ECONOMICS
ECONOMIC DEVELOPMENT
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Question
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Remittances from abroad fall, there is an increase in net FDI inflows, there is a fall in price of oil
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The government starts investing in huge infrastructure programmes, remittances from abroad fall, there is a fall in net FDI inflows
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Remittances from abroad rise, there is a decrease in net FDI inflows, the government starts investing in huge infrastructure programmes
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There is a increase in demand for Lebanese exports, there is an increase in net FDI flows, remittances from abroad rise
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Detailed explanation-1: -On determinants, the paper finds that market size, infrastructure quality, political/economic stability, and free trade zones are important for FDI, while results are mixed regarding the importance of fiscal incentives, the business/investment climate, labor costs, and openness. II.
Detailed explanation-2: -With its liberal economy, Lebanon has attracted foreign investors for many years. Advantages for FDI in Lebanon include: The country can represent a gateway to other countries in the Middle East and to many emerging economies thanks to its geographical location. The relatively westernised workforce is highly skilled.
Detailed explanation-3: -If the foreign direct investment increases, the price of foreign exchange will fall as foreign direct investment is a component of the demand of foreign exchange and we know, components of the demand of foreign exchange is inversely related to the foreign exchange rate.
Detailed explanation-4: -Stability of the Government: Flexibility in the Government Policy: Pro-active measures of the Government to promote investment (infrastructure): Exchange rate stability: Tar policies and concessions: Scope of the market: More items