Foreign direct investment, host government policy and development

2013 ◽  
Vol 12 (4) ◽  
pp. 131-143
Author(s):  
Padmanabh B

The online retail industry in India is expected to grow to Rs. 7000 crores by 2015. Its size in 2013 is Rs. 2500 crores. By 2014 India is expected to become the 3rd largest nation of Internet users and this would provide huge potential to the online retail Industry1.Among the major cities in India, consumers in Mumbai topped the chart in doing online shopping followed by Ahmedabad and Delhi2. As per Google study conducted in 2012, 51 percent of the traffic for its Great online shopping festival (GOSF) was due to customers from cities other than the four metros. Referring to the growth in online sales, Nitin Bawankule, industry director, e-commerce, online classifieds and media/entertainment at Google India said, “Top motivators for shopping online include cash back guarantee, cash on delivery, fast delivery, substantial discounts compared to retail, and access to branded products”3.  The E –commerce space in India has seen a lot of action and there are many online players like flipkart.com, Myntra.com, Fabmart, Indiaplaza and Indiatimesshopping. Amazon.com made an indirect entry through Junglee.com. The reason for this indirect entry is the result of government policy towards foreign direct investment.  The Government of India announced in September 2012 the revised foreign direct investment policy in retail. As per this announcement foreign investments are blocked in e-commerce sector while allowing 51 percent FDI in multi-brand retail stores and 100 percent FDI in single brand retail. Amazon has been eyeing the Indian E commerce market which is estimated around $2 billion4.


2015 ◽  
Vol 20 (4) ◽  
pp. 1051-1072
Author(s):  
Arusha Cooray

This study examines the influence of foreign direct investment (FDI), overseas development aid (ODA), and remittances on the enrollment of girls and boys in 103 countries over the years 1970–2011. The results suggest that remittances have a contemporaneous robust significant influence on enrollment, with the positive effect being slightly higher for girls than for boys. FDI and ODA have an influence on the enrollment of girls and boys only after a significant time lag. The results also suggest that the impact of remittances on enrollment is increased through income and a well-developed financial sector; FDI through better institutions and a well-developed financial sector; and ODA through better government policy.


Author(s):  
Damiana Simanjuntak

Investment will create a multiplier effect for the economy, especially investments from abroad which may also encourage the technology spillover and innovation process. Political risk and government investment policy are two factors considered by investors in investing. This research aimed to determine the effect of these two factors on foreign direct investment (FDI) in Indonesia. This research used data of FDI in Indonesia in 2010-2017, during which there were three changes in foreign direct investment policies in Indonesia and one political year. Using panel data analysis, this research found that government policy in revising the negative investment list had no significant effect on FDI flows in Indonesia. It can be seen that the sector effect experiencing a tightening of foreign asset ownership limitation on FDI was greater than the sector effect experiencing loosening of asset ownership limitation by foreign parties. In addition, this research found that political risk had no significant effect on FDI in Indonesia.Keywords: FDI, Politics, Policy.


2017 ◽  
Vol 9 (7) ◽  
pp. 222
Author(s):  
Haga Elimam

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.


2020 ◽  
pp. 11-11
Author(s):  
Rafael Espinosa-Ramirez

Corruption impacts the competitive conditions among firms and the flow of foreign investment. Institutional reforms made for fighting against corruption are sometimes useless. We develop a model in which a corrupted government tries to set an optimal institutional level taking into account the cost of this policy on foreign investment, the benefit of a corrupted domestic firm and the benefit of local citizens. A political contribution is made by a corrupted lobby group in order to benefit from a lower institutional level. Our results suggest that the optimal institutional level depends on the degree of efficiency of firms and the level of corruption of the host government.


2017 ◽  
Vol 19 (02) ◽  
pp. 58-64
Author(s):  
K. M. Panditharathna ◽  
Dr. Lakmini V.K. Jayatilake

Author(s):  
Jon Edwards ◽  
Sarah Newton

According to UNCTAD, regulatory incentives, which include “lowering of environmental, health, safety or labor standards; temporary or permanent exemption from compliance with applicable standards; stabilization clauses guaranteeing that existing regulations will not be amended to the detriment of investors”, in addition to financial incentives, are considered “less important policy tools for attracting and benefiting from Foreign Direct Investment.” Whilst survey results, also illustrate that fiscal incentives are the most important type for attracting and benefiting from foreign investment, it is also highlighted that certain scenarios exist whereby investment incentives could be regarded as “compensation for information asymmetries between the investor and the host government, as well as for deficiencies in the investment climate, such as weak infrastructure, underdeveloped human resources.” This chapter not only explores how environmental incentives can serve as means of attracting investment, but also contributes to the literature on how their effectiveness could be enhanced.


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