AN ASSESSMENT ON INFLOW OF FOREIGN DIRECT INVESTMENT IN NEPAL
AN ASSESSMENT ON INFLOW OF FOREIGN DIRECT INVESTMENT IN NEPAL Presented by: Babita Bhattarai Binod Sapkota Nepal has strong potential and viable areas for economic development such as agriculture, hydropower, tourism, biodiversity and traditional export to attract and mobilize the Foreign Direct Investment (FDI). This paper aims at making a systematic analysis of Foreign Direct Investment (FDI) and Nepal’s achievements both in terms of volume of FDI and its development impact on the economy and also focuses on strengths and weaknesses of FDI in Nepal.
1. Introduction:
FDI in general can be defined as an investment involving management and control of a resident entity in one economy by an enterprise resident in another economy. It consists of funds invested directly aboard from the headquarters of a Trans-National Company, reinvested earnings of a foreign affiliate, and funds borrowed by an affiliate from its parent.
Focusing investment level of parent company, the IMF broadly defines FDI as the establishment of, or acquisition of, substantial ownership in as enterprise in a foreign country; and in a narrow sense, as enterprises in which non-residents hold 25 percent or more of the voting share capital. Thus, it makes narrow down FDI only in capital investment of parent company in host country’s enterprise.
Examining the impact of FDI, the earliest empirical study, the International cooperation of National Firms: A study of Direct Foreign Investment, S.H Hymer broadly describes FDI as not simply a transfer of capital but the transfer of a package of capital, management and new technology. Thus the host countries can benefits from the inflow of FDI into capital, management and new technology. Therefore, FDI should be understood in the form of transfer of capital, management and new technology from
1. Introduction:
FDI in general can be defined as an investment involving management and control of a resident entity in one economy by an enterprise resident in another economy. It consists of funds invested directly aboard from the headquarters of a Trans-National Company, reinvested earnings of a foreign affiliate, and funds borrowed by an affiliate from its parent.
Focusing investment level of parent company, the IMF broadly defines FDI as the establishment of, or acquisition of, substantial ownership in as enterprise in a foreign country; and in a narrow sense, as enterprises in which non-residents hold 25 percent or more of the voting share capital. Thus, it makes narrow down FDI only in capital investment of parent company in host country’s enterprise.
Examining the impact of FDI, the earliest empirical study, the International cooperation of National Firms: A study of Direct Foreign Investment, S.H Hymer broadly describes FDI as not simply a transfer of capital but the transfer of a package of capital, management and new technology. Thus the host countries can benefits from the inflow of FDI into capital, management and new technology. Therefore, FDI should be understood in the form of transfer of capital, management and new technology from
References: Bista, Raghu Bir. 2011. Economics Of Nepal. Kathmandu: New Hira Books Enterprises. Bista, Raghu Bir. 2005. Foreign Direct Investment in Nepal. Kathmandu: Center for Integrated Development Studies. Ministry of Finance( MoF ). 2011. Economic Survey. Kathmandu: MoF. Ministry of Industry(MoI ). 1993. Industrial Policy. Kathmandu: MoI. World Investment Report, 2011 www.mof.gov.np www.moi.gov.np www.nrb.com.np