The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia

Addisu Hailu Tulu

doi:doi:10.11648/j.ijeee.20210605.13

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The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia

Addisu Hailu Tulu

Published in International Journal of Economy, Energy and Environment (Volume 6, Issue 5)

Received: 27 January 2020 Accepted: 15 July 2021 Published: 15 September 2021

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Abstract

For economic, Social, or foreign direct investment promotion reasons, tax exemptions or incentives are common under tax laws of legal system of different nations. Under Ethiopian stamp duty laws, some areas of foreign investments are exempted from the liability of payment of same; documents that are exempted in accordance with international agreements and conventional treaties approved by Ethiopian government. The objective of this study article is to show the relationship between incentives and foreign direct investment inflows in developing countries and the Ethiopian context. The thesis employs research methodology that follows conceptual and legal analyses and interpretation in a comparative manner. The meaning and nature of investment incentives under Ethiopian investment laws and other jurisdiction, determinant factors driving and influencing the inflows of FDI under developing counties and Ethiopia are discussed. The dominant model of low income countries/developing countries investment incentive i.e. tax exemption and tax holiday’s contribution and effectiveness in the attracting of FDI, and various economics researchers findings on the relationship between income tax incentives and FDI inflows are critically analyzed with the various laws and Ethiopian investment laws. Finally from the findings of different data we can conclude that weak investment climate cannot back up by providing tax incentives to attract FDI in developing countries and Ethiopia. The findings of the study revealed that tax incentive packages that are employed to attract FDI in developing countries are not in a position to accommodate and fulfill the comprehensive driving factors of the FDI and the interest of investors and host states.

Published in	International Journal of Economy, Energy and Environment (Volume 6, Issue 5)
DOI	10.11648/j.ijeee.20210605.13
Page(s)	98-103
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Foreign Direct Investment, Developing Countries, Investment Incentives

References

[1]	Aron Mijumdor, (2006) “Ethiopian Investment Incentives in the Light of International Investment Law”, Ethiopian Journal of Business & Development, Unity University College, United Nations, International Investment Agreements: Key Issues, volume II, 2004.
[2]	Ethiopian Investment Proclamation no. 769/2012, art. 23.
[3]	Ethiopian Investment Regulation no. 270/2012 art.
[4]	United Nations, International Investment Agreements: Key Issues, Volume II, 2004, PP: 53.
[5]	Mistere Damtew, (2014) effectiveness of tax incentive in promoting investmentin Ethiopia, p-21.
[6]	Klemm, A & Parys (2009), empirical evidence on effects of tax incentives, IMF Working paper, 09/136 (Washington; IMF).
[7]	EIC;(Customer Relationship Management System (CRM) For Ethiopian Investment Commission (EIC) (2017).
[8]	Gibrehiwot Ageba (1999). Investment; (Unpublished).
[9]	Mark B. Baker, “Awakening the sleeping Giant: India and Foreign Direct Investment in the 21st Century,” 15 Indiana International &Comparative Law Review, 389 (2005).
[10]	The 8th Columbia International Investment Conference on Investment Incentives: The good, the bad and the ugly (2013).
[11]	Dr. Sebastian James, Effectiveness of Investment Incentives in Developing countries, Evidence and Policy Implications.
[12]	Falmi, M. R, (2012). Analyzing the relationship between tax holiday and direct investment in Indonesia.
[13]	Massoud, MR (2003). Assessment of FDI incentives in Egypt 0336, Economic research Forum working paper series.
[14]	Francis Kabubi, (2017). Relