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Title: Master the Art of Literature Review on FDI Determinants with ⇒ StudyHub.

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In other words, before we get into our methodology and research questions, we’ll go through what’s
been done previously and how the variables we want to investigate fit into the theories and
frameworks of our research field. Previously, they relied on loans which were offered by
international commercial banks. Researcher Wheeler (1992) claimed that a number of foreign
businesses that are looking to serve the local market are more likely to decide to open their branches
in host country taking into account the fact that it will be difficult for them to import their products.
Research Leap is an international journal hosting platform for business research, management and
innovation. This serves several important purposes: Contextualization: It helps researchers place their
study within the context of existing knowledge and identify gaps or areas where further research is
needed. Furthermore, some papers reported that high taxes may have negative impact on FDI
decisions, discouraging the inflow of foreign capital. FDI is regarded as the key element of the
economy as it helps for the development of the host country. Moreover, Ismail (2015) found that
large markets with high market growth are more likely to utilize resources and benefit from the
economies of scale. Selecting the type of review to conduct -Empirical Review and Literature
Review College students are often required to write several papers as part of their studies. In this
regard, FDI is considered to be as one of the most efficient ways of obtaining capital that is
convenient for both investors and host country members. Therefore, it can be mentioned that certain
type of factors which are likely to influence on firm performance may also likely to impact on the
direction of FDI. Empirical research involves collecting and analysing primary data through
experiments, surveys, observations, or any other data collection method(s). Both articles are
responsible for presenting the facts, but their strategies differ. Generally, investors are likely to
consider the tax incentives offered by the host country in making their decision alongside with the
other factors. In other words, large market size is reported to lead to the stimulation of FDI activities
to the economy. What is the purpose of a literature review in empirical research studies. The practical
implications of the paper can also be useful for the economies of the developing countries since they
can implement rules and regulations by ensuring the openness of their country and the participation
of their countries in international trade, which is quite an important factor which may influence an
FDI decision. In some cases, reviews of studies that involve experiments are used in empirical
reviews to generate findings based on experience that may be seen directly or indirectly. Mainly,
countries with low income consider their poor infrastructure as the main obstacle and most of the
host countries always look for the ways of increasing foreign direct investment in order to improve
their infrastructure. Review of the literature led to the development of research model which
provides the most potential determinants of FDI. A literature review in empirical research studies
provides a comprehensive and systematic overview of existing published research and scholarly
works related to the topic under investigation. A well-written review may also assist you in your
professional life. Particularly, GDP per capita is considered to imply positive future prospects for the
operations of the country. There is an important function for the literature review in uncovering
defining, and clarifying key ideas that will be utilized throughout the empirical parts of the paper
argues. During the study, observations should be recorded methodically. Therefore, close attention to
the ways through which FDI can be attracted is considered to be very important. The relationship
between FDI and labour cost can be different in terms of the industry. Therefore, most of the
countries that lack finances are constantly looking for both direct and indirect investments. As a
result, staying on top of your job helps your paper and your personal life grow. Validation of
Research Question: By reviewing the literature, researchers can ensure that their research questions or
hypotheses have not been adequately addressed in prior studies.
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During the study, observations should be recorded methodically. If you are going to write an essay or
article, you must first figure out what your topic is. This implies that when there is an equality of
political and economic factors, the importance of tax incentives may then be realized and taken into
consideration. Moreover, the role of government authorities can be one of the key factors for
explaining the increasing flow of capital from foreign countries. This type of FDI is common when
investors try to obtain specific resources from a foreign country which are not available in their
home country.These include natural resources, raw materials and cheap labour (Gastanaga, 1998).
Possible examples of tax incentives include rates of reduced tax on profit, tax holidays, and
decreased amount of tariffs on imported tools and machinery. FDI is defined as one of the ways of
obtaining capital flows (Blonigen, 2002; Kolstad, 2012). The first type of FDI is described as
market-seeking FDI, which mainly focuses on serving local markets. Taking into consideration above
mentioned points, this paper is going to propose the research model that can well explain the potential
determinants of FDI. To browse Academia.edu and the wider internet faster and more securely,
please take a few seconds to upgrade your browser. These potential determinants and their
interrelations can be beneficial in deriving policy implications in terms of attracting the attention of
investors and increase the flow of foreign direct investment. The accumulation of all literary works
may lead to new deductions. Therefore, export-oriented FDI is mainly motivated by the presence of
cheap labour cost. Ownership advantage indicates that the business starting to operate in a foreign
country should have its number of advantages in terms of strategy, marketing, personnel and
funding. Most of the developing countries that have reached a substantial level of economic
development should be also carefully studied since nowadays FDI invested in developing countries is
expected to present high expected return. Therefore, the growth of market share leads to the increase
of FDI. Research reviewers thoroughly examine all findings of other authors before drawing any
conclusions in an essay or paper. Therefore, developing countries can also benefit from the
understanding of necessary factors and may succeed in attracting the attention of foreign investors.
