(THE) IMPACT OF FOREIGN DIRECT INVESTMENT ON NEPAL'S ECONOMIC GROWTH

다국어 초록 (Multilingual Abstract)

The federal democratic republic of Nepal is among one of the land locked least developed country. Even though Nepal opened the market to foreign economy long time ago but still the foreign investment and economic transaction has been quiet less.
This paper has conducted a descriptive statistical analysis and an empirical analysis to establish the relationship between real gross domestic product and foreign direct investment stock. Using time series econometrics tests for the period 1980-2008, the empirical results indicate the existence of a long-run relationship between the determinants. Even though the relationships are positive the foreign investment has not been consistent through the years. That means definitely Nepal has lot of weakness to attract foreign investment. Some of the main reasons could be political instability, outdated foreign investment law, rigid labor regulation and poor physical infrastructure.

목차 (Table of Contents)

• CHAPTER 1 INTRODUCTION 1
• 1.1 General Background 1
• 1.2 Deficiencies in the studies 2
• 1.3 Purpose of the statement 3
• 1.4 Hypothesis and Research Question 3
• 1.5 Data Description, Methodology and Limitations 4
• CHAPTER 2 THEORETICAL FRAMEWORK 5
• 2.1 Concept of FDI 5
• 2.2 Types of FDI 6
• 2.2.1 Horizontal FDI 6
• 2.2.2 Vertical FDI 6
• 2.3 Different Forms of FDI 6
• 2.3.1 Greenfield Investment 6
• 2.3.2 Mergers and Acquisitions (M&As) 7
• 2.3.3 Joint Venture 7
• 2.4 Determinants of Foreign Direct Investment (FDI) 7
• 2.4.1 Market-seeking 7
• 2.4.2 Efficiency-seeking 8
• 2.4.3 Resource Seeking 8
• 2.4.4 Strategic asset seeking 8
• 2.5 FDI and economic growth 8
• 2.5.1 Size effects 9
• 2.5.2 Technology Effects 9
• 2.5.3 Employment Effects 9
• CHAPTER 3 NEPALS ECONOMIC STRUCTURE 11
• 3.1 An Overview of the Nepals Economy 11
• 3.1.1 The period of 1980s: 12
• 3.1.2 The period of 1990s: 12
• 3.1.3 The period of 2000-2008: 13
• 3.2 Gross Domestic Saving and Investment 13
• 3.3. Inflation 13
• 3.4. Trade and Balance of payments 14
• CHAPTER 4 ECOMOMIC IMPACT OF FDI IN NEPAL 16
• 4.1 An Overview of FDI in Nepal 16
• 4.2. Challenges of FDI in Nepal 19
• CHAPTER 5 EMPERICAL ANALYSIS 20
• 5.1 Real Gross Domestic product (GDP) 20
• 5.2 Foreign Direct Investment flows (FDI) 20
• 5.3 Estimation Results and its Interpretation 21
• 5.3.1 Test of stationarity 21
• 5.3.2 Co-integration test 23
• 5.3.3 Estimation result for Error-correction model 25
• CHAPTER 6 CONCLUSION, RECOMMENDATION AND LIMITATIONS 26
• REFERENCES 28
• APPENDIX 30