No / This paper evaluates the impact of openness on growth in different country groups using a panel of 79 countries over the period 1970-98. It distinguishes itself from many existing studies in three aspects: Firstly, both trade and FDI are included as measures of openness. Secondly, countries are classified into high-, middle- and low-income groups to compare the roles of trade and FDI in these groups. Thirdly, the possible problems of endogeneity and multicollinearity of trade and FDI are carefully dealt with in a panel data setting. The main findings are as follows. Total trade has a general positive impact on growth in all country groups, although the impact from imports is not significant in high-income countries. FDI has a positive impact on growth in high- and middle-income countries, but not in low-income countries. With the existing absorptive capabilities, low-income countries can benefit from both exports and imports, but not from FDI. These findings suggest that trade and FDI affect growth through different channels and under different conditions. The paper also discusses important policy implications.

This thesis complements current studies by focusing on developed OECD countries as they are the major sources and recipients of world FDI and current studies relating to developed countries using aggregate country FDI data are limited. This study empirically tests the determinants of FDI inflows and outflows and their relationship with economic growth using 2SLS simultaneous equations model between 1981 and 2008 for a sample of 20 developed OECD countries. The empirical findings suggest that FDI inflows do not contribute to economic growth in the host country and economic growth positively affects FDI inflows. In addition, trade openness and flexible employment protection legislation in the host country attract FDI inflows. In terms of FDI outflows, the results show that FDI outflows reduce economic growth in the home country, while economic growth in the home country increases FDI outflows. Moreover, high past level of outward FDI stock, trade openness, low labour cost and currency depreciation in the home country provide incentives for domestic firms to invest abroad. Therefore, this study does not support offering special incentives to foreign investors to attract FDI inflows or offering promotional policies to domestic firms to encourage FDI outflows. Instead, government should provide incentives for domestic investment and other sound policies to increase economic growth, which in itself provides a good environment to attract FDI inflows and to encourage FDI outflows. Keywords: FDI inflows, FDI outflows, two stage least squares simultaneous equations, economic growth, labour market flexibility.

