The purpose of this project is to describe and explain the foreign investment decision process in the uncertain and turbulent environment of transition economy. By getting an in-depth understanding of how decision-making works in the environment of transition economy, the study intends to contribute to the development of business administration theory in the area of foreign investment decision-making, particularly its application in the turbulent and uncertain world. Theoretical ‘blocks’, elaborated on the basis of literature study, include the following concepts: the framework of transition economy; initial motivation (or reasons) of companies to make foreign direct investments (FDI); investigation of the investment climate and information collection methods; project evaluation and investment decision criteria; risk assessment factors and risk reduction measures. Transition economy is defined in the study as ‘a non-planned, non-market economy’ where the new emerging market institutions coexist with the bureaucracy and hierarchy inherited from the old administrative system. Investment projects, therefore, should probably be seen as being under institutional influence from both the local (i.e. transition economy) and the Western investor’s home country environments. The empirical data presented in the paper also shows that it is necessary to establish the relevant economic, legal, political and social institutions in order to attract FDI. The study further includes the analysis of the main components and features of transition economies and their influence on FDI decision-making. One of the results of the study is that FDI decision-making in transition economies is largely consistent with different theoretical approaches suggested in the literature. On the other hand, the empirical support obtained for different theoretical approaches is often questionable and opened to alternative interpretations. The presented project suggests that theoretical perspectives do not preclude each other, but rather have a complimentary character. The study attempts to contribute to the mainstream FDI theories through a firm-level approach based on the case studies. Two in-depth case studies are presented in the paper: Ericsson’s direct investments in Russia and Vattenfall’s investments in the Baltic countries. A formal questionnaire based on the parameters of theoretical ‘blocks’ was created and 25 top executives from Ericsson and Vattenfall who participated in FDI decision-making were surveyed. The empirical investigation took place during the period 1997 - 1998 with partial updating of the cases during the year 2000.  The study shows that where companies confront stable environments, investment decision routines and procedures will be less necessary and important than where market uncertainty is high. The strong appreciation of the local business partners for properly done investment calculations increases the importance of capital budgeting in transition economies more than in developed market economies. Besides, traditional investment appraisal methods provide managers with an ‘objective’ or ‘materialistic’ feedback for the decision-making in the rapidly changing uncertain environment. On the other hand, the study emphasises the importance of strategy over financial techniques and argues that FDI decisions in transition economies should be based on methods consistent with the company’s long-term objectives. In case of permanent changes, new approaches as well as better co-ordination of traditional techniques with strategic, political, historical, geographical and cultural issues are required. Ericsson’ s direct investments in Russia are presented in the paper in connection with other factors: the company’s historical involvement in Russia, marketing strategy, human resource development, privatisation and restructuring of the telecommunication sector in Russia, etc. Nordic Electric Power Co-operation (Nordel), the EU’ s decision in 1996 to create an internal electricity market in Europe, Baltic ring study, future plans to privatise the energy companies in the Baltic countries, etc., are the framework to present the second case. An application of project evaluation and risk assessment techniques for broader and more complicated environments shows that investment decision-making is probably as much, if not more, a social, political and cultural technology as an economic one. The study argues then that the rational choice decision-making model often co-exists with alternative models elaborated in social science - limited rationality, political and garbage can. According to the empirical data, the investment decisions are largely based on intuition, business experience and judgement, personal contacts with representatives from the local country, and these investment criteria are inevitable and acceptable in a situation of total chaos and permanent change. The right chosen partner, for example, is one of the major criteria for the success of the investment project in a transition economy. One of the outcomes of this study is that the revitalised form of investment decision-making will differ rather markedly from much of what has gone before: less emphasis on the quantitative aspects of capital budgeting, more on the qualitative aspects of companies and investment environment. The project also argues that determinants, approaches and criteria of investment activity in transition economies are largely consistent with patterns observed in other parts of the world. A few specific environmental conditions of transition economies, however, are shown in the study to affect the pattern of FDI decision-making. The level of turbulence is still different compared to the developed market economies due to uncertainties and unpredictibilities associated with environment of transition economies. Other major differences are the large power distance with authoritarian leadership, strong hierarchy and bureaucracy as well as the vital role of personal contacts in transition economies. It is not clear, however, if these features of transition economies should be seen as inherited from the past communist system or as an alternative way to organise the economic actors through networks, a way that is natural and appropriate for the majority of Asian societies.

