Countries with high levels of growth-fostering business deregulation for domestic small and medium scale enterprises (SMEs) appear to attract more FDI inflows than countries with low levels of business deregulation. This may be because SMEs in such deregulated countries attract ample cross-border mergers and acquisitions (M&As), which are a major conduit of FDI inflows. This study therefore investigates the relationship between FDI inflow and business deregulation.
The study employs a triangulation of quantitative research methodologies and a panel data of 154 countries to analyze the relationship between FDI and deregulation.
Results from the study generally show that there are statistically significant and inversely proportional relationships between inbound FDI and the deregulation of: (i) starting a business, (ii) paying taxes, and (iii) export trading, by a country‘s domestic SMEs. The study also documents positive correlations between cross-border M&As and inbound FDI. Thus, countries are likely to attract more FDI inflows, especially through cross-border M&As, as they deregulate the: starting of businesses, payment of taxes and exportation of products for their domestic SMEs. Therefore, on policy front, it is recommended that in order to enhance FDI inflows, countries ought to deregulate these areas of infringement to efficient running of SMEs; this finding provides a complementary and/or substitute policy to the popular outward-looking incentive programs for attracting FDIs.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/12135 |
| Date | 17 October 2012 |
| Creators | Kitunzi, Mutunzi Ahmed |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | application/pdf |
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