In capital-scarce low income economies, FDI is seen as a stable and important source of financing for developing economies. FDI is therefore expected to generate effects on the country's economic growth potential. However, despite the long history of FDI, it was only after 1990 that Sub-Saharan African countries experienced vast increase in FDI inflows into the region. Evidence of effectiveness of such flows has remained debateable, particularly with the dominance of cross-country studies in such enquiry. With yet no existing country study for Namibia, this research investigates the relationship between FDI and economic growth in the country and the determinants of FDI flows to Namibia. The methodologies adopted in this study are mainly based on co-integration analysis. In order to investigate the impact of FDI on economic growth we employ co-integration tests and estimate both long-run effects and short-run dynamics using the autoregressive distributed lag (ARDL) model. The study also extends co-integration testing by applying the asymmetric (ARDL) model to test for asymmetry. The standard co-integration tests are also appropriately used to investigate the macroeconomic determinants of FDI flows to Namibia. Appropriate econometric procedure has also been employed to examine the sector level FDI and economic growth using a dynamic ordinary least squares (DOLS) model and mean-group (MG) estimation, to consider for the assumptions of both a homogeneity and heterogeneity case across units. Arising from a pluralistic analytical framework involving a triangulation of econometric estimation approaches, the study finds that FDI in Namibia is significant in promoting economic growth in the country. In terms of the impact on growth, the results show a positive relationship between FDI and economic growth. They also indicate that FDI consistently exerts a positive impact on growth when we incorporate trade openness, inflation and gross fixed capital formation in the analysis. This proves that these variables are indeed important in explaining economic growth in the long-run in the country and its development. With respect to the analysis, the study extended upon the linear framework to allow for the detection of asymmetric effects both in the short and long-run, as not to limit the study to the assumption of a linear paradigm only. The results show no evidence of asymmetric pattern in the relationship between FDI and economic growth. Meaning, the responsiveness of economic growth to FDI flow variations is linear. In terms of the macroeconomic determinant of FDI in Namibia the study finds that the potential market size, interest rates, initial level of income, labour force, the provision of infrastructural facilities and inflation are important determinants of FDI into the country. Although openness is found to be positive it is insignificant in determining FDI to Namibia. This could possibly act as a deterrent and as such the institutional set up's for the export and investment promotion services need a criterion for a successful export and investment support function in order to increase FDI inflows into the country and remove such factors that could inhibit such flows. In terms of sector specific FDI and economic growth the results show a co-integrating relationship. Therefore, there is long run relationship in conformity with the study hypothesis. Accounting for causality the study finds feedback effects between FDI and economic growth both in the short and long-run. Furthermore, the study also finds that FDI to Namibia is not only resource seeking but that Namibia has seen an increase in market-seeking and efficiency seeking foreign investors. As such, differentiated efforts towards attracting different forms of FDI flows to varied sectors are crucial if the economic significance of FDI is to be improved in Namibia.

This report examines the role of FDI in economic growth in Namibia using annual time series data from 1980 to 2012. The relationship was explored using the VAR framework, in particular, the Granger causality. Impulse response functions and forecast error variance techniques were used for analysis. The results show that there is a positive relationship between FDI and economic growth in Namibia. The study then concluded that Namibia need more investment in other sectors such as education taking into consideration that most foreign capital is directed into the mining and manufacturing sectors. However, Namibia does not have all the necessary skill to be able to sustain the growth in GDP as a result of FDI. The study further suggested that Namibia can take advantage of export-led growth because of the positive relationship that exists between growth and export. However, there is great need to improve and diversify by focusing on exporting semi-finished and finished manufactured products instead of solid minerals and primary products that are of low value. This will enhance competitive advantage on foreign markets.

