INVESTING IN EMERGING MARKETS THROUGH FDI

Investing In Emerging Markets through FDI

Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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Abstract

In this study we try to explore the concept of “Topic” in a holistic context. The main focus of the research is on “Topic” and its relation with “Subtopic”. The research also analyzes many aspects of “topic” and tries to gauge its effect on “subtopic”. Finally the research describes various factors which are responsible for “topic” and tries to describe the overall effect of “Topic” on “Subtopic”.

Table of Contents

CHAPTER 01: INTRODUCTION1

Thesis Statement9

Aims and objectives9

Research Questions10

Hypothesis 115

Hypothesis 215

Hypothesis 315

Hypothesis 415

CHAPTER 02: LITERATURE REVIEW16

Strategic Fits16

Incentives through Assets16

Global Strategic Motivation16

Direct variables16

2.1 The Central European stock markets17

The model21

DEPENDENT VARIABLE21

ANNUAL FDI OUTFLOWS.21

INDEPENDENT VARIABLES21

Political instability as a barrier to FDI24

CHAPTER 03: METHODOLOGY31

Proposed Research methods31

Primary or secondary / Qualitative or Quantitative31

Data Collection31

3.1. Data description32

3.2. Contemporaneous correlations33

3.3. Cointegrating vectors36

3.4. Error correction and Granger causality41

3.5. Conditional volatility45

CHAPTER 04: DISCUSSION48

Variable measurement48

Empirical test model49

CHAPTER 05: RESULTS51

Non-response bias test51

CHAPTER 06 :CONCLUSION53

REFERENCES56

APPENDIX59

CHAPTER 01: INTRODUCTION

After beside 30 years development thanks to the restructure and unfastening up principles, from the year of 2000, UK has been appeared as an worldwide investor boosted by the nationwide scheme of Going Global with associated very well liked policies. WWF (world Wild Fund for Nature) accounts that UK's outward Foreign Direct Investment (FDI) increased on mean 65.6 per hundred per annum from 2000 to 2005. authorized approximates from the United Nations Industrial Development association (UNIDo), display that UK's Europe investments are expected to come to US$ 6o billion by 2010. As a evolving homeland, UK has made the register of the anticipated peak five dwelling nations worldwide in periods of geographical treatment (2004-2005), restoring Japan, which conventionally has been a important dwelling country. The occurrence is especially important because it highlights UK's growing significance as considers FDI, not only as a owner but furthermore as a dwelling country.

A number of Central European (CE) countries have joined the European Union (EU) as new members in May 2004, creating a dynamic financial landscape in Euroland. The efficient financial integration of these markets with the developed European markets has important implications for the smooth accession of the CE economies but also for the long-term growth prospects of the enlarged EU. Despite high growth rates seen in the emerging CE stock markets, research remains surprisingly limited and the empirical findings appear sometimes ambiguous and contradictory. As further insight would be useful, this study attempts to fill some of the gaps in the topic and contribute a range of innovative conclusions.

Major emerging CE stock markets, namely Poland, Czech Republic, Hungary and Slovakia, are examined and compared to representative ...