ŠIMČIKAITĖ, Diana. (2010) Tiesioginių užsienio investicijų plėtra Lietuvoje. Magistro baigiamasis darbas. Kaunas: Vilniaus universiteto Kauno humanitarinis fakultetas. 99 p. SANTRAUKA RAKTINIAI ŽODŽIAI: tiesioginės užsienio investicijos, investicijas lemiantys veiksniai, TUI pritraukimas, mokestinės lengvatos, patrauklumo TUI indeksas. Dabartinėmis ekonominių procesų globalizacijos sąlygomis užsienio investicijų ir tarptautinio kapitalo judėjimo procesai daro vis didesnę įtaką tarptautinei prekių, paslaugų ir technologijų srautų kaitai. Pereinamosios ekonomikos šalims, tame tarpe ir Lietuvai, tiesioginės užsienio investicijos yra vienas svarbiausių ūkio plėtros veiksnių. Kadangi į Lietuvą investicijų pritraukiama nedaug, tai skatina analizuoti valstybės ekonominę politiką, skatinant tiesioginių užsienio investicijų atėjimą į šalį bei vertinti tiesioginių užsienio investicijų plėtrą lemiančius veiksnius. Darbo objektas- tiesioginių užsienio investicijų plėtrą lemiantys veiksniai. Darbo tikslas- išanalizavus tiesioginio investavimo procesus Lietuvoje, įvertinti tiesioginių užsienio investicijų plėtrą į Lietuvos ekonomiką lemiančius veiksnius. Darbo uždaviniai: atlikti tiesioginių užsienio investicijų sampratos teorinį nagrinėjimą, atlikti Lietuvos investicinės aplinkos SSGG analizę, atlikti Lietuvos ir kitų Baltijos valstybių palyginamąją analizę pagal tiesioginių užsienio investicijų plėtrą lemiančius veiksnius, atlikti ekspertų apklausą. Pirmoje dalyje nagrinėjama tiesioginių... [toliau žr. visą tekstą] / ŠIMČIKAITĖ, Diana. (2010) The development of Foreign Direct Investment ( FDI ) in Lithuania. MBA Graduation Paper. Kaunas: Kaunas Faculty of Humanities, Vilnius University.99 p. SUMMARY KEYWORDS: foreign direct investments, factors causing foreign direct investment, attracting FDI, taxing exemption, index of FDI attractiveness. In global economy fireign capital flows process influence international items, services and development of technologies. Foreign direct investments is one of the main factor for economic growth in all markets in transition and Lithuania also. On the whole, it’s just a small amount of foreign direct investments is attracting to Lithuania now. From the point of view effectiveness, Lithuania is after a lot of countries, that’s why it’s very important to analyse the main factors causing foreign direct investment. Object of the work: the main factors causing foreign direct investment. Aim of the work: evaluate the main factors causing foreign direct investment to Liethuania, after analysis of the foreign direct investing process. Tasks of teh work: to analise foreign direct investments composition, to accomplish Lithuania‘s investment environment SWOT analysis and comperative analysis of Lithuania and other Baltic states, to perform experts interrogation. First part, analyses foreign direct investments composition. Having in mind theories of capital movement and factors causing FDI flows to host economy, theoretical considerations of foreign direct... [to full text]

In this thesis we analyse a problem of the real economic adjustment between two countries, one of which is an emerging market and the other is a developed economy. When they form a monetary union the only possible adjustment to asymmetric shocks transmitted internationally is through the real variables. We take into account existing asymmetries in the foreign direct investment (FDI) intensity and FDI relations. The issues of FDI and differences in the FDI intensity are real aspects of functioning of economies and relations between them. They reveal some problem from the macroeconomic perspective. However, the problem relates also to microeconomic foundations. The given trade and FDI relations between countries depend on decisions of firms that are heterogeneous. To study the effect of plant delocalization and FDI on output fluctuations between two countries we use a framework that accounts for all this issues, that means dynamic stochastic general equilibrium (DSGE) models with heterogeneity in firm productivity. We add a new dimension to the existing literature on DSGE models with heterogeneous firms. First, we complete goods market with a new segment of production, namely products offered by multinationals which produce abroad and export back to their economy of origin. Second, we account for asymmetries in the FDI intensity and differences in production structures that occur between two economies forming a monetary union. Summing things up, the analysis allows us to state that the real aspects of economy functioning, such as trade connections between countries and differences in production structures, determine economic performance and behaviour of economies in terms of output fluctuations.

