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Determinants of foreign direct investment | |
Author | Lin, Jia |
Call Number | AIT RSPR no. IE-87-11 |
Subject(s) | Investments, Foreign |
Note | A research study report submitted in partial fulfillment of the requirements for the degree of Master of Engineering, School of Engineering and Technology |
Publisher | Asian Institute of Technology |
Abstract | Foreign direct investment is not just related to a firm ' s behavior , but also to the country ' s social formulation, economic development and technological level. With this macro picture in mind , this research deals with three aspects -- society, economy and technology to investigate the determinants of foreign direct investment . A social hypothesis considers the positive effects of openness and negative effects of taxes on the flow of direct investment. A market hypothesis suggests that the economic indices indicate the direction of direct investment movement. Large market , high market growth rate , high return on capital , shortage of capital and devaluation of currency will encourage the inflow of direct investment, while high inflation, current account deficit and expensive labor will discourage foreign investors. A technology hypothesis states that possession of advanced technology will be accompanied by a large amount of foreign direct investment. The theoretical considerations are tested by examining the historical performance of direct investment between the US and eight industrial countries. Empirical estimations show that market size, labor cost and technology level are major determinants of foreign investment and that openness, inflation , current account deficit and the exchange rate of the country may also have an impact on it. This study also suggests that the determinants of foreign direct investment between developed and developing countries are similar. |
Type | Research Study Project Report (RSPR) |
School | School of Engineering and Technology (SET) |
Department | Other Field of Studies (No Department) |
Academic Program/FoS | Industrial Engineering (IE) |
Chairperson(s) | Frausum, Yves G. Van |
Examination Committee(s) | Tang, John C.S. ;Tabucanon, Mario T. |
Scholarship Donor(s) | Government of Australia |
Degree | Research Studies Project Report (M. Eng.) - Asian Institute of Technology, 1987 |