The purpose of this thesis is to analyse if there are any changes in the inflow of Foreign Direct Investments before, during and after a currency crisis. The thesis is based on a theoretical framework and has an empirical part, which use a regression equation. The theoretical framework presents a foundation of the incentives to mak FDI investments and the implications for a host country. Together with the possible link to the level of the real exchange rate in the host country, this thesis, based partly on previous paper written on the subject, presents a regression equation for an empirical analysis. The regression equation is based on a hypothesis about the changes in FDI inflow before, during and after the occurrence of a currency crisis in the host country. The empirical analysis presents different results concerning the link between FDI and a currency crisis. The hypothesis stated in the thesis is that a currency crisis influences FDI inflows. This hypothesis is rejected. Moreover, a currency crisis can have both positive and negative effects on the inflow of FDI for the selected countries. Results find further no similarities in regions or year of occurrence of the currency crises. The depth, length and structure of each currency crisis together with using the right definition of a currency crisis are two important factors relating to the outcomes in this study.

This paper analyses how corruption in a host country affects the amount of Foreign Direct Investment (FDI) it receives. It discusses a model in which FDI is explained by GDP, corruption and the distance between the host country and the origin of capital. It then runs a regression comparing FDI from developed to 46 developing countries, which shows that corruption is a significant variable and it does have a negative effect on total FDI. It then compares if there are any difference depending on the origin of Capital, comparing USA, Europe and Japan. Capital from USA is the most sensitive to corruption. It also shows that capital from Europe is the least responsive to distance, as a factor of explaining FDI. The paper also runs a base mark estimation of what could be expected if corruption levels changed. We can see that if Dominican Republic would have reduced the level of corruption to that of Uruguay, it could have increased the average FDI per year, from 0,8% of GDP to 1,4%. If Argentina, who has a higher FDI over GDP than expected given its level of corruption, would have reduced its level of corruption to the level of Chile, it could have increased the FDI over GDP from 2% to 3,6%. The implications of the results of this paper are that public policies should aim to reduce corruption levels because they have a negative effect on FDI and on the living standard.

This thesis examines Canadian FDI (foreign direct investment) in China from 1978 to 2006 in the context of globalization and with a focus on the challenges faced by Canadian firms when doing business in China. Building on John Dunning's 'eclectic model' of FDI and Kobrin’s ‘bargaining’ approach, this study explores the relative importance of home country (Canadian) and host country (Chinese) factors in explaining outcomes for Canadian firms in China in the mining, manufacturing and service sectors. Using interview data collected from Canadian high-level management personnel working in these sectors during 2005 the study argues that it has been largely the host country factors that have been at work in causing difficulties for Canadian companies in China. These include issues such as Chinese government regulations and institutions, cultural differences between Canada and China, as well as market and business environment impediments in China. On the other hand, home country factors, particularly the small size of Canadian firms in China, have also played an important part in affecting the operations of Canadian firms there. The empirical analysis of the mining, manufacturing and service sectors revealed that Canadian firms in China are not a homogenous group and their experience and challenges can only be understood in the context of the particular sector that they are engaged in. In particular, Canadian firms in the mining sector have been more subject to pressures from the Chinese state, while firms in the manufacturing sector have been subject more to factors surrounding the Chinese market and business environment. Firms in the service sector have fallen in between, and have been subject to both factors such as state regulation and local market and business conditions. The survey analysis of some Canadian successful firms in China also suggests that the fate of Canadian firms does not hinge solely on cultural dynamics associated with either home or host country or regulatory issues, but also on the very real efforts that individual companies make to understand local conditions, and to become accustomed and to prosper in China.

A widely respected consultancy firm predicts that the amount of FDI (Foreign Direct Investment) into the petrochemical sector in China will reach USD 30 billion between 2000 and 2005. If we consider the huge investments in China announced by several renowned petrochemical MNCs (multinationals) such as BP, Exxon Mobil and Shell, we can quickly conclude that the chemical market in China has become one of the most attractive for investments. In a similar way, Company X has also followed this trend and increased its investment more than 250 Million USD in China. An interesting question arises, namely, why is China able to attract such huge investments from so many well-known MNCs including Company X ? What kind of operation risks are entailed when entering this attractive market still under communist rule? Further, why by contrast, is there so much less investment by this multinational company X in Taiwan ? My research has two objectives which can be summarized as follows : • To verify if the entry mode chosen by Company X accords with the academic theory about which I have learned in the IEMBA course. • To provide some clues about the entry modes for new entrants who are interested in investing in the chemical market either in Taiwan or in China. In principle, companies who want to go international can choose from a wide range of alternatives when deciding how to participate markets in the world. Firms use basically six different modes to enter foreign markets: (1) exporting, (2) turnkey projects, (3) licensing, (4) franchising, (5) establishing joint ventures with a host country firm and (6) setting up a whole owned subsidiary in the host country. Each entry mode is accompanied with respective advantages and disadvantages of which has to be evaluated by the concerned company to meet its needs in a specific business/ market environment. Traditionally, it has been usually the core competence and the extent of market openness for MNCs to drive the choices of entry mode into a new market. Key words: Entry Modes, Multinationals, Foreign Direct Investment