<p>Bakgrund: En av de viktigaste förutsättningarna för att Bosnien och Hercegovina ska kunna åstadkomma en hållbar ekonomisk tillväxt, är att landet integreras i världsekonomin och skapar ett klimat som främjar utländska investeringar. Idag råder det hård konkurrens mellan länder när det gäller att attrahera utländska investerare, och det är upp till varje land att utveckla effektiva strategier för att kunna hantera konkurrensen.</p><p>Syfte: Syftet med studien är att undersöka vad Bosnien och Hercegovina gör för att attrahera utländska direktinvesteringar. Vidare är vårt syfte att studera vilka effekter landets aktiviteter har på utländska investerare.</p><p>Metod: För att uppnå syftet med uppsatsen används en metodtriangulering bestående av intervjuer med experter, en enkätundersökning av utländska företag i Bosnien och Hercegovina, en deltagande observation samt olika rapporter och andra skriftliga källor.</p><p>Resultat och slutsats: Undersökningen visar att Bosnien och Hercegovina har flera fördelar som kan erbjudas till utländska investerare, framförallt naturresurser, men även turismsektorn har potential att utvecklas. Den makroekonomiska stabiliteten upplevs även som mycket fördelaktig. För närvarande finns det däremot fler hinder än fördelar för utländska investerare. Samtliga intervjurespondenter påpekar att den svaga infrastrukturen och den dåliga imagen som landet har i världen, försvårar för utländska investeringar. Faktorer som upplevs som hinder för utländska investerare bottnar främst i det fattiga företagsklimatet och det otillräckliga stödet från regeringen och andra statliga institutioner. Vissa framsteg har gjorts i detta avseende, men för närvarande är det svårt att göra landet konkurrenskraftigt när det gäller att attrahera utländska investerare. Avsaknaden av ett generöst heltäckande incitamentsprogram gör det omöjligt att framhäva de fördelar som finns. Det geografiska läget kan inte utnyttjas med den undermåliga infrastrukturen och de skatteincitamenten som erbjuds får föga effekt när affärsklimatet upplevs som oattraktivt med krångliga regler och långa procedurer. Detta beror på att landets tillgångar inte är identifierade och att få resurser används för att utveckla effektiva strategier för att marknadsföra dem. Uppgiften att förbättra landets image blir därför svår med de förutsättningar som ges.</p> / <p>Background: To become an economically self-sustainable country Bosnia and Herzegovina needs to create the necessary conditions for an accelerated economic recovery, an integration in the world economy and to create a business environment that promotes FDI. Because of the hard competition among countries there is a need to enhance the capacity to attract FDI. Each country has to develop efficient strategies in order to be competitive.</p><p>Purpose: The purpose of this essay is to examine what Bosnia and Herzegovina does to attract FDI and to identify those factors that are important in determining investment decisions and that influence the environment for conducting business in Bosnia and Herzegovina.</p><p>Method: In order to attain the purpose of the essay the authors have used a triangulation of methods consisting interviews with experts, a survey of companies that have made foreign investments in Bosnia and Herzegovina and a participant observation.</p><p>Results and Conclusions: The study identifies several available advantages for foreign investors in Bosnia and Herzegovina. There is a potential in industries based on natural resources, but there is also a potential for tourism. The macroeconomic stability is also seen as an advantage for the country. The results of the study also show that there are many obstacles for foreign investors. The interview respondents saw the undeveloped infrastructure and the bad image of the country as factors that aggravate the possibility to attract FDI into the country. The poor business environment and the weak support given from the government and other public institutions have been identified as those factors that mainly influence investment decisions negatively. Progresses have been made in Bosnia and Herzegovina, but not enough to be strongly competitive when it comes to attracting FDI. The lack of a general incentive program makes it difficult to emphasise the existing advantages. The weak infrastructure makes it hard to promote the favourable geographic position, and the tax incentives that are offered can hardly be used to attract FDI, because of the unattractive business climate with long administrative procedures. The assets in Bosnia and Herzegovina have not been recognized and there is no general strategy to promote them. Because of these conditions it’s difficult to improve the image of the country.</p>

