Foreign Direct Investment has risen drastically in the last twenty years in many developing countries, and is currently considered as a source of economic stimulus in these nations (Carkovic Levine 2002, p.48). The Direct Foreign Investment is mostly from the Asian companies as well as from other countries in the EU. The growth in the Foreign Direct Investment coincides with the reduction in the differences in economic growth of developing and developed countries (Mwilima, 2003, p.54). Libya has also not been left out in the growth of Direct Foreign Investment in its economy.
This paper is interested in analyzing the impact of Foreign Direct Investment in small and medium business enterprises in Libya. Looking at the trend in the recent years, research has shown that there has been increased Foreign Direct Investment by foreign companies in the small and medium businesses in Libya. There has been increased influence of this investment in the business arena in the Libyas economy. This paper will try to explore various roles played by the Direct Foreign Investments and their impacts in the businesses operations.
Research Problem
There has been increased Foreign Direct Investment in the small and medium business enterprises in Libya (Otman Karlberg, 2007, p.246). However, there is no adequate information available that can be used to gauge the performance of these investments in the overall economy of the country. Due to this problem in the country economic planners find it difficult to account for the impacts of these Foreign Direct Investments in the businesses. The information gap has made it difficult for government in planning. The Libya government is not sure whether to encourage or discourage these investments in the economy. This paper will try to bridge the information gap so that the government can have adequate information for national planning.
Objective of the Research
Broad objective
To determine the Impact of Foreign Direct Investment in Small and medium business enterprises in Libya
Specific objectives
To determine the effect of Foreign Direct Investment in the growth and development of small and medium business enterprises in Libya
To determine the major types of business that Foreign Direct Investment has been invested in.
To determine the major countries which are source of Foreign Direct Investment invested in small and business enterprises in Libya
Hypothesis
Direct foreign investment has a positive impact in the growth and development of small and medium enterprise in Libya.
Most of direct foreign investment invested in small and medium business is channeled to the industrial sub-sector.
Most of the Direct Foreign Investment invested in small and medium scale business enterprises in Libya originates from EU.
Literature Review
Direct foreign investment (FDI) is said to play an important role in the growth and development of business in the developing countries (African Development Bank 2004, p.12). Many studies have shown that it provides business access to new technology, cheaper production facilities, and new management skills (Dunning Narula, 1999, p.26). Foreign Direct Investment is where a firm from one country makes physical investment in another country (Goldstein, 2003, p.14).
Supporters of foreign investments point out that that Direct Foreign Investments gives benefits to both the giving and the receiving countries. They argue that there are usually mutual benefits that accrue from these investments. Opponents of DFI point out that multinationals give stiff competition to business in weaker economies thus forcing the local enterprises out of business.
There has been rapid growth in the FDI in the developing countries, especially in Africa, which is remarkable before FDI was held with suspicion which made many countries to put strict regulations on its use in financing project (Pigato, 2000, p.24). Globalization and trade liberalization have made the FDI to grow in the recent years. The balance of payment data shows that between 1988 and 1990 the annual FDI investment in middle income countries grew from 17bn to 139bn. The East Asia countries attract the highest amount of FDI despite the current financial crisis (UNCTAD 1995, p.15).
Most developing countries have come to a consensus that FDI can be an important resource to the growth and development of weak economies (United Nations Conference on Trade And Development 2002, p 8). This realization has made many countries to start competing for FDI, which has made these states to set up bodies that encourage the flow of FDI and also lessen the regulations governing FDI in their countries (United Nations Conference on Trade And Development, 1999, p.21).
Libya is a country that had for a long time blocked the FDI flow in its economy, which according to research shows that it affected the economy in a negative way. In the recent years, the country has lifted these regulations and encouraged the FDI flow in the economy, especially in the small and middle level business enterprises.
RESEARCH METHODOLOGY
This chapter will focus on research methodologies adopted by the researcher, which involve data collection methods, procedures, sampling techniques used, population size and the administration of the methodologies. In this view, the researcher shall be able to obtain the required information in a systematic manner.
Research Design
A case study approach will be adopted which will involve intensive analysis of various aspects of FDI and the role they play in small and medium scale business in Libya. The overall purpose of a case study is to obtain comprehensive information about the research object. Its primary advantage is the opportunity it affords for thorough and detailed examination analysis of research problem so that findings can be applied directly to object inquiry. It also allows precise judgments of facts and cause of certain phenomena.
Target Population
It is imperative that the population to be studied before the research is carried out.The research will adopt the method of choosing entrepreneurs of small and mediums businesses through random sampling technique. The target population will be 300 small and medium size enterprises to adequately analyze the impact of FDI in their operations. The sampling size will be based on purposive sampling whereby a sample size of 50 small and medium size enterprises will be used for the study. The sample size is chosen to ensure that adequate information will be obtained for the study. It is meant to enhance convenience, effectiveness and efficiency as well as minimizing chances of errors in data collection and analysis. Also, the research boundaries within the firms and implies that the research will be carried out fairly and easily within the given time limit and financial constraints.
