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The Role of the Investment Climate and Tax Incentives in the Foreign Direct Investment Decision: Evidence from South Africa

The Role of the Investment Climate and Tax Incentives in the Foreign Direct Investment Decision:... In this article, the author uses microdata and firm interviews to explore the role of foreign direct investment drivers in South Africa. Reinforcing the majority of the foreign direct investment literature, she finds that pecuniary incentives play a negligible role in the investment decision for the majority of firms. The micro level of analysis enables specification of the investment climate constraints that are decisive—notably political and regulatory uncertainty, skills, labor regulation, and exchange volatility. This area-specific analysis contains potential lessons for other sub-Saharan countries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal Of African Business Taylor & Francis

The Role of the Investment Climate and Tax Incentives in the Foreign Direct Investment Decision: Evidence from South Africa

Tuomi, Krista
Journal Of African Business , Volume 12 (1): 15 – Mar 28, 2011
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15 pages

The Role of the Investment Climate and Tax Incentives in the Foreign Direct Investment Decision: Evidence from South Africa

Abstract

In this article, the author uses microdata and firm interviews to explore the role of foreign direct investment drivers in South Africa. Reinforcing the majority of the foreign direct investment literature, she finds that pecuniary incentives play a negligible role in the investment decision for the majority of firms. The micro level of analysis enables specification of the investment climate constraints that are decisive—notably political and regulatory uncertainty, skills, labor...
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Publisher
Taylor & Francis
Copyright
Copyright Taylor & Francis Group, LLC
ISSN
1522-9076
eISSN
1522-8916
DOI
10.1080/15228916.2011.555279
Publisher site
See Article on Publisher Site

Abstract

In this article, the author uses microdata and firm interviews to explore the role of foreign direct investment drivers in South Africa. Reinforcing the majority of the foreign direct investment literature, she finds that pecuniary incentives play a negligible role in the investment decision for the majority of firms. The micro level of analysis enables specification of the investment climate constraints that are decisive—notably political and regulatory uncertainty, skills, labor regulation, and exchange volatility. This area-specific analysis contains potential lessons for other sub-Saharan countries.

Journal

Journal Of African Business – Taylor & Francis

Published: Mar 28, 2011

Keywords: FDI; incentives; microanalysis; South Africa; taxation

References

  • Do domestic firms benefit from foreign direct investment?
  • Ownership structure in foreign direct investment projects
  • On the determinants of foreign direct investment to developing countries: Is Africa different?
  • Foreign direct investment in Africa: The role of natural resources, market size, government policy, institutions and political instability
  • Foreign direct investment in Sub-Saharan Africa: Motivating factors and policy issues
  • The development challenge in post-Apartheid South African education
  • Growth impact and determinants of foreign direct investment into South Africa, 1956–2003
  • Globalisation and FDI in South Africa
  • Foreign direct investment in developing countries
  • External finance and investment climate in East Asia and other emerging markets: What really matters?
  • Trade, foreign direct investment and technology transfer: A survey