scholarly journals Determinants of foreign direct investment in Lesotho: evidence from cointegration and error correction modeling

2013 ◽  
Vol 10 (1) ◽  
pp. 99-106
Author(s):  
Malefa Rose Malefane
Keyword(s):  
Foreign Direct Investment ◽  
South African ◽  
Direct Investment ◽  
Political Stability ◽  
Promotion Strategy ◽  
Investment Promotion ◽  
Regulatory Frameworks ◽  
Critical Issues ◽  
Red Tape ◽  
Error Correction Modeling

Over the past decade, Lesotho has recorded a substantial increase in levels of foreign direct investment (FDI) inflow, part of it prompted by trade privileges. Building on the extant literature, this study provides an empirical analysis of determinants of FDI in Lesotho. The study looks at how macroeconomic stability, regulatory frameworks, political stability and market size affect FDI.  The evidence from this study shows that some of the foreign enterprises in Lesotho are there to serve a bigger South African market. Also, the country has benefited from a more export-oriented investment promotion strategy. Critical issues however remain that must be addressed if the country is to attract more FDI and retain existing investors .These issues pertain to bureaucratic red-tape, corruption and political instability.

scholarly journals Measuring the inward FDI potential of South African regions

2008 ◽  
Vol 8 (1) ◽  
Author(s):  
W. Krugell ◽  
M. Matthee
Keyword(s):  
South Africa ◽  
Foreign Direct Investment ◽  
South African ◽  
Foreign Investment ◽  
Local Governments ◽  
Direct Investment ◽  
Potential Contribution ◽  
Skills Transfer ◽  
Foreign Investors ◽  
Investment Promotion

Purpose: The purpose of this paper is to construct an index that captures the factors expected to affect a local economy's attractiveness to foreign investors. Problem statement: Following South Africa's reintegration into the world economy in 1994, foreign direct investment has been seen as a potential driver of growth and development. Concerns about the low investment rate in South Africa raise the possibility of augmenting domestic with foreign investment expenditure. The potential of technology spillovers and skills transfer from foreign direct investment have also been emphasised. As a result, Trade and Investment South Africa is involved in identifying, packaging and promoting investment opportunities. However, investments tend to be place-specific and this has lead to the decentralisation of foreign direct investment promotion. Currently the nine provincial development agencies are competing to attract investors and the larger local governments are also getting involved in the fray. This paper argues that some places have better potential to attract foreign investment than others. A first step to use scarce investment promotion resources more efficiently would be to measure the inward FDI potential of South African regions. Approach: This paper uses principal components analysis to construct an index that captures the factors expected to affect a local economy's attractiveness to foreign investors. This approach draws on UNCTAD's Inward FDI Potential Index and applies it to 354 magisterial districts in South Africa for the periods 1996, 2001 and 2006. The index creates a summary measure of FDI potential.Findings: The results show that different places present differential potential in urbanization and localization economies and market size. The high-potential locations are typically found in or around the major agglomerations, but there are a few smaller places on the periphery that offer FDI potential. Contribution: The index should aid the location decisions of prospective investors as well as local policymakers in their efforts to promote FDI-led economic development. Conclusion: The places with high FDI potential are not randomly scattered across South Africa, but tend to cluster together. Cities and towns can improve their attractiveness to foreign investors through the exploitation of natural resources, population growth, economic growth and strengthening links to metropolitan areas.

scholarly journals Investment promotion in the South African manufacturing industry: incentive comparisons with Malaysia and Singapore

2014 ◽  
Vol 17 (3) ◽  
pp. 319-335 ◽  
Author(s):  
Martha SI Wentzel ◽  
Maxi Steyn
Keyword(s):  
South Africa ◽  
Foreign Direct Investment ◽  
South African ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
The South ◽  
Short Term ◽  
Foreign Investors ◽  
Investment Promotion ◽  
Inward Foreign Direct Investment

South Africa needs to increase its inward foreign direct investment in order to achieve economic growth. The purpose of this article is to explore which intervention could be launched in the short term to enhance the country's attractiveness for foreign investors. The findings of the literature review demonstrated that incentives, as a determinant of investment, are the short-term intervention with the most significant potential to attract additional foreign direct investment. A comparative study, which provided insight into the incentives that are currently offered to the manufacturing sectors of three countries (South Africa, Malaysia and Singapore), assisted in identifying two additional incentives that the South African government could introduce and three existing incentives that could be amended. The introduction or modification of these incentives could ensure that South Africa has a competitive advantage to attract investment from foreign investors and thereby increase South Africa's inward foreign direct investment in the manufacturing industry.