The effectiveness of South Africa's policy framework towards attracting FDI has been questionable. Determined to redress the instabilities created by the apartheid regime, the Government of National Unity (GNU) commissioned the Macroeconomic and Research Group (MERG), and charged it to devise appropriate policy reforms and intervention mechanism to address the shortcomings. This research critically interrogates the effectiveness of government's policy reforms towards attracting FDI, especially the impacts of the Reconstruction and Development Programme (RDP), the Growth, Employment and Redistribution (GEAR) initiative and the Accelerated and Shared Growth Initiative of South Africa (ASGISA). This research concludes that the policy determinants for inflow FDI have been self-defeating. Also, it was found that necessary reforms would have to be conducted to correct some of the shortcomings of the macroeconomic policies, as a way of creating an environment that is capable of attracting greenfield investments (FDI) to South Africa. / Business Management / M. Com. (Business Management)

This dissertation is divided into six chapters, as foHows: Chapter 1 of this dissertation discusses the growing significance of FDI for developing countries. It compares FDT in developed and developing countries and analyses recent evidence ofFDI flows to developing countries. Chapter 2 analyses the (endogenous and exogenous) detenninants ofFDI flows into developing countries. Chapter 3 discusses the importance of FDI flows, which are essential for new investments or for financing fortuitous deficits in host countries, and looks at the adjustment mechanisms for the equilibrium of the balance of payments. Chapter 4 gives attention to FDI flows, the liberalisation of financial markets and the financial account of the balance of payments in developing countries in providing more opportunities and mechanisms for development and economic growth. Finally, chapter S examines and compares FDI flows tu South Africa and Angola - the biggest FDI recipients on the African continent. / Economics / MCom (Economics)

Dans cette thèse, nous analysons la question de l’ajustement réel entre des économies de niveau de développement diffèrent au sein d’une union monétaire. Dans ce, les deux économies représentées – une économie développée et une économie émergente – ne peuvent utiliser le taux de change nominal pour s’ajuster à des chocs asymétriques. Pour étudier les conditions de l’ajustement réel entre ces pays, nous prenons en compte les flux d’investissements directs. En effet, ce type d’investissement a profité largement aux économies d’Europe de l’est non membres de le zone euro. Pour étudier cette question, nous utilisons un modèle DSGE (« dynamic stochastic general equilibrium ») permettant de micro fonder les décisions d’investissement direct sur l’hétérogénéité productive des firmes. Nous complétons la littérature existante dans ce domaine en privilégiant deux aspects : (1) les investissements directs peuvent être à la fois des substituts aux importations ou une solution retenue par les firmes pour réduire leurs coûts de production afin de réimporter des biens sur leur marché national et (2) les pays sont traités de manière asymétrique, afin de relier leur niveau de développement aux types de variétiés de biens (non échangeables, exportables, délocalisables). Nous évaluons de quelle manière ces éléments affectent la dynamique des économies à un choc de productivité asymétrique. De manière générale, on observe que les économies vont répondre de manière différente au niveau macroéconomique en fonction de leur structure productive. En résumé l’analyse proposée dans cette thèse montre que des différences structurelles et la possibilité pour les pays de s’engager dans des investissements directs détermine de manière critique la réaction des variables macroéconomiques à des chocs asymétriques. / In this thesis we analyse a problem of the real economic adjustment between two countries, one of which is an emerging market and the other is a developed economy. When they form a monetary union the only possible adjustment to asymmetric shocks transmitted internationally is through the real variables. We take into account existing asymmetries in the foreign direct investment (FDI) intensity and FDI relations. The issues of FDI and differences in the FDI intensity are real aspects of functioning of economies and relations between them. They reveal some problem from the macroeconomic perspective. However, the problem relates also to microeconomic foundations. The given trade and FDI relations between countries depend on decisions of firms that are heterogeneous. To study the effect of plant delocalization and FDI on output fluctuations between two countries we use a framework that accounts for all this issues, that means dynamic stochastic general equilibrium (DSGE) models with heterogeneity in firm productivity. We add a new dimension to the existing literature on DSGE models with heterogeneous firms. First, we complete goods market with a new segment of production, namely products offered by multinationals which produce abroad and export back to their economy of origin. Second, we account for asymmetries in the FDI intensity and differences in production structures that occur between two economies forming a monetary union. Summing things up, the analysis allows us to state that the real aspects of economy functioning, such as trade connections between countries and differences in production structures, determine economic performance and behaviour of economies in terms of output fluctuations.