<p>The purpose of this thesis is to analyse if there are any changes in the inflow of Foreign Direct Investments before, during and after a currency crisis. The thesis is based on a theoretical framework and has an empirical part, which use a regression equation.</p><p>The theoretical framework presents a foundation of the incentives to mak FDI investments and the implications for a host country. Together with the possible link to the level of the real exchange rate in the host country, this thesis, based partly on previous paper written on the subject, presents a regression equation for an empirical analysis. The regression equation is based on a hypothesis about the changes in FDI inflow before, during and after the occurrence of a currency crisis in the host country.</p><p>The empirical analysis presents different results concerning the link between FDI and a currency crisis. The hypothesis stated in the thesis is that a currency crisis influences FDI inflows. This hypothesis is rejected. Moreover, a currency crisis can have both positive and negative effects on the inflow of FDI for the selected countries.</p><p>Results find further no similarities in regions or year of occurrence of the currency crises. The depth, length and structure of each currency crisis together with using the right definition of a currency crisis are two important factors relating to the outcomes in this study.</p>

Abstract The ability to absorb and use effectively FDI flows by countries to enhance their national productive systems is directly related to the degree of functioning of an economy’s national innovation system. We develop a heuristic NSI-FDI framework that proposed three types of NSIs (well functioning/strong, relatively well functioning, and weak) in relation with three types of corresponding FDI outcomes (High-end, Medium or Average, and Low-end). We then selected both large and small developing economies -- China, India, South Africa, Ghana, Ethiopia, Tanzania, and Zambia with both different NSIs and FDI flows. The countries were differentiated with respect to core differences in the types of NSIs. Using descriptive data we analysed the nature of FDI flows and their impacts or outcomes in these countries and showed that the characteristics of the NSI in these countries largely shaped the flow and the impact of FDI on these economies.

This thesis examines Canadian FDI (foreign direct investment) in China from 1978 to 2006 in the context of globalization and with a focus on the challenges faced by Canadian firms when doing business in China. Building on John Dunning's 'eclectic model' of FDI and Kobrin’s ‘bargaining’ approach, this study explores the relative importance of home country (Canadian) and host country (Chinese) factors in explaining outcomes for Canadian firms in China in the mining, manufacturing and service sectors. Using interview data collected from Canadian high-level management personnel working in these sectors during 2005 the study argues that it has been largely the host country factors that have been at work in causing difficulties for Canadian companies in China. These include issues such as Chinese government regulations and institutions, cultural differences between Canada and China, as well as market and business environment impediments in China. On the other hand, home country factors, particularly the small size of Canadian firms in China, have also played an important part in affecting the operations of Canadian firms there. The empirical analysis of the mining, manufacturing and service sectors revealed that Canadian firms in China are not a homogenous group and their experience and challenges can only be understood in the context of the particular sector that they are engaged in. In particular, Canadian firms in the mining sector have been more subject to pressures from the Chinese state, while firms in the manufacturing sector have been subject more to factors surrounding the Chinese market and business environment. Firms in the service sector have fallen in between, and have been subject to both factors such as state regulation and local market and business conditions. The survey analysis of some Canadian successful firms in China also suggests that the fate of Canadian firms does not hinge solely on cultural dynamics associated with either home or host country or regulatory issues, but also on the very real efforts that individual companies make to understand local conditions, and to become accustomed and to prosper in China.

This thesis studies the efficient organisation of economic institutions. In the first chapter we analyse how foreign direct investment projects can generate spillovers through backward linkages. An investment project can generate such spillovers if local competitors in the project's own industry can benefit from the upstream efficiency improvements that were induced by the entry of the foreign firm. The existence of the spillover effect depends crucially on the supplier arrangement that is chosen by the foreign firm. The foreign firm could avoid the spillover effect by producing the input itself or by contracting with only a small number of local suppliers. We use an incomplete contract framework to study the conditions under which the foreign firm optimally chooses a supplier arrangement that generates spillovers to the local industry. In the second chapter we study an incomplete contract model in which a buyer and a seller first agree on an efficient ownership structure and then bargain over the price of an input. We allow for asymmetric information at the ex post bargaining stage. The ownership structure that the agents agree on ex ante determines the payoff that each of them can realise before reaching agreement ex post. We show that an ownership structure that lowers the parties' joint pre-agreement payoffs accelerates ex post decision making but also makes delay in decision making more costly. We derive the ownership distribution that minimises the ex post bargaining inefficiencies. In the third chapter we compare the efficiency of private and public provision of contract enforcement services. We show that self-interested agents with coercive power may have an incentive to use this power to enforce contracts between third parties. However, such agents also engage in extortion. We analyse how social welfare depends on the number of self-interested agents with coercive power and whether such agents face democratic elections.

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The economy of Saudi Arabia is rich in oil. It is the world’s leading oil exporter and a prominent member of the Organization of Petroleum Exporting Countries (OPEC), and a country which embraces Foreign Direct Investment (FDI). FDI is core to increasing the capital and the economic wealth of a country. It is a platform for innovative technologies, advanced management practices, investment, and for the development of an unrestricted market for generating goods and services. Host nations struggle to attract FDI because of the difficulty in recognising FDI drivers that shape FDI inflows. This study identifies significant drivers that influence financial services. These are market drivers, economic drivers, infrastructure drivers and political drivers. Noticeably, previous studies have failed to discuss the complexity of these drivers’ effectiveness in terms of a particular business and a particular country. The objective of this study, therefore, is to analyse the effect of different FDI drivers on FDI inflows with regard to Saudi financial services. This study finds that market drivers are the most effective FDI drivers in terms of Saudi financial services, followed by economic and political drivers. This study supports the findings of previous studies that suggest that infrastructure drivers are not effective in terms of FDI inflows with regard to Saudi financial services.