تأثير الاستثمار الاجنبي المباشر في القيمة السوقية للشركة (دراسة تطبيقية في شركة بترو جانيا الصينية في عقود التراخيص النفطية للجولة الاولى والثانية في الحقول النفطية في العراق للمدة من 2017-2010)

2020 ◽  
Vol 2020 (66) ◽  
pp. 65-85
Author(s):  
هيثم عبد النبي موسى ◽  
أ .د حيدر نعمة غالي الفريجي
Keyword(s):  
Foreign Direct Investment ◽  
Stock Prices ◽  
Return On Investment ◽  
Direct Investment ◽  
Inverse Correlation ◽  
Market Value ◽  
Political Stability ◽  
Coefficient Of Determination ◽  
Independent Variable ◽  
The Impact

This study dealt with the effect of foreign direct investment on the market value of the company during the period of time (2010-2017). This issue was studied through a sample of oil fields in southern Iraq in which the company operates within the first and second licensing contracts rounds and according to the circumstances and variables of the investment environment as it is. Although this investment often achieves high returns, it is also characterized by a high degree of risk and for the purpose of evaluating the impact of foreign direct investment on the market value of the company's stock prices for the period (2010-2017). The statistical scale (T-TEST) was used to indicate the significance of the correlation hypotheses. Between the return on investment as the independent variable and the market value as the dependent variable, and the use of the coefficient of determination (R2) that measures the effect of the independent variable (foreign direct investment) on the dependent variable (market value) and the F-Test to demonstrate acceptance or rejection of the hypothesis of the return on investing in the market value of the oil company, and if the company achieves a high return in foreign direct investment, the market value of it will be affected positively. The study was based on a set of goals, including determining the attractiveness of Iraq to foreign investments, especially the oil sector, and the study reached a number of conclusions, the most prominent of which is the existence of a strong inverse correlation between the return on investment and the market value of the company. And the existence of a slight impact of the return on investment on the market value of the company, and the study reached a number of recommendations, the most important of which is activating the investment climate through political stability and the clarity and stability of laws and legislation regulating investment, which is one of the most important factors affecting the investment decision.

The determinants of foreign direct investment: what about the potential of the Arab Maghreb countries?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hamdi Khalfaoui ◽  
Abdelkader Derbali
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Political Stability ◽  
The United States ◽  
Investment Risk ◽  
Content Type ◽  
Foreign Companies ◽  
Main Determinants ◽  
General Method Of Moments

Purpose The purpose of this paper is to elucidate the main determinants of foreign direct investment (FDI) in the case of the Arab Maghreb countries. Design/methodology/approach We employ a dynamic panel analysis using the General Method of Moments for a sample composed of 105 countries over the period 1985–2018. Findings We show that FDI stability, market size, higher education enrolment, quality of institutions, distance, sharing of common border, and bilateral investment and integration agreements are the main determinants of FDI location. These determinants are neither general. The potential for attracting FDI from AMU countries is poorly exploited. FDI to the AMU is lower than estimated stock. The observed FDI to potential FDI ratio does not exceed 87%. France and Spain are the main investors in the AMU region thanks to historical and cultural links. The FDI from the United States, Canada, Germany, Belgium, and Japan are below what is expected. Originality/value The contribution of this paper is observed on the examining oh the determinants of the FDI in the Arab Maghreb countries. Our study demonstrate that the political stability can decrease investment risk in these countries. The administrations correspondingly require expanding their rules and strategies with union demonstrations which were at the beginning of the departure and closing of several foreign companies.