Bakgrund: En av de viktigaste förutsättningarna för att Bosnien och Hercegovina ska kunna åstadkomma en hållbar ekonomisk tillväxt, är att landet integreras i världsekonomin och skapar ett klimat som främjar utländska investeringar. Idag råder det hård konkurrens mellan länder när det gäller att attrahera utländska investerare, och det är upp till varje land att utveckla effektiva strategier för att kunna hantera konkurrensen. Syfte: Syftet med studien är att undersöka vad Bosnien och Hercegovina gör för att attrahera utländska direktinvesteringar. Vidare är vårt syfte att studera vilka effekter landets aktiviteter har på utländska investerare. Metod: För att uppnå syftet med uppsatsen används en metodtriangulering bestående av intervjuer med experter, en enkätundersökning av utländska företag i Bosnien och Hercegovina, en deltagande observation samt olika rapporter och andra skriftliga källor. Resultat och slutsats: Undersökningen visar att Bosnien och Hercegovina har flera fördelar som kan erbjudas till utländska investerare, framförallt naturresurser, men även turismsektorn har potential att utvecklas. Den makroekonomiska stabiliteten upplevs även som mycket fördelaktig. För närvarande finns det däremot fler hinder än fördelar för utländska investerare. Samtliga intervjurespondenter påpekar att den svaga infrastrukturen och den dåliga imagen som landet har i världen, försvårar för utländska investeringar. Faktorer som upplevs som hinder för utländska investerare bottnar främst i det fattiga företagsklimatet och det otillräckliga stödet från regeringen och andra statliga institutioner. Vissa framsteg har gjorts i detta avseende, men för närvarande är det svårt att göra landet konkurrenskraftigt när det gäller att attrahera utländska investerare. Avsaknaden av ett generöst heltäckande incitamentsprogram gör det omöjligt att framhäva de fördelar som finns. Det geografiska läget kan inte utnyttjas med den undermåliga infrastrukturen och de skatteincitamenten som erbjuds får föga effekt när affärsklimatet upplevs som oattraktivt med krångliga regler och långa procedurer. Detta beror på att landets tillgångar inte är identifierade och att få resurser används för att utveckla effektiva strategier för att marknadsföra dem. Uppgiften att förbättra landets image blir därför svår med de förutsättningar som ges. / Background: To become an economically self-sustainable country Bosnia and Herzegovina needs to create the necessary conditions for an accelerated economic recovery, an integration in the world economy and to create a business environment that promotes FDI. Because of the hard competition among countries there is a need to enhance the capacity to attract FDI. Each country has to develop efficient strategies in order to be competitive. Purpose: The purpose of this essay is to examine what Bosnia and Herzegovina does to attract FDI and to identify those factors that are important in determining investment decisions and that influence the environment for conducting business in Bosnia and Herzegovina. Method: In order to attain the purpose of the essay the authors have used a triangulation of methods consisting interviews with experts, a survey of companies that have made foreign investments in Bosnia and Herzegovina and a participant observation. Results and Conclusions: The study identifies several available advantages for foreign investors in Bosnia and Herzegovina. There is a potential in industries based on natural resources, but there is also a potential for tourism. The macroeconomic stability is also seen as an advantage for the country. The results of the study also show that there are many obstacles for foreign investors. The interview respondents saw the undeveloped infrastructure and the bad image of the country as factors that aggravate the possibility to attract FDI into the country. The poor business environment and the weak support given from the government and other public institutions have been identified as those factors that mainly influence investment decisions negatively. Progresses have been made in Bosnia and Herzegovina, but not enough to be strongly competitive when it comes to attracting FDI. The lack of a general incentive program makes it difficult to emphasise the existing advantages. The weak infrastructure makes it hard to promote the favourable geographic position, and the tax incentives that are offered can hardly be used to attract FDI, because of the unattractive business climate with long administrative procedures. The assets in Bosnia and Herzegovina have not been recognized and there is no general strategy to promote them. Because of these conditions it’s difficult to improve the image of the country.

xii, 132 p. : ill. A print copy of this thesis is available through the UO Libraries. Search the library catalog for the location and call number. / Motivated by conflicting prior evidence for exchange rate effects on foreign direct investment (FDI), the first chapter of this dissertation explores theoretical evidence of the exchange rate effect on FDI in terms of different types of FDI. Based on a simple two-country model, I demonstrate that the profit function of a horizontal FDI investor is a decreasing function of the exchange rate, while the profit function for a vertical FDI investor is an increasing function of the exchange rate. This implies that a depreciation of a host country currency depresses horizontal FDI and promotes vertical FDI. Moreover, comparing the FDI investor's intertemporal profit in a simple two-period time frame, I lay out a theoretical basis for a relation between the effects of the exchange rate and the expectations of the exchange rate effect on different types of FDI. The second chapter of this dissertation examines the empirical evidence for the exchange rate effects on different types of FDI. Using cross-border mergers and acquisitions among 37 countries from 1985 to 2007, I measure horizontal and vertical FDI in 4 different ways, and constructing directional country pairs, I estimate the exchange rate effects on horizontal and vertical FDI by a Poisson and a negative binomial regression with fixed and random effects. The estimation results provide considerable support for the model's predictions of the first chapter. The third chapter of this dissertation extends the first and second chapters with an analysis of the effect of exchange rate expectations on different types of FDI. I examine 4 different measures of exchange rate expectations. Using a methodology similar to that in the second chapter, the estimation results suggest that the expected exchange rate effects on horizontal and vertical FDI are not very significant. However, the expectations of the exchange rate shed more light on the exchange rate effects on different types of FDI under all of the exchange rate expectation measures. This suggests that the exchange rate is a more influential determinant of the allocation of different types of FDI than the expected exchange rate. / Committee in charge: Bruce Blonigen, Chairperson, Economics; Jeremy Piger, Member, Economics; Stephen Haynes, Member, Economics; Neviana Petkova, Outside Member, Finance

