ncell

Topics: Investment, Macroeconomics, Foreign direct investment Pages: 14 (2155 words) Published: October 19, 2014

FOREIGN DIRECT INVESTMENT IN NEPAL: A TREND ANALYSIS
(A case study on Teliasonera)

Submitted by:
BIKASH AGRAWAL
UNIVERSITY ROLL NO.: 1308007152
COLLEGES ROLL NO: 1307201134

A Proposal SUBMITED TO
HEAD OF the DEPARTMENT
COLLEGE FOR PROFSSIONAL STUDIES
LC OF SIKKIM MANIPAL UNIVERSITY

in partial fulfillment o f the requirement for the award of the degree of MBA IN FINANCE
KATHMANDU NEPAL
OCTOBER 2014

Table of Contents

List of symbols and Abbreviations

FDI :Foreign Direct Investment
GDP :Gross Domestic Product
Ncell :Nepal’s Teliasonera Investment
NTC : Nepal Telecommunication Centre
SWOT : Strength Weakness Opportunity Threat
BIPPA : Bilateral Investment Promotion and Protection Agreement WWW : World Wide Web

1.1 Introduction
The past two decades have witnessed a profound shift in the policy emphasis on foreign direct investment (FDI) in developing countries. In a significant departure from the skepticism about the developmental role of FDI, which pervaded policy thinking for over three decades during the post-war era, more and more countries have become increasingly receptive to FDI as an integral element of outward-oriented policy reform. Despite this notable policy shift, the literature on the role of FDI in developing countries still remains both sparse and skewed. The few existing studies have focused almost exclusively on the experience of the middle- and upper-middle income developing countries, in particular the high-performing countries in East Asia. Policy inferences coming from this literature are of limited value for late-comers, because the role of FDIVaries across countries depending on their stage in the internationalization of the economy, the nature and timing of policy shifts as well as the initial conditions of the host country, such as the degree of industrial and entrepreneurial development. This article aims to redress this imbalance in the literature by examining the patterns of FDI in Nepal, following the market-oriented policy reforms initiated in the mid-1980s. Nepal provides a particularly interesting case study of the subject, not only because of its least developed country (LDC) status, but also because of its geography, characterized by being landlocked and having a long open border with a large neighbor, India.

1.2 BACKGROUND OF STUDY
FDI is rapidly growing in developing countries. The theoretical study highlights the perfect market theory and imperfect market theories of FDI. FDI is an important source for the developing countries, which has plenty of resources but is economically weak with a deficiency in finance, technology and competitive management. FDI introduces new technology, knowledge, skills, new management practices, etc. to the recipient economy. Based on Investment across borders reports (2010), world bank points the benefits of FDI as, ”A global network of 80,000 multinational corporations and 800,000 foreign affiliates have helped create millions of jobs, transferred technology, modern skills, fostered competition, and contributed to the fiscal standing of many economies”. Several early literatures on FDI have proved that FDI is an essential asset for country’s economic growth. Fortanier & Van Wijk (2010) has explained that FDI (inward) creates employment opportunities, which henceforth could benefits developing countries, such as Nepal. FDI plays as a matchmaker in the economic development of countries. Foreign direct investment has not been widely practiced in Nepal. With the settlement of political conflicts, a growing number of international projects are willing to assure in Nepalese economy. Few years ago, a Finnish firm “TELIASONERA”; the first and only private telecommunication firm; has implied its business in mountain land. The firm's business...
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