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Title: Legal systems as a determinant of foreign direct investment : the case of Sri Lanka.
Author: Perry, Amanda Joan.
ISNI:       0000 0000 7984 2948
Awarding Body: London School of Economics and Political Science (University of London)
Current Institution: London School of Economics and Political Science (University of London)
Date of Award: 2000
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Foreign direct investment (FDI) is widely considered to be an essential source of capital for developing countries. A broad consensus is developing amongst academics, multilateral development organisations and bilateral aid donors that a states' legal system is an important factor affecting the location of FDI; that predictable and efficient legal systems are the most effective in attracting FDI; and that efficiency and predictability are best achieved by adopting a Western- style legal system (Ideal Paradigm). A case study is presented of foreign investment in Sri Lanka, which is reforming its legal system to attract FDI. Interviews with the wider community, and a survey of foreign investors are used to test (1) whether the legal system is a factor in investment decisions in Sri Lanka, and (2) whether investors react negatively to a legal system which is not of the Ideal Paradigm. The research findings indicate that, in the case of Sri Lanka, the legal system is probably not a factor in the investment decisions of many investors in the sample, and many investors generally; that most investors do not react negatively to legal systems which are not- of the Ideal Paradigm;-and that the role-of the legal-system as -a-determinant of FDI may be affected by investors' characteristics, such as their size or nationality. It is concluded that current legal reform recommendations may be flawed, in that they reflect misconceptions about foreign investors' expectations of host state legal systems. These misunderstandings may result from a lack of research, and an excessive emphasis upon an international liberal economic agenda. A better understanding of the expectations of different types of investors is required if the costs of legal reform are to be rewarded with adequate benefits.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: FDI; Capital