scholarly journals Determinant of FDI Inflows in OIC Countries

2021 ◽  
Vol 4 (1) ◽  
Author(s):  
Tania Megasari ◽  
Samsubar Saleh
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rates ◽  
Direct Investment ◽  
Trade Openness ◽  
Political Stability ◽  
Fixed Effect Model ◽  
Fdi Inflows ◽  
Macroeconomic Variables ◽  
Effect Model

This study aims to analyze the determinants of foreign direct investment (FDI) in the Organization of Islamic Cooperation (OIC) country members for the period 2005 to 2018 The determinant variables of FDI are corruption, political stability and macroeconomic variables such as inflation, exchange rates, economic growth, and trade openness. Analysis used in the study  is the fixed effect model (FEM) of the OIC data panel.The results showed that economic growth and trade openness had a significant influence on foreign direct investment (FDI), while the effects of corruption, political stability, inflation and the exchange rate have no significant effect on foreign direct investment (FDI).

scholarly journals FEATURES OF GLOBAL INVESTMENT POLICY: MODERN TRENDS AND PROSPECTS

2019 ◽  
pp. 142-148
Author(s):  
Larisa Germanovna Chuvakhina
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
World Economy ◽  
International Investment ◽  
Investment Policy ◽  
Investment Promotion ◽  
The Us ◽  
The World

The article highlights the current problems of investments in the development of the world economy, when international investment needs are significantly high. The priority is given to the issues of investment resources for achieving the goals of sustainable development of the world economy. It has been stated that for creating the effective economic policy, the countries need to attract foreign investment. The current trends in the development of global market for foreign direct investment flows are examined. The flows of global foreign direct investment in 2017-2018 are analyzed. Special attention is given to the study of the US investment policy. The reduction in US investments into the Russian economy in terms of the sanctions policy against Russia is marked. The changes in the investment policy of the administration of D. Trump in terms of strengthening American protectionism are underlined. The issues of US-EU investment cooperation are considered. The role of the US Federal Reserve in regulating the activities of foreign companies in the US market is defined. The main decisions taken at the X World Investment Forum of the United Nations Conference on Trade and Development in October, 2018 are considered. The role of investment promotion agencies is defined as one of the tools to attract foreign investments into the country's economy. The decrease in the level of international investment and increased competition between countries for attracting foreign investment is stated. The study confirms that the investment attractiveness of the country, stability of the national financial system, and legal security of business play a decisive role in attracting foreign direct investment.

scholarly journals Linkages and spillover effects of South African foreign direct investment in Botswana and Kenya

2019 ◽  
Author(s):  
Felix Adamu Nandonde ◽  
Richard Adu-Gyamfi ◽  
TinayeSonto Mmusi ◽  
Herbert Wamalwa ◽  
Simplice A. Asongu ◽  
...  
Keyword(s):  
Foreign Direct Investment ◽  
South African ◽  
Direct Investment ◽  
Spillover Effects

China FDI Booms but Problems Persist for FIEs

2017 ◽  
Vol 18 (1) ◽  
pp. 70-100
Author(s):  
M. Foster ◽  
Choo Shin Tseng
Keyword(s):  
Foreign Direct Investment ◽  
Legal System ◽  
Direct Investment ◽  
Regulatory System ◽  
Chinese Diaspora ◽  
Chinese Firms ◽  
Regulatory Frameworks ◽  
China Market ◽  
Trade And Investment

China has become one of the major recipients of foreign direct investment since Chairman Deng determined in 1978 that China’s economic door should be opened, for both trade and investment. Despite the fact that there is now over thirty years of accumulated knowledge and experience of this new, open China market on which to draw, there are cases where it has proved difficult to deal with China as partners due to legal and regulatory frameworks operating in China. This is true not only for western-based, non-Chinese firms but also for firms from the Chinese diaspora. We examine a number of such problematic cases, seeking to understand the roots of the problems experienced by the foreign entities and what may be the solutions. All of the case firms experienced difficulties to some degree with the Chinese legal system, the regulatory system, or what might be called tacit regulation, where investing firms have difficulty with other firms such as suppliers who are not part of the legal, or quasi legal system, but have effects on the investors which seem to have the tacit support or approval of government. The experience of these case firms confirms the picture that it is hard for foreign directed entities to win legal or regulatory battles in China.

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