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Foreign Direct Investment in a Transition Economy: Lessons from the Experience of Mongolia

Author

Listed:
  • Oyunbadam Davaakhuu

    (Oyunbadam Davaakhuu, Manager, Economic Policy Programme at Open Society Forum, P.O. Box. 216, Post Office 44, Ulaanbaatar 14250, Mongolia. E-mail: oyun_dv@yahoo.com)

  • Kishor Sharma

    (Kishor Sharma, School of Accounting and Finance, Charles Sturt University, Wagga Wagga, NSW 2678, Australia. E-mail: ksharma@csu.edu.au)

  • Yapa M.W.Y Bandara

    (Yapa M.W.Y. Bandara, School of Accounting and Finance, Charles Sturt University, Wagga Wagga, NSW 2678, Australia. E-mail: ybandara@csu.edu.au)

Abstract

This article presents an analysis of the trends and patterns of foreign direct investment (FDI) in Mongolia, a former centrally planned economy which embarked on economic reforms in 1990. Since then, there has been a dramatic increase in FDI inflow into the country. The volume of FDI rose from less than one per cent of GDP in 1991 to 80 per cent by 2010. These foreign-owned enterprises have made a significant contribution to the country’s export earnings, but their effects on employment-creation and hence poverty-reduction remains very small. This appears to be largely due to a heavy concentration of foreign firms in relatively capital-intensive mining sectors rather than labour-intensive light manufacturing. Further, there is evidence to support growing business confidence that Mongolia has a potential of FDI to become a major player in global commodity markets with its rich gold, copper, zinc, uranium, coal, molybdenum and oil reserves.

Suggested Citation

  • Oyunbadam Davaakhuu & Kishor Sharma & Yapa M.W.Y Bandara, 2014. "Foreign Direct Investment in a Transition Economy: Lessons from the Experience of Mongolia," Global Business Review, International Management Institute, vol. 15(4), pages 663-675, December.
    • Handle: RePEc:sae:globus:v:15:y:2014:i:4:p:663-675
    DOI: 10.1177/0972150914543427
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    References listed on IDEAS

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    1. Syed Tehseen Jawaid & Syed Ali Raza & Khalid Mustafa & Mohd Zaini Abd Karim, 2016. "Does Inward Foreign Direct Investment Lead Export Performance in Pakistan?," Global Business Review, International Management Institute, vol. 17(6), pages 1296-1313, December.
    2. Yang, Ruicheng & Xing, Weize & Hou, Shuxia, 2020. "Evaluating the risk factors influencing foreign direct investment in Mongolia's mining sector: A complex network approach," Emerging Markets Review, Elsevier, vol. 43(C).
    3. Syed Ali Raza & Mohd Zaini Abd Karim, 2018. "Influence of Systemic Banking Crises and Currency Crises on the FDI-Growth Nexus: Evidence from China," Global Business Review, International Management Institute, vol. 19(3), pages 572-589, June.
    4. Areej Aftab Siddiqui & San Vita, 2021. "Impact of Logistics Performance on Trade with Specific Reference to Garment Sector in Cambodia, Bangladesh and India," Global Business Review, International Management Institute, vol. 22(2), pages 517-531, April.

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