This paper adopts a quantitative and qualitative lens, through which we explore the economic relationship between the region of Sub-Saharan Africa and China as a consequence of Chinese Foreign direct investments (FDI).  Primarily, the paper’s direction, analysis, and discussions are dictated by the usage of primary and secondary data. Our primary data is constructed as a panel data set including GDP for 38 countries alongside the Chinese FDIs for each country during the period 2003-2021. Our secondary data includes already existing papers on topics related to our purpose and the data found in them. The main points include the economic development of Sub-Saharan Africa, the subsequent enforced Chinese economic policy, and further the gains China see from their strides into the region. In order to prove our hypothesis and research questions we've used econometric models.The panel data was used to conduct several time series regressions, where we further used different models and tests to get the best possible result Due to the fact that our regression shows a significant and positive correlation between economic growth in the region as a result of Chinese FDI, we can establish that past research is reinforced. Through the used model we’re enabled to look at the individual effects of every country in the region. In addition, by comparing these effects with the level of corruption and which type of income group the countries belong to, we can further highlight the fact that China tends to invest in countries who can offer something in return. Examples of such cases could be South Africa and Angola who are two of the biggest receivers of Chinese FDI in the region, which we, throughout the paper, attribute to the fact that they have an abundance of natural resources.

Condition monitoring (CM) is widely used in industry, and there is a growing interest in applying CM on rail vehicle systems. Condition based maintenance has the possibility to increase system safety and availability while at the sametime reduce the total maintenance costs.This thesis investigates the feasibility of using condition monitoring of suspension element components, in this case dampers, in rail vehicles. There are different methods utilized to detect degradations, ranging from mathematicalmodelling of the system to pure "knowledge-based" methods, using only large amount of data to detect patterns on a larger scale. In this thesis the latter approach is explored, where acceleration signals are evaluated on severalplaces on the axleboxes, bogieframes and the carbody of a rail vehicle simulation model. These signals are picked close to the dampers that are monitored in this study, and frequency response functions (FRF) are computed between axleboxes and bogieframes as well as between bogieframes and carbody. The idea is that the FRF will change as the condition of the dampers change, and thus act as indicators of faults. The FRF are then fed to different classificationalgorithms, that are trained and tested to distinguish between the different damper faults.This thesis further investigates which classification algorithm shows promising results for the problem, and which algorithm performs best in terms of classification accuracy as well as two other measures. Another aspect explored is thepossibility to apply dimensionality reduction to the extracted indicators (features). This thesis is also looking into how the three performance measures used are affected by typical varying operational conditions for a rail vehicle,such as varying excitation and carbody mass. The Linear Support Vector Machine classifier using the whole feature space, and the Linear Discriminant Analysis classifier combined with Principal Component Analysis dimensionality reduction on the feature space both show promising results for the taskof correctly classifying upcoming damper degradations. / Tillståndsövervakning används brett inom industrin och det finns ett ökat intresse för att applicera tillståndsövervakning inom spårfordons olika system. Tillståndsbaserat underhåll kan potentiellt öka ett systems säkerhet och tillgänglighetsamtidigt som det kan minska de totala underhållskostnaderna.Detta examensarbete undersöker möjligheten att applicera tillståndsövervakning av komponenter i fjädringssystem, i detta fall dämpare, hos spårfordon. Det finns olika metoder för att upptäcka försämringar i komponenternas skick, från matematisk modellering av systemet till mer ”kunskaps-baserade” metodersom endast använder stora mängder data för att upptäcka mönster i en större skala. I detta arbete utforskas den sistnämnda metoden, där accelerationssignaler inhämtas från axelboxar, boggieramar samt vagnskorg från en simuleringsmodellav ett spårfordon. Dessa signaler är extraherade nära de dämpare som övervakas, och används för att beräkna frekvenssvarsfunktioner mellan axelboxar och boggieramar, samt mellan boggieramar och vagnskorg. Tanken är att frekvenssvarsfunktionerna förändras när dämparnas skick förändras ochpå så sätt fungera som indikatorer av dämparnas skick. Frekvenssvarsfunktionerna används sedan för att träna och testa olika klassificeringsalgoritmer för att kunna urskilja olika dämparfel.Detta arbete undersöker vidare vilka klassificeringsalgoritmer som visar lovande resultat för detta problem, och vilka av dessa som presterar bäst med avseende på noggrannheten i prediktionerna, samt två andra mått på algoritmernasprestanda. En annan aspekt som undersöks är möjligheten att applicera dimensionalitetsminskning på de extraherade indikatorerna. Detta arbete undersöker också hur de tre prestandamåtten som används påverkas av typiska förändringar i driftsförhållanden för ett spårfordon såsom varierande exciteringfrån spåret och vagnkorgsmassa. Resultaten visar lovande prestanda för klassificeringsalgoritmen ”Linear Support Vector Machine” som använder hela rymden med felindikatorer, samt algoritmen ”Linear Discriminant Analysis” i kombination med ”Principal Component Analysis” dimensionalitetsreducering.

