Barriers to foreign direct investment in the power sector: evidence from Bangladesh

Barriers to foreign direct investment in the power sector: evidence from Bangladesh PurposeThe purpose of this study is to investigate factors that deter firms from pursuing foreign direct investment (FDI) in Bangladesh’s power sector.Design/methodology/approachThe study uses a mixed-method approach comprising semi-structured interviews and questionnaires. A quantitative analysis including a one-way analysis of variance and analytical hierarchy process is also included.FindingsThe results reveal that political aspects are the most influential barriers impeding FDI in the power sector, followed by economic and financial, societal and regulatory aspects. Of the individual factors, land acquisition/rent/lease, corruption, political interference, an inadequate gas transmission system and a long independent power producers’ approval process are key obstacles deterring FDI in the power sector. The ownership structure matters in ranking decisions to conduct FDI.Practical implicationsThe study can assist managers in identifying key factors that deter FDI in the power sector. It can also assist the government to establish the right policies for the sustainable development of FDI in the power sector.Originality/valueThis study is the first of its kind in Bangladesh’s power sector that analyzes the key barriers hindering FDI systematically. It also discusses policies on removing these barriers for sustainable development of FDI in the power sector. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Development Issues Emerald Publishing

Barriers to foreign direct investment in the power sector: evidence from Bangladesh

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1446-8956
DOI
10.1108/IJDI-11-2018-0182
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this study is to investigate factors that deter firms from pursuing foreign direct investment (FDI) in Bangladesh’s power sector.Design/methodology/approachThe study uses a mixed-method approach comprising semi-structured interviews and questionnaires. A quantitative analysis including a one-way analysis of variance and analytical hierarchy process is also included.FindingsThe results reveal that political aspects are the most influential barriers impeding FDI in the power sector, followed by economic and financial, societal and regulatory aspects. Of the individual factors, land acquisition/rent/lease, corruption, political interference, an inadequate gas transmission system and a long independent power producers’ approval process are key obstacles deterring FDI in the power sector. The ownership structure matters in ranking decisions to conduct FDI.Practical implicationsThe study can assist managers in identifying key factors that deter FDI in the power sector. It can also assist the government to establish the right policies for the sustainable development of FDI in the power sector.Originality/valueThis study is the first of its kind in Bangladesh’s power sector that analyzes the key barriers hindering FDI systematically. It also discusses policies on removing these barriers for sustainable development of FDI in the power sector.

Journal

International Journal of Development IssuesEmerald Publishing

Published: Sep 2, 2019

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