This study has a twofold purpose. The first is to investigate the background and development of Japan's policy on the liberalization of international capital movements and the second is to explore the characteristics of Japanese economic nationalism. By the late 1960's Japan had succeeded in expanding her economy to the level of the economies in the European countries. Rapid increases in U.S. imports from Japan, which reflected Japanese economic expansion made U.S. enterprises realize that Japanese industry had become strong enough to decontrol foreign investment in Japan to a further extent than she had until then. But the Japanese thought that their industry was not developed enough to compete with multinational corporations because of the inherent vulnerability of Japanese enterprises and industries arising from the financial incapability of firms and excessive competition in major industries. Thus Japan has maintained a restrictive policy on foreign inward investment, with the principle that every Japanese industry should be controlled by nationals. In the course of her economic development, Japan proceeded with a five-year capital liberalization program from 1967 to 1971. Nevertheless, Japan's economic policy on foreign investment remains more restrictive than those of Western developed countries. Japanese policy is significantly affected by feelings of economic nationalism rather than considerations of economic welfare. In this paper a model of economic ethnocentrism is formulated with the purpose of explaining the characteristics of economic nationalism in Japan. Japan possesses unique social, cultural and political conditions which have lasted for a long time. These unique traditional traits of Japanese society remain influential enough that Japan's industrial organization, formal and informal, is able to be distinguished from that of Western countries. The basic attitudes of the Japanese towards foreign investment are derived from complex economic, socio-cultural and political conditions. This study attempts to synthesize several major factors which affect the Japanese attitudes which influence policies on foreign investment in Japan. / Business, Sauder School of / Graduate

This thesis comprises three essays on international business strategy with regards to services and technology. The first essay investigates why the average expense ratio paid by Canadian mutual fund investors is 50% higher than that paid in U.S. This discrepancy is commonly thought to exist because Canadian funds do not take advantage of economies of scale and have less competition. A monopolistic competition framework is used to develop a model for the mutual fund industry. By allowing each fund to have different attributes, the model permits funds to charge different expense ratios in equilibrium and is found to strongly fit the North American mutual fund market. Empirical analysis indicates that these two common explanations and measurable fund attributes account for 15% of the discrepancy. The second essay analyses the U.S. mutual fund decision to enter the Canadian market through either foreign direct investment (FDI) or trade in advisement services. The total value of U.S.-controlled funds amounts to 18% of the Canadian equity fund market. This paper investigates how the fund-level and firm-level characteristics affect the channel used to enter the Canadian market. Empirical results indicate that the funds offered through FDI are not especially successful in the U.S. market but are associated with companies with large market shares, whereas the funds offered through trade in advisement services are highly successful in the U.S. market and are from companies with relatively few successful funds. The third essay compares the motivation for acquisition between foreign and domestic acquirers of U.S. drug companies, especially with regard to technology transfer. An estimation of the acquisition decision reveals that foreign acquirers choose targets with high research intensity more as their own intensity decreases while domestic acquirers choose targets with high research intensity more as their own intensity increases. Domestic acquirers' post-acquisition innovative productivity increases mostly due to efficiency of knowledge synthesis because the targets are usually have familiar product lines. Foreign acquirers' innovative productivity does not increase after acquisition because they tend to take over firms in unfamiliar research areas that are usually highly technical and require a long-term commitment of R&D. / Business, Sauder School of / Graduate

Offshore jurisdictions attempt to attract foreign capital to themselves by having lower financial regulatory requirements than other jurisdictions. By examining the literature and the latest data on financial flows, the thesis attempts to identify the sources of the powerful systematic causes and effects of Offshore. It does this by disaggregating elements of Offshore that are normally conflated. An eclectic theory based on elements of liberal international theory and world-system structuralism is constructed in order to clarify the role of Offshore in the international economy. The conclusions are that Offshore is an integral part of the current global economic system; that further research may reveal that Offshore serves hegemonic interests; that regulatory competition is likely to remain a part of the international economy for the foreseeable future; and that, by finding common interests among hegemons and others, the invidious Offshore element of secrecy has a serious chance of being curtailed so that systematic stability can be increased. / Arts, Faculty of / Political Science, Department of / Graduate

