role ◽  
Series Data ◽  
Fdi Inflows ◽  
Distributed Lag ◽  
The Government

Foreign direct investment plays a vital role in promoting economic growth, especially for developing economies. It causes improvement in the different sectors such as education, healthcare, manufacturing industries, and creates more jobs. The speed of FDI inflows has been increasing in Pakistan each year. In order to attract more FDI, many countries try to reframe their tax policies by introducing different tax incentives such as tax holidays, investment allowances, exemptions, deductions etc. The purpose of the present paper is to find the implication of taxation in the decision of FDI inflows in Pakistan. Time series data is used spanning over 1985 to 2020. The data was obtained from two sources: the “World Development Indicator” (WDI) and “Economic Survey of Pakistan”. “Auto-Regressive Distributed Lag” (ARDL) and “Error Correction Model” (ECM) techniques are used for empirical analysis. The study concludes that low taxes motivate foreign investors' investment contribution and the long-run relationship between taxes and FDI in Pakistan. Other control variables, including GDP growth, trade openness and exchange rate, positively impact FDI. It is suggested that decision-makers should direct policies to reduce the taxes to welcome FDI in Pakistan. In this regard, the government needs to reconsider its priorities while making policies favouring FDI.

scholarly journals THE ROLE OF INTERNATIONAL COMMERCIAL ARBITRATION IN ENHANCING FOREIGN DIRECT INVESTMENT: LESSONS FOR ALGERIA

2020 ◽  
Vol 11 ◽  
pp. 225-243
Author(s):  
Takyeddine Hathout ◽  
Rohana Abdul Rahman ◽  
Mohd Zakhiri Md. Nor
Keyword(s):  
Foreign Direct Investment ◽  
Emerging Economies ◽  
Direct Investment ◽  
Legal Framework ◽  
Economic Activities ◽  
Commercial Arbitration ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
International Commercial Arbitration ◽  
International Investors

Following the upsurge and development in the globalized and emerging economies, commercial misunderstanding and disputes transcending national borders may also be on the rise. Such disputes can hamper the economic activities and operation within those emerging economies, in particular those activities related to the foreign direct investment. National legal mechanism may not be attractive to international investors. Instead, international commercial arbitration (ICA) could be a preferred choice by foreign investors through which contractual disputes can be resolved via independent forum because it helps to foster market efficiency, facilitate foreign direct investment and protect the interest of foreign investors. To offer insights on this issue theoretically and empirically, this paper presents a logic-based and empirically based conceptual discussion to investigate the influence of ICA on FDI, in particular its application in the context of Algeria and the importance of domestic courts’ execution of arbitral awards. The paper finds that ICA is indispensable to contractual conflict resolution and can consequently assists FDI inflows into the country that entrenches it. Algeria may increase FDI inflows by strengthening the legal framework for arbitration through the enhancement of national laws relating to ICA and guaranteeing their effective execution and enforcement by local judicial system.

scholarly journals Human Capital Reputation as an Antecedent of Foreign Direct Investment Market Entry in Zimbabwe

2017 ◽  
Vol 9 (5) ◽  
pp. 185-199
Author(s):  
Tafadzwa Matiza ◽  
Sandra Perks
Keyword(s):  
Human Capital ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Market Entry ◽  
Online Survey ◽  
Nation Branding ◽  
Foreign Investors ◽  
Practical Guidelines ◽  
Investor Behaviour ◽  
The Government

 This paper examines the influence that the reputation of Zimbabwe’s human capital has as an antecedent of FDI market entry opportunities in the country. By synthesizing nation branding, behavioural finance and foreign direct investment theory, this paper contributes to the growing body of knowledge in human capital as a determinant influencing foreign investor behaviour within an African economic context. Empirical data was generated from a self-administered online survey of a purposively sampled population of 305 foreign investors within the Zimbabwean context. Exploratory factor analysis extracted the items that constituted the Zimbabwean human capital construct, with Cronbach’s alpha coefficients being utilized to measure the reliability of the measuring instrument. Descriptive statistics, Pearson product-moment coefficients and multiple regression analysis were employed to further analyze the data. The results revealed that foreign investors considered the availability of a sustainable, highly productive, skilled, retainable and inexpensive workforce, as the influential human capital attributes they considered for FDI to Zimbabwe. The empirical evidence further affirmed that the reputation of Zimbabwe’s human capital is an antecedent for resource- and efficiency-seeking FDI typologies to Zimbabwe. As a result, practical guidelines are provided for the Government of Zimbabwe and the Zimbabwe Investment Authority on the potential development and promotion of Zimbabwe’s human capital for the purpose of positively influencing investor behaviour, thereby attracting FDI to the country. 

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