This thesis complements current studies by focusing on developed OECD countries as they are the major sources and recipients of world FDI and current studies relating to developed countries using aggregate country FDI data are limited. This study empirically tests the determinants of FDI inflows and outflows and their relationship with economic growth using 2SLS simultaneous equations model between 1981 and 2008 for a sample of 20 developed OECD countries. The empirical findings suggest that FDI inflows do not contribute to economic growth in the host country and economic growth positively affects FDI inflows. In addition, trade openness and flexible employment protection legislation in the host country attract FDI inflows. In terms of FDI outflows, the results show that FDI outflows reduce economic growth in the home country, while economic growth in the home country increases FDI outflows. Moreover, high past level of outward FDI stock, trade openness, low labour cost and currency depreciation in the home country provide incentives for domestic firms to invest abroad. Therefore, this study does not support offering special incentives to foreign investors to attract FDI inflows or offering promotional policies to domestic firms to encourage FDI outflows. Instead, government should provide incentives for domestic investment and other sound policies to increase economic growth, which in itself provides a good environment to attract FDI inflows and to encourage FDI outflows. Keywords: FDI inflows, FDI outflows, two stage least squares simultaneous equations, economic growth, labour market flexibility.

This study investigates the major factors that have restricted the flow of foreign direct investment (FDI) into the oil sector in Libya. The study focuses on the period from 2000 to 2009. This period is significant since, during this time Libya witnessed dramatic foreign and economic policy changes. The research objectives are: (1) To identify the determinants of foreign direct investment into Libya’s oil industry for the period 2000-2009; (2) To reveal the obstacles and barriers which hinder FDI in Libya’s oil industry; (3) To determine the extent that the Libyan Government FDI policy influenced FDI in Libya’s oil industry. The rationale for this thesis was driven by filling an empirical void of FDI studies on the oil industry in Libya and by the intention of providing practical insights for current and future Libyan governments. This study comprises of an analysis of the 30 multinational (MNCs) oil companies that are operating in the Libyan oil industry through questionnaire and interview data from executives employed by those MNCs, as well as data from ten Libyan senior government officials involved in the Libyan oil industry and/or FDI policies. The research has provided support for several of the determinants of FDI flows traditionally found in the literature. The survey and time series analysis further reveals that access to Libya’s proven oil and gas reserves was the singular most important determinate for influencing the MNCs to undertake FDI. Furthermore, the findings identified that Libyan government foreign policy had some impact on the MNCs decision to undertake FDI. The research findings with regards to the role played by environmental risk as a determinate of FDI, demonstrate that there is no significant relationship between overall levels of environmental risk and a country‘s performance in attracting FDI. Also, this research has identified a number of factors that are causing obstacles and challenges to the attractiveness of Libya as a location for foreign investment. It has revealed that MNCs are significantly dissatisfied by the stability of the public institutions and the lack of effective regulations in Libya.

No / This chapter analyses the how, who, where and why of rapid rise in intra-regional investment by companies from ASEAN since 2009. The chapter analyses the push and pull factors of intra-regional investment in ASEAN, the resulting patterns of foreign direct investment (FDI) and the accompanying rise of strong regional players. The region’s FDI landscape is changing in terms of investment sources, players, FDI trends and dynamics of the region. This trend is strongly affected by stepped up efforts by ASEAN governments to encourage their national companies to invest in the region and the influence of the ASEAN Economic Community. Regional integration and emerging business opportunities are providing an impetus not seen before in driving intra-regional investment. As more ASEAN companies position and prepare for AEC 2015, this intra-regional investment wave is likely to gather force. The chapter lists the regional and global ‘footprint’ of the top 50 largest ASEAN companies by revenues. The thus identified companies include companies operating in oil and gas, mining, agri-business, telecommunications, food and beverages, manufacturing, banking, power generation, infrastructure, real estate and healthcare services.

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