This thesis examines the challenges multinational enterprises face from political risk when making and operating foreign direct investments. The thesis considers political risk and a wide variety of approaches to its analysis and provides insight into the process of foreign direct investment, the nature of the political threat facing it, foreign investment decision making by multinationals, and the tools developed in the commercial, academic, and governmental arenas to avoid and combat the effects of political risk. In essence, the thesis addresses a business application of theories and methodologies used in political studies. The first hypothesis is: if political risk is properly understood as a phenomenon of the political environment, then it a) defies direct quantification and b) can be explained as a series of discrete elements which can be analyzed separately. The second hypothesis is: if political risk is properly understood as a series of non-quantifiable elements, analysis of political risk cannot be depended upon alone to protect multinational enterprises from political risk in foreign direct investment. The first hypothesis is addressed through a critical review and consideration of business and political risk literature. Two analytical tools are developed in this process: a ladder of cognition consisting of a series of conditions of knowledge which can be held regarding a specific risk, and indicating the type and approximate accuracy of analysis which can be undertaken of such risk; and a representation of the political risk equation as a two stage process consisting of an abstract (environmental) risk event and a discrete effect which the event may or may not have on a specific investment. The second hypothesis is addressed through a critical review of methods of political risk analysis including "qualitative" approaches with roots in traditional studies and "quantitative" approaches derived from statistical analysis and behavioralist-based determinism. Critiques of each approach include operational strengths and weaknesses, performance histories (when applicable), conceptual and practical capabilities from the perspective of the analytical tools described above, and theoretical strengths and weaknesses from the perspective of the political studies discipline. Both hypotheses are supported and the thesis concludes by reviewing tools which can be used by multinationals to manage and mitigate the effects of political risk and considering additional academic work in this arena which would be useful in developing this application of political studies.

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Thesis (MBA)--Stellenbosch University, 2005. / ENGLISH ABSTRACT: FOI has become a very important tool for the socio-economic development in developing countries. Three important factors need to exist before an investor will decide to invest in a foreign country. These factors are the presence of an ownership specific advantage, location advantages in the host country and superior commercial benefits for the investor. In order to detennine the host countries potential to attract FDI was it therefore important to analyse the second factor, which are the country specific advantages. The host country detenninants of UNCfAD and the ideal investment criteria of WAIPA have been combined in order to get a standardized framework for analysis and comparison. The starting point was therefore to analyse the availability of resources within these countries. In Botswana can we see that the diamond mining industry is the largest econOITllC contributor and in Tanzania do we find that their agricultural sector is the biggest economic contributor. In both instances do these countries have to import their oil, seeing that they are not producing their own petroleum products. Tanzania is exploring some opportunities with regard to oil reserves and also offers significant incentives for companies in this instance. In the case of Tanzania are the islands of Zanzibar a large tourist attraction and in Botswana does the Okavango delta offer a variety of tourist attractions. The potential of attracting FDI within these tourist industries is very large with regard to both countries. The domestic market in Tanzania is also much larger compared to that of Botswana and can offer the foreign investor with some great opportunities. Due to the small size of the domestic market in Botswana are they focusing more on export manufacturing and can we also see that their total exports are much larger than that of Tanzania. Exports under AGOA as a percentage of total exports to the US are currently almost double in Botswana compared to Tanzania. Through their membership to the SADe do both these countries have access to the European markets under the EU Free Trade Agreement. The European markets are also the largest markets for export in both cases. Efficiencies with reference to the banking system and physical infrastructure are also better in the case of Botswana. Botswana is rated as having one of the best banking systems in Africa. In order for Tanzania to improve trade within its region will it be important to upgrade their road and rail transport. The lack of skilled labour is a very big problem within both countries. The skill shortage is further worsened by the inefficiency of the education systems in order to address these problems. Electricity and' telecommunication is also very expensive in both countries, but can be addressed if the privatisation process within these sectors are speeded up. The biggest problem that both these countries face though is the significant impact that the HIV/AIDS virus is having and going to have on their current and future development. The tax laws in both these countries are very favorable and we can see that Tanzania and Botswana both have more attractive corporate tax rates than most of the other SADe states. Both countries are aiming at attracting FDI through export manufacturing and this is promoted through incentives such as duty· free imports of raw materials and special tax conceSSIOns. We can therefore see that both these countries have a lot of positive aspects, which will attract the foreign investor. The risk factor in combination with the negative factors will have to be weighed up against the positive factors, but in the end will it be the investor that has to decide which country 's characteristics suites its specific requirements best. / AFRIKAANSE OPSOMMING: Direkte Buitelandse Belegging het 'n belangrike broan geword vir die sosio-ekonomiese ontwikkeling van ontwikkelende lande. Drie belangrike faktore is geidentifiseer wat teenwoordig moet wees alvorens so 'n buitelandse investering sal plaasvind, naamlik 'n eienaar spesifieke voordeel, tuisland liggingsvoordeel asook 'n besondere kommersieIe voordeel. Die liggingsvoordeel verwys na die spesifieke eienskappe van die gasheerland. Vir die doel van hierdie werkstuk wat is om te bepaal wat die potensiaal van die gasheerland is om buitelandse investering te lok, was dit dus belangrik om 'n reeks faktore te identifiseer wat gebruik kan word om as raamwerk van vergelyking te dien. Die gasheerland vereistes soos uiteengesit deur UNCTAD en die eienskappe van WAIPA is gekombineer om hierdie raamwerk te skep. Eerstens word daar dus gekyk na die natuurlike hulpbronne in hierdie twee lande. Nie een van die twee lande beskik oor olie hulpbronne nie en moet al hul olieverwante produktte invoer. Toerisme is 'n groot bron van inkomste en in die geval van Botswana speel die Okavango delta 'n groot roI. In Tanzania is die eilande van Zanzibar weer 'n groot toeriste aantrekking wat nog baie potensiaal vir ontwikkeling bied. Landbou in Tanzanie is die oorheersende ekonomiese aktiwiteit, waar die ontginning van diamante weer die grootse bydraende faktor tot die ekonomie van Botswana is. Tanzanie se plaaslike mark is ook baie groter as die van Botswana en het dus ook baie potensiaal vir ontwikkeling. A.g.v. Botswana se klein plaaslike mark word daar ook meer gefokus op uitvoer vervaardiging. Botswana vaar ook tans beter met die uitvoer van produkte na Amerika onder die AGOA wetgewing en totale uitvoere onder AGOA as persentasie van totale uitvoere na Amerika is bykans dubbel die van Tanzanie. Beide lande is lede van die SADC en geniet dan ook die voordele van die vrye handelsooreenkoms met die Europese Unie wat ook in beide gevalle die grootste uitvoermarkte van hierdie lande is. Onder die effektiwiteitseienskappe kan ons sien dat Tanzanie 'n drastiese verbetering aan hul pad en spoorvervoer netwerke moet aanbring om handel in hul streek te verbeter. Die hoe koste van elektrisiteit en telekommunikasie in beide lande is ook 'n bron tot kommer, maar kan beter aangespreek word indien die privatiseringsproses in hierdie sektore versnel word. Een van die grootste faktore wat ook dringende aandag in beide die lande sal moet geniet is die groot tekort aan 'n opgeleide werkerskorps. In beide gevalle sal die onderwysstelsels drastiese veranderings moet aanbring om hierdie probleem aan te spreek. Die rol wat HIV/VIGS speel m.b.t. lewenskwaliteit in hierdie lande is ook 'n bron van kommer wat die huidige en toekomstige ontwikkeling van hierdie lande gaan beinvloed. Korporatiewe belasting in beide lande is beter as in meeste van die ander SADC state. Die feit dat beide lande fokus op die uitvoervervaardigingsmark is daar baie goeie aansporingsinisiatiewe om die belegger te lok, soos bv. geen doeane tariewe op die invoer van rou produkte nie, in kombinasie met spesiale belasting toegewings. Dit is dus duidelik uit hierdie werkstuk dat elke land verskeie positiewe asook negatiewe aspekte het. Die uiteindelike keuse sal op die skouers van die belegger berus nadat aIle voor en nadele teen mekaar opgeweeg is oor watter land die beste aan sy spesifieke vereistes voldoen.