Browsing by Subject "Foreign direct investment"
Now showing 1 - 7 of 7
Results Per Page
Sort Options
Item Analysis of Foreign Direct Investment and Economic Growth in Nepal(Department of Economic, 2018) Poudel, RoshanNot availableItem Foreign direct investment in Nepal: determinants and role in manufacturing sector(Faculty of Humanities and Social Sciences ,Economic, 2022) Dhungel, Bashu DevForeign direct investment (FDI) is a long-term commitment for investment in developing host countries like Nepal as the major sources of capital for investment, the transfer of advance technology, and knowledgeable management skills. However, Nepal has received a very small amount of FDI compared with other developing countries during the study period. Thus, this dissertation, on Foreign Direct Investment in Nepal: Determinants and Role in Manufacturing Sector, explores the major determinants of FDI inflows and its contribution to the manufacturing sector. The main objectives of this dissertation are to investigate the trends, growth, and sources of FDI flows into Nepal with the special focus on the postliberalization periods; to explore the causes of the gap between actual and proposed FDI inflows; to analyze the determinants of FDI inflows; and to examine the contribution of FDI to the manufacturing sector of Nepal. To achieve these objectives, primary data from 100 samples, as well as secondary data (1995/96-2017/18), has been collected. To address the first objective, committed and actual FDI data have been used to show trend, composition, and growth of FDI flows into Nepal. The research has found that the trend and growth of FDI flows into Nepal is inconsistent during the study period. The magnitude of FDI from China is maximum, followed by India during the study period. To achieve the second objective, principal component analysis has been used to abstract crucial factors causing the high discrepancy between actual and committed flows of FDI into Nepal. To check the significance level of these abstracted factors, one sample t test has been made. The results show that high inflation rate, high volume of debt, high volume of trade deficit, and corporate tax rate are the pivot elements discouraging the foreign investors from investing their capital even after commitments. Similarly, the prominent factors causing the gap between actual and committed FDI flows are the low performance of bureaucrats in their respective fields, bureaucrats’ corruptive attitudes, unnecessary complex process created by bureaucrats for foreign investors, poor research and development facilities, less development of transportation facilities, and policy complications to approve the FDI. To address the third objective, OLS regression has been employed to investigate the key determinants of FDI flows into Nepal. The regression analysis reveals that the availability of infrastructure, corporate tax rate, political stability, human capital, openness, consumer price index, gross domestic product, NEPSE index, broad money supply, and tertiary education enrollment, infrastructure, market size, human capital, country-risk factors, and financial variables are found to be major determinants of FDI. To meet the fourth objective, instrumental variables and two stage least squares method have been used to explore the contribution of FDI to the manufacturing sector. The finding shows that the FDI has made a positive and significant impact on the manufacturing GDP and generated employment opportunities in the manufacturing sector during the study period. Finally, this dissertation concludes that FDI is a source of investment for a developing country—as well as main drivers of employment, technological progress, productive improvement, and ultimately economic growth of the nation. In order to raise the inflows of FDI, therefore, policy makers should develop infrastructure, moderate corporate tax rates, control corruptive attitudes of bureaucrats, reform policy complications to approve the FDI, and further liberalize the policies for foreign investors.Item Foreign Direct Investment in Nepal: Determinants and Role in Manufacturing Sector(Department of Economics, 2022) Dhungel, Bashu DevForeign direct investment (FDI) is a long-term commitment for investment in developing host countries like Nepal as the major sources of capital for investment, the transfer of advance technology, and knowledgeable management skills. However, Nepal has received a very small amount of FDI compared with other developing countries during the study period. Thus, this dissertation, on Foreign Direct Investment in Nepal: Determinants and Role in Manufacturing Sector, explores the major determinants of FDI inflows and its contribution to the manufacturing sector. The main objectives of this dissertation are to investigate the trends, growth, and sources of FDI flows into Nepal with the special focus on the postliberalization periods; to explore the causes of the gap between actual and proposed FDI inflows; to analyze the determinants of FDI inflows; and to examine the contribution of FDI to the manufacturing sector of Nepal. To achieve these objectives, primary data from 100 samples, as well as secondary data (1995/96-2017/18), has been collected. To address the first objective, committed and actual FDI data have been used to show trend, composition, and growth of FDI flows into Nepal. The research has found that the trend and growth of FDI flows into Nepal is inconsistent during the study period. The magnitude of FDI from China is maximum, followed by India during the study period. To achieve the second objective, principal component analysis has been used to abstract crucial factors causing the high discrepancy between actual and committed flows of FDI into Nepal. To check the significance level of these abstracted factors, one sample t test has been made. The results show that high inflation rate, high volume of debt, high volume of trade deficit, and corporate tax rate are the pivot elements discouraging the foreign investors from investing their capital even after commitments. Similarly, the prominent factors causing the gap between actual and committed FDI flows are the low performance of bureaucrats in their respective fields, bureaucrats’ corruptive attitudes, unnecessary complex process created by bureaucrats for foreign investors, poor research and development facilities, less development of transportation facilities, and policy complications to approve the FDI. To address the third objective, OLS regression has been employed to investigate the key determinants of FDI flows into Nepal. The regression analysis reveals that the availability of infrastructure, corporate tax rate, political stability, human capital, openness, consumer price index, gross domestic product, NEPSE index, broad money supply, and tertiary education enrollment, infrastructure, market size, human capital, country-risk factors, and