FDI is regarded as the key element of the economy as it helps for the development of the host
country. The goal is to provide data that can be quantified using established scientific methods. In
summary, a literature review in empirical research serves as the foundation upon which a new
empirical study is built, helping researchers gain a deep understanding of the existing knowledge in
their field, refine their research questions, and make informed decisions about the research design
and methods they will employ. Related. You can download the paper by clicking the button above. It
also suggests paths for future research in this area. Mainly, countries with low income consider their
poor infrastructure as the main obstacle and most of the host countries always look for the ways of
increasing foreign direct investment in order to improve their infrastructure. It has been stated that
three important conditions should be met for the successful execution of FDI including ownership
advantage, location advantage and internalisation advantages. Horizontal FDI is mainly concerned
with serving and improving the economic condition of the host country by increasing local
production, size of the market and its growth. Tariff- jumping and export substituting can be the
example of horizontal FDI. Moreover, some of the investors are reported to prioritize the factors
according to their importance. In this regard, the importance of capital flows into manufacturing
sector deserves particular focus.
In other words, large market size is reported to lead to the stimulation of FDI activities to the
economy. The subject determines the flow of the writing, the material provided, and every other
element. The importance of FDI is considered to be important for both developed and developing
countries. Researcher Wheeler (1992) claimed that a number of foreign businesses that are looking to
serve the local market are more likely to decide to open their branches in host country taking into
account the fact that it will be difficult for them to import their products. However, some key
discussion can be put forward regarding their role. Thus, it can be stated that alongside with bank
loans, foreign direct investment can be considered as an alternative way of getting capital flows. For
example, the political instability in Nigeria and Angola is compensated as a result of the high return
of capital. The goal is to provide data that can be quantified using established scientific methods.
Blonigen (2002) stated that high quality of infrastructure is reported to influence positively on the
potential of growth of FDI, thus, resulting in high inflows of capital towards the country. The study
conducted by Deng (2004) implied that open economies are a key factor in encouraging more
foreign direct investment. Thank you for your time, we hope you got value reading Differences
between Empirical Review and Literature Review. Previously, they relied on loans which were
offered by international commercial banks. Therefore, the growth of market share leads to the
increase of FDI. Unlike horizontal FDI, vertical FDI, also known as export-oriented FDI is about
relocating the necessary technologies and machines to foreign country. In this regard, the potential
determinants of FDI which have been identified as a result of literature review include market size,
labour cost and productivity, political risk, infrastructure, economic growth and tax. There is a
number of evidences supporting the view that openness is a critical factor and one of the
determinants of FDI. That is to say, tax incentives are not likely to influence negatively on the
decision of FDI and at the same time they are not going to generate positive results. Developing
countries are offering income tax holidays, exemptions of import duty and market preferences and
etc. A well-written review article may shed light on the current state of knowledge, explain apparent
inconsistencies, pinpoint areas in need of more study, and even help to forge a consensus where none
previously existed. Professional Content Writing Services by Writers King LTD. In this regard, the
importance of capital flows into manufacturing sector deserves particular focus. As a result, staying
on top of your job helps your paper and your personal life grow. Students often accost empirical
studies and literature reviews while preparing a research paper. One of the main considerations that
involve FDI in the manufacturing sector is related to cost. AI tools like SciSpace literature review
can help you compare, contrast, and analyze research papers more efficiently. It is worth to mention
that the tax policies of different countries vary based on the specificity of the firm. Identification of
Variables: It helps identify key variables and factors examined in previous research, which can guide
the selection of variables in the new study. The relationship between political instability and FDI
flow is still unclear. Therefore, it is important to have an understanding of the general and most
common type of factors which is applicable to almost each type of FDI. The critical factors
mentioned in the model can be applicable in the case of developing countries as well.
Low tariffs and transportation costs are also one of the main reasons regarding why this type of FDI
is popular. These data are collected and analyzed by scientists. Validation of Research Question: By
reviewing the literature, researchers can ensure that their research questions or hypotheses have not
been adequately addressed in prior studies. Because experiments may take some time to produce the
desired results, this is especially important for empirical studies. Studies show that poor infrastructure
can be considered as an obstacle or an opportunity for the investment (Greene, 2002). The Pakistan
Development Review, 42(4), pp. 697- 714. In contrast to other types of literature reviews, the focus
here is on the most recent results of the experimental studies as it is now being conducted. The goal is
to provide data that can be quantified using established scientific methods. International Journal of
Innovation and Economic Development, 2(3), 26-31. Their model showed statistically significant
negative relationship between FDI and wage. These variables include market size, openness, growth,
infrastructure, taxes and political risk. The accumulation of all literary works may lead to new
deductions. It has been reported that the relationship between the degree of openness and FDI may
vary depending on the type of sector. The review of the literature has enabled us to identify a
number of potential determinants which can be used to explain the precedents behind FDI. The
subject determines the flow of the writing, the material provided, and every other element.