Sampling Techniques and Procedures
Quota sampling method will be adopted in obtaining the sample from each enterprise which is intended to constitute the entire sample required by the researcher, the study will be confined to selected participants to ensure that the research is thorough and has a manageable sample size. Further, it meant to give comprehensive and accurate information collected and therefore makes the sample size a representative of the population under study.
This paper is interested in analyzing the impact of Foreign Direct Investment in small and medium business enterprises in Libya. Looking at the trend in the recent years, research has shown that there has been increased Foreign Direct Investment by foreign companies in the small and medium businesses in Libya. There has been increased influence of this investment in the business arena in the Libyas economy. This paper will try to explore various roles played by the Direct Foreign Investments and their impacts in the businesses operations.
Research Problem
There has been increased Foreign Direct Investment in the small and medium business enterprises in Libya (Otman Karlberg, 2007, p.246). However, there is no adequate information available that can be used to gauge the performance of these investments in the overall economy of the country. Due to this problem in the country economic planners find it difficult to account for the impacts of these Foreign Direct Investments in the businesses. The information gap has made it difficult for government in planning. The Libya government is not sure whether to encourage or discourage these investments in the economy. This paper will try to bridge the information gap so that the government can have adequate information for national planning.
Objective of the Research
Broad objective
To determine the Impact of Foreign Direct Investment in Small and medium business enterprises in Libya
Specific objectives
To determine the effect of Foreign Direct Investment in the growth and development of small and medium business enterprises in Libya
To determine the major types of business that Foreign Direct Investment has been invested in.
To determine the major countries which are source of Foreign Direct Investment invested in small and business enterprises in Libya
Hypothesis
Direct foreign investment has a positive impact in the growth and development of small and medium enterprise in Libya.
Most of direct foreign investment invested in small and medium business is channeled to the industrial sub-sector.
Most of the Direct Foreign Investment invested in small and medium scale business enterprises in Libya originates from EU.
Literature Review
Direct foreign investment (FDI) is said to play an important role in the growth and development of business in the developing countries (African Development Bank 2004, p.12). Many studies have shown that it provides business access to new technology, cheaper production facilities, and new management skills (Dunning Narula, 1999, p.26). Foreign Direct Investment is where a firm from one country makes physical investment in another country (Goldstein, 2003, p.14).
Supporters of foreign investments point out that that Direct Foreign Investments gives benefits to both the giving and the receiving countries. They argue that there are usually mutual benefits that accrue from these investments. Opponents of DFI point out that multinationals give stiff competition to business in weaker economies thus forcing the local enterprises out of business.
There has been rapid growth in the FDI in the developing countries, especially in Africa, which is remarkable before FDI was held with suspicion which made many countries to put strict regulations on its use in financing project (Pigato, 2000, p.24). Globalization and trade liberalization have made the FDI to grow in the recent years. The balance of payment data shows that between 1988 and 1990 the annual FDI investment in middle income countries grew from 17bn to 139bn. The East Asia countries attract the highest amount of FDI despite the current financial crisis (UNCTAD 1995, p.15).
Most developing countries have come to a consensus that FDI can be an important resource to the growth and development of weak economies (United Nations Conference on Trade And Development 2002, p 8). This realization has made many countries to start competing for FDI, which has made these states to set up bodies that encourage the flow of FDI and also lessen the regulations governing FDI in their countries (United Nations Conference on Trade And Development, 1999, p.21).
Libya is a country that had for a long time blocked the FDI flow in its economy, which according to research shows that it affected the economy in a negative way. In the recent years, the country has lifted these regulations and encouraged the FDI flow in the economy, especially in the small and middle level business enterprises.
RESEARCH METHODOLOGY
This chapter will focus on research methodologies adopted by the researcher, which involve data collection methods, procedures, sampling techniques used, population size and the administration of the methodologies. In this view, the researcher shall be able to obtain the required information in a systematic manner.
Research Design
A case study approach will be adopted which will involve intensive analysis of various aspects of FDI and the role they play in small and medium scale business in Libya. The overall purpose of a case study is to obtain comprehensive information about the research object. Its primary advantage is the opportunity it affords for thorough and detailed examination analysis of research problem so that findings can be applied directly to object inquiry. It also allows precise judgments of facts and cause of certain phenomena.
Target Population
It is imperative that the population to be studied before the research is carried out.The research will adopt the method of choosing entrepreneurs of small and mediums businesses through random sampling technique. The target population will be 300 small and medium size enterprises to adequately analyze the impact of FDI in their operations. The sampling size will be based on purposive sampling whereby a sample size of 50 small and medium size enterprises will be used for the study. The sample size is chosen to ensure that adequate information will be obtained for the study. It is meant to enhance convenience, effectiveness and efficiency as well as minimizing chances of errors in data collection and analysis. Also, the research boundaries within the firms and implies that the research will be carried out fairly and easily within the given time limit and financial constraints.
Sampling Techniques and Procedures
Quota sampling method will be adopted in obtaining the sample from each enterprise which is intended to constitute the entire sample required by the researcher, the study will be confined to selected participants to ensure that the research is thorough and has a manageable sample size. Further, it meant to give comprehensive and accurate information collected and therefore makes the sample size a representative of the population under study.
No comments:
Post a Comment