financial variables are found to be major determinants of FDI. To meet the fourth objective, instrumental variables and two stage least squares method have been used to explore the contribution of FDI to the manufacturing sector. The finding shows that the FDI has made a positive and significant impact on the manufacturing GDP and generated employment opportunities in the manufacturing sector during the study period. Finally, this dissertation concludes that FDI is a source of investment for a developing country—as well as main drivers of employment, technological progress, productive improvement, and ultimately economic growth of the nation. In order to raise the inflows of FDI, therefore, policy makers should develop infrastructure, moderate corporate tax rates, control corruptive attitudes of bureaucrats, reform policy complications to approve the FDI, and further liberalize the policies for foreign investors.Item Impact of exchange rate on foreign direct investment: A comparative study of Nepal, India and China(Department of Economics, 2024) Bhandari, Surya BahadurThis paper empirically investigates the impact of exchange rate volatility on FDI in Nepal, India and China respectively using time series data from 1990-2022. Data used in study is from secondary source specially from UNCTAD. It observed that the foreign direct investment in Nepal increased by 10.96 times in absolute terms, the FDI in India increased by 208.52 times in absolute terms whereas, the FDI in China increased by 54.24 times in absolute terms during the study period. The percentage of FDI inflows to GDP at current price range is - 0.10% to 0.54% in Nepal, 0.03% to 3.72% in India and 0.88% to 5.98% in China, during the study period. The exchange rate shows that, the 4.26 times decrease in value of Nepalese rupee in terms of US dollar, the 4.49 times decrease in value of Indian rupee in terms of US dollar and 1.41 times decrease in Chinas Yuan in term of US dollar during the study period. For the selection of the model’s lag duration, the Akaike information criteria (AIC) is employed. The Autoregressive Distributed Lag (ARDL) model is used to investigate the effects of exchange rate volatility on Foreign Direct Investment (FDI). The empirical results show that the estimated coefficient of nominal exchange rate volatility is negative in all the selected countries but significant only in India and China. In short, the currency volatility of the host country leads to decrease the FDI inflows into that country. Keywords: Foreign Direct Investment, Exchange rate, Currency VolatilityItem Relationship between Foreign Direct Investment and Economic Gorwth in Nepal(Department of Economics, 2023) Gharti, RamchandraNot availableItem Trend and Pattern of Foreign Direct Investment in Nepal (FY 1996/97-Fy 2016/17)(Faculty of Economics, 2019) Regmi, SujanForeign direct investment is an investment made by a company or individual who has an entity in one country, in the form of controlling ownership in business interests in another country. FDI could be in the form of either establishing business operations or by entering into joint ventures by mergers and acquisitions, building new facilities etc. Foreign Direct Investment plays a significant role in the process of economic development. Funds from foreign countries could be invested in shares, properties, ownership / management or collaboration. The study is related to the analysis of trend and patterns of FDI in Nepal(FY 1996-FY2016). The study shows that FDI to Nepal during FY 1996/97-FY2015/16 is Rs 190,803.6 millions. Likewise, FDI has covered an average of 0.632 percent in the total GDP of Nepal. Out of total FDI, actual FDI is Rs.76943.9 million which is 41.37% of the total approved FDI. The volume of FDI to Nepal is taking a pattern of increasing and decreasing throughout the study period. Nepal has been receiving FDI in the various sectors. Due to the political instability and policy bottlenecks, there was low amount of FDI whereas with respect to time and political stability as well as various policy interventions for investment friendly environment the volume of FDI has started a rapid accent from 2008 FY. Nepal has been receiving FDI in various sectors like energy sector, manufacture sector, service sector, tourism, mining, agro and forest based sectors as well as construction sectors. Out of these sectors energy as well as service sectors are really attracting foreign investors. While looking after industries on the basis of scale of investment, small scale industries have been receiving large amount of FDI compared to medium and large scale industries. There are huge numbers of employment opportunities in small scale industries particularly in service and tourism sector employing large number of Nepalese as well as foreigners. From this we can see that contribution of FDI to Nepal is vital for economic development of the country. The study attempts to see the impact of FDI on GDP and trade, export and import of Nepal. The impact of FDI on GDP and trade are found to be positive and significant. Using regression analysis, it is found that there is positive impact of FDI on GDP. From the regression analysis the value of R 2 is 0.522 implying that predictor FDI accounts 52.2 percent variation in the total GDP. The slope of FDI is 75.121 which imply that when FDI inflow increase by 1 million, GDP increases by 75.121millions. Similarly, there is positive correlation between FDI and trade. The value of R 2 is 0.567 implying that predictor FDI accounts 56.7 percent variation in the total trade. The slope of FDI is Rs 36.215 which imply that when FDI inflow increase by 1 million, trade increases by Rs 36.215 million. Likewise, the impact of FDI on export and import are found to be positive and significant. Using regression analysis, it is found that there is positive impact of FDI on export. The value of R vi 2 is 0.526 implying that predictor FDI accounts 52.6 percent variation in export. The slope of FDI is 2.072 which imply that when FDI inflow increase by Re.1 million, export increases by Rs.2.072 millions. Similarly, there is positive correlation between FDI and Import. The value of R 2 is 0.554 implying that predictor FDI accounts 55.4 percent variation in the total import. The slope of FDI is 34.143 which imply that when FDI inflow increase by Re.1 million, total import increases by Rs.34.143 millions. The amount of actual FDI is less compared to approved FDI due to the various reasons like political instability, legal uncertainties, policy hurdles, poor infrastructure, militancy of trade unions, etc. If such bottlenecks are solved then the amount actual FDI would be higher leading to the larger number of foreign investors not only for the market seeking but also resource seeking ones.Item Trend and structure of foreign direct investment in Nepal(Department of Economics, 2011) Subedi, NareshworNot available