Motivations for Foreign Direct Investment in Central Asia
Posted: Tue Apr 22, 2025 7:04 am
China has a long history of increasing its presence in Central Asia as a direct investor. For example, in 2005, China’s share of total FDI inflows into Kazakhstan and the Kyrgyz Republic was 3% and 2%, respectively; by 2012, these figures had risen to 8% and 24%. In Tajikistan, China’s share of total FDI increased from 4% in 2009 to 21% in 2012. The Russian Federation is one of the largest investors in all of these countries; its share is highest in Uzbekistan, fairly large in Tajikistan and Turkmenistan, and somewhat smaller but still significant in Kazakhstan and the Kyrgyz Republic (4% in both countries).
To understand the impact of FDI on the economy, it is necessary henan cell phone number list/ to understand the motives that drive both investors and recipients of FDI when they consider investment projects.
The literature on FDI identifies several typical investment motives:
Resource search: Resource search occurs when the host country has natural resources, cheap labor, and/or physical infrastructure.
Market search. Market search refers to the desire of investors to enter new markets when this cannot be done through trade. This situation occurs in sectors that are either well protected from imports or deal with goods and services that are not subject to foreign trade.
Efficiency- seeking (Dunning, 1993) Efficiency-seeking FDI aims to rationalize the structure of existing resource- or market-seeking investment units so that the investing firm can benefit from unified management of its geographically dispersed units.
For efficiency-seeking foreign-invested production to occur, cross-border markets must be sufficiently open. This form of FDI is therefore characteristic of regionally integrated markets.
To understand the impact of FDI on the economy, it is necessary henan cell phone number list/ to understand the motives that drive both investors and recipients of FDI when they consider investment projects.
The literature on FDI identifies several typical investment motives:
Resource search: Resource search occurs when the host country has natural resources, cheap labor, and/or physical infrastructure.
Market search. Market search refers to the desire of investors to enter new markets when this cannot be done through trade. This situation occurs in sectors that are either well protected from imports or deal with goods and services that are not subject to foreign trade.
Efficiency- seeking (Dunning, 1993) Efficiency-seeking FDI aims to rationalize the structure of existing resource- or market-seeking investment units so that the investing firm can benefit from unified management of its geographically dispersed units.
For efficiency-seeking foreign-invested production to occur, cross-border markets must be sufficiently open. This form of FDI is therefore characteristic of regionally integrated markets.