The Impact of Political Factors on FDI Ownership Structure Decision

1
The impact of political factors on FDI ownership structure decision
Name:
Course:
Date:

2
Abstract
Foreign direct investment has been on the rise in the recent past. The growth in the sector is
owed to the globalization aspect adopted in the business field. This creates the need for a
study on the factors affecting the growth. The paper focuses more on the effect of political
factors on the field since it is a key determiner of development of the field. The aim of this
paper is to develop an understanding of the relationship between political and global business
development. The knowledge acquired is necessary for application in the business field.

3
Table of Contents
Abstract......................................................................................................................................2
The impact of political factors on FDI ownership structure decision........................................4
Introduction................................................................................................................................4
Literature review........................................................................................................................4
Conceptual framework...............................................................................................................5
Trust of government...............................................................................................................5
The level of democracy..........................................................................................................6
Joint Venture..........................................................................................................................6
Hypothesis development............................................................................................................7
Hypothesis 1: the level of democracy increases the likelihood of MNC to choose Joint
venture....................................................................................................................................7
Hypothesis 2: the trust of the government strengthens the relationship between the level of
democracy and joint venture..................................................................................................7
Research methodology...............................................................................................................8
Sample and data collection.....................................................................................................8
Measures.................................................................................................................................9
Dependent variable indicators............................................................................................9
Independent variable indicators..........................................................................................9
Control variables.................................................................................................................9
Bibliography.............................................................................................................................10