Identification of Variables: It helps identify key variables and factors examined in previous research,
which can guide the selection of variables in the new study. Therefore, the future research is going to
be focused on ensuring the validity of the model through statistical analysis. In this age of AI,
research has become more interesting as you can use AI for your research study to make reviewing
literature easier (Thesis, Dissertation, Research paper, among others). During the study, observations
should be recorded methodically. This type of FDI is common when investors try to obtain specific
resources from a foreign country which are not available in their home country.These include natural
resources, raw materials and cheap labour (Gastanaga, 1998). Get your seat closer; let’s get to what
you need to know about Empirical Review and Literature Review and their notable differences.
Therefore, export-oriented FDI is mainly motivated by the presence of cheap labour cost. Most of the
developing countries that have reached a substantial level of economic development should be also
carefully studied since nowadays FDI invested in developing countries is expected to present high
expected return. You can download the paper by clicking the button above. Market size is considered
as the main determinant for horizontal FDI. ScholarsChin (2016) and Charkrabarti (2001) think that
emergence of these theories can be a critical step to developing various models related to
determinants of FDI. An empirical literature review, also known as a systematic literature review,
analyzes previous empirical studies in order to provide an answer to a specific research topic. It is
reported that investors are certain to increase the inflow of foreign capital as long as there is
availability of natural resources no matter the political stability of the country (Anderson, 2003).
Therefore, close attention to the ways through which FDI can be attracted is considered to be very
important. It’s critical to know the difference between the two in order to craft a solid piece of
writing.
Most of the developing countries that have reached a substantial level of economic development
should be also carefully studied since nowadays FDI invested in developing countries is expected to
present high expected return. Despite the several researches that have studied potential determinants
of FDI (Wheeler, 1992; Anderson, 2003), the focus of those papers were targeted for the developed
countries. However, at the same time, the fiscal revenue may be negatively affected due to the tax
incentives and allow for the emergence of illegal tax behaviour which is mainly observed in
international companies. An example of an empirical review would be a critical examination of
several recent scientific studies that have investigated the effectiveness of a specific drug in treating
a particular medical condition. Moreover, it is also defined as the purchase of income generating
asset in the foreign country that gives the owner the ability to control the operations of the firm.
There is an important function for the literature review in uncovering defining, and clarifying key
ideas that will be utilized throughout the empirical parts of the paper argues. Both articles are
responsible for presenting the facts, but their strategies differ. For example, it is important to
establish necessary rules and regulations in order to legally ensure that particular country is open for
international trade and will favourable make contract with foreign investors under reasonable
conditions. Most of the time, the analysis entails quantifying the data and drawing conclusions. An
empirical review is a piece of writing based on a study that was done purely for the purpose of
publishing it. However, the emergence of international trade and establishment of multinational
companies in international level significantly highlights the importance of telephone density and
internet access as the crucial means of communication that fall under the category of infrastructure.
FDI in resource sector is mainly concerned with countries which are full of natural resources. Tariff-
jumping and export substituting can be the example of horizontal FDI. Therefore, the future research
is going to be focused on ensuring the validity of the model through statistical analysis. For instance,
the study conducted by Wheeler and Mody (1992) found a significant positive relationship between
FDI and wage for the electronics industry, however, manufacturing industry taken as a whole
showed no relationship between FDI and wage. This interferes with the job and lowers the quality.
The practical implications of the paper can also be useful for the economies of the developing
countries since they can implement rules and regulations by ensuring the openness of their country
and the participation of their countries in international trade, which is quite an important factor
which may influence an FDI decision. The variables included in the model are considered to be
important. There is a number of evidences supporting the view that openness is a critical factor and
one of the determinants of FDI. Their model showed statistically significant negative relationship
between FDI and wage. Calibrated instruments are used to conduct the experiment in a scientifically
controlled way. Defining Literature Review -Empirical Review and Literature Review The literature
review, instead of an empirical review, necessitates reading several related studies. Charkrabarti
(2001) found a positive relationship between these two variables while Blonigen (2002) found
negative relationship stating that political risk has a negative impact on FDI. For instance, mobile
firms that operate globally in different market may take the advantage of tax incentives by offering
their products in different markets and at the same time exploring the tax regimes of different
countries.The increasing popularity of advanced technology enabled both developed and developing
countries from the increasing flow of foreign capital. Therefore, developing countries can also benefit
from the understanding of necessary factors and may succeed in attracting the attention of foreign
investors. Different forms of tax incentives are provided in the literature including income-based,
capital investment based, labour-based, sales-based, value added, import and export based (UNCTS,
2000). Therefore, export-oriented FDI is mainly motivated by the presence of cheap labour cost.
Therefore, no matter how much tax incentive will be offered, investors are unlikely to increase the
flow of foreign capital to that country if they are not sure about good political and economic
environment. Moreover, it is worth to mention that most of the papers are indecisive regarding the
influence of these determinants on FDI. The uniqueness of the model can be explained by the fact
that it does not only consider critical factors relevant to developed countries, but also potential
variables including market size, openness, political risk and taxes can be used in the context of
developing countries.

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