| This master’s thesis examines the factors of foreign direct investment(FDI)flows of the Lao People Democratic Republic(Lao PDR).The aim of this study is to investigate the factors that have important effe cts on FDI flows to Laos and to study the constraints foreign firms when doing business in Laos.The conceptual framework used in this research is adopted from the Eclectic Paradigm or the OLI paradigm developed by(Dunning 2008).The paper covers five main factors which include: Firstly includes Infrastructure and technology.Secondly is political/government regulation.Thirdly consist of e conomic and market.Fourth includes financial and fifth is social and cultural factors.Under each of these,there are various sub-factors that are well known to have significant influences on FDI flows to the host country.The details of all factors are mentioned in the questionnaire found in appendix.The study was conducted in two phases.The first one is to review rel evant literature from various sources such as book,report,journals,publications and other related documentations.The second phase is to do a survey throughout the collects of primary data utilized by questionnaire.The population of the study is 3088 FDI firms running their investment in all types of business activities in the Laos since(1988-2018).Accordingly,the research questionnaires are randomly distributed to 70 foreign firms or respondents(one company = one respondent = questionnaire).They c onsist of 44 wholly foreign – owned enterprises,23 joint-venture enterprises,2 contracting business cooperation and 1 other enterprises.The random sampling method was also applied to focus on the existing foreign entrepreneurs who have set up their busi nesses in the Lao PDR.These firms have also been operated based on the FDI enterprises that have active performance and good management records,particularly the firms that located or have established their head offices,branches,and representative offic es in Vientiane Capital.This means that the selected samples are merely existed,Vientiane Capital.The collected primary data from the research questionnaire have coded and processed by using(Statistical Package for Social Science SPSS)program in order to facilitate the computation of frequency,percentage,mean and standard deviation.These were to help in determining the factors that the significant level of affecting FDI flows and also the constraining factors in doing business in Laos.And this research also used SPSS program,views software for statistical analysis of the data,correlation,and autocorrelation,augment Dickey-Fuller,Heteroscedasticity and regression test.Based on the result from the statistical analyzes,regarding the five main factors,the study reveals twelve factors that are considered to be the most relevant or important in explaining FDI flows to Laos.They include: Firstly,availability of qualify staff,electricity and road.Secondly is governmental stability,lengthy approval procedure,preventing policies on FDIs and law on investment.Third are stability of economic,low labor wage of and market growth potential.Fourth is exchange rate fluctuation and fifth is social stabilit y.In addition,the study also found three factors that are regarded to be very problem determinants faced when operat ing business in Laos.They are Lengthy approval procedure,road and water supply.Based on these findings,a recommendation is made to the government and organizations that are responsible for or related to dealing with FDIs and their relevant issues.The information provided in this study can also be a reliable source for policy making and strategy formulation in order for a comprehensive and effective and direction,which is consisten t with the investment potentials of Lao PDR and for promotion and attracting FDIs across the country. |