South Africa is in need of foreign direct investment (FDI) to increase economic growth and alleviate unemployment and poverty. To succeed in obtaining this FDI, South Africa must compete with the rest of the world for the available FDI. The global economic outlook is currently still uncertain and the growth of advanced economies are slowing down while Asia and Sub-Saharan Africa continue to grow at a steady pace. South Africa, as part of Sub-Saharan Africa, should take advantage of this growth on the African continent as well as internationally. Although studies have been performed to ascertain the tax policies of countries, the role of taxation applied by countries and the effects of taxation on FDI, there have been few studies on the tax policies specifically in respect of withholding taxes on interest. The new South African withholding tax on interest, applicable to South African source interest payments to non-residents, has been proposed to be included in terms of sections 49A to 49H in the Income Tax Act (58 of 1962) and will become effective from 1 January 2015. These sections have been introduced to align the said withholding tax and the section 10(1)(h) interest exemption, applicable to normal income tax in respect of non-residents, to the withholding taxes on interest and interest exemptions applied globally. Attention should be focused on whether the aforementioned global alignment will be achieved with the introduction of this legislation as South Africa had previously applied a similar legislation called non-residents’ tax on interest (NRTI) which appeared to be unsuccessful. Determining whether this legislation has been aligned with global practice will provide useful insight into whether this new legislation will promote, stagnate or be indifferent to FDI in South Africa, while at the same time not eroding the tax base with overly generous exemptions. This study reviews and compares the taxes implemented globally specifically in relation to withholding taxes on interest in a selection of countries, namely the developing countries Brazil, Russia, India, China, Mozambique and Namibia and the developed countries Germany and Denmark. Other determinants which will also have an impact on the comparisons of these withholding taxes are, for example, normal and withholding tax interest exemptions and repo rates – all of which have been incorporated into this comparative study. Based on the literature reviewed and the comparative analysis, the study concludes that the South African withholding tax on interest is effectively designed to keep attracting foreign lending in order to remain competitive in international markets. It is further shown that the South African legislation in respect of the section 10(1)(h) blanket interest exemption is aligned to that of global practice. / MCom (South African and International Taxation), North-West University, Potchefstroom Campus, 2014

South Africa is in need of foreign direct investment (FDI) to increase economic growth and alleviate unemployment and poverty. To succeed in obtaining this FDI, South Africa must compete with the rest of the world for the available FDI. The global economic outlook is currently still uncertain and the growth of advanced economies are slowing down while Asia and Sub-Saharan Africa continue to grow at a steady pace. South Africa, as part of Sub-Saharan Africa, should take advantage of this growth on the African continent as well as internationally. Although studies have been performed to ascertain the tax policies of countries, the role of taxation applied by countries and the effects of taxation on FDI, there have been few studies on the tax policies specifically in respect of withholding taxes on interest. The new South African withholding tax on interest, applicable to South African source interest payments to non-residents, has been proposed to be included in terms of sections 49A to 49H in the Income Tax Act (58 of 1962) and will become effective from 1 January 2015. These sections have been introduced to align the said withholding tax and the section 10(1)(h) interest exemption, applicable to normal income tax in respect of non-residents, to the withholding taxes on interest and interest exemptions applied globally. Attention should be focused on whether the aforementioned global alignment will be achieved with the introduction of this legislation as South Africa had previously applied a similar legislation called non-residents’ tax on interest (NRTI) which appeared to be unsuccessful. Determining whether this legislation has been aligned with global practice will provide useful insight into whether this new legislation will promote, stagnate or be indifferent to FDI in South Africa, while at the same time not eroding the tax base with overly generous exemptions. This study reviews and compares the taxes implemented globally specifically in relation to withholding taxes on interest in a selection of countries, namely the developing countries Brazil, Russia, India, China, Mozambique and Namibia and the developed countries Germany and Denmark. Other determinants which will also have an impact on the comparisons of these withholding taxes are, for example, normal and withholding tax interest exemptions and repo rates – all of which have been incorporated into this comparative study. Based on the literature reviewed and the comparative analysis, the study concludes that the South African withholding tax on interest is effectively designed to keep attracting foreign lending in order to remain competitive in international markets. It is further shown that the South African legislation in respect of the section 10(1)(h) blanket interest exemption is aligned to that of global practice. / MCom (South African and International Taxation), North-West University, Potchefstroom Campus, 2014