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Fdi Impact on Firm Performance

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Fdi Impact on Firm Performance
Research Topic: FDI Impact on Firm Performance

Research Question: Impact of Inward FDI on Firm Performance across Sectors: Evidence from Uzbekistan

Research Objectives: • Determine the link between inward FDI and performance of domestic companies in Uzbekistan • Distinguish between vertical and horizontal spillover effects of FDI in firm performance • Develop hypothesis and test it to estimate the strength of impact of inward FDI on specified economic variables • Make policy recommendations on how the research findings can be implemented along with other existing policies in Uzbekistan

Literature Review

There have been many pieces of research undertaken in this area, namely, area of FDI. Vernon (1966) and Caves (1974) cited in Yasar and Morrison Paul (2007) propose that transnational companies (TNC) perform better that domestic companies in developing economies. According to United Nations Conference on Trade and Development (UNCTAD) Investment Policy Review (1999) the Uzbek government authorities are eager to attract FDI for the reason named below thus proving why FDI is important for the economies like Uzbekistan.
At the time of USSR Uzbekistan was mainly supplier of raw materials thus becoming low value added commodity producer. So, neither technological advancement nor skills development took place for the existing industries.
Nowadays the government priority is to promote FDI in primary sectors such as agricultural, mineral and hydrocarbon production as well as production of pharmaceuticals and medical equipment. It also aims at development of manufacturing advanced technology equipment, including computing, telecommunications and growth of services sector such as tourism industry.
According to the data provided by UNCTAD (2002) in its FDI in Brief: Uzbekistan, FDI stock continued to increase in primary sector in particular mining being the largest receiver of FDI. By the year of 2002 “the three largest affiliates of


Bibliography: AKULAVA, M. AND VAKHITOVA, G. 2010. The Impact of FDI on Firm Performance. [online] Available from: http://repec.kse.org.ua/pdf/KSE_dp26.pdf [Last accessed 08.11.2011] AZIZOV, A., 2007 UNCTAD, 2011. UNCTAD WID Country Profile: Uzbekistan. [online] Available from: http://unctad.org/sections/dite_fdistat/docs/wid_cp_uz_en.pdf [Last accessed 08.11.2011] UNCTAD, 2002 UNCTAD, 1999. Investment Policy Review of Uzbekistan. [online] Available from: http://www.unctad.org/en/docs/poiteiipm13.en.pdf [Last accessed 08.11.2011] YASAR, M ZOU, Y., 2010. The Impact of Inward FDI on Host Country: Firm Performance in New Zealand [online] Available from: http://researcharchive.vuw.ac.nz/bitstream/handle/10063/1350/thesis.pdf?sequence=1 [Last accessed 08.11.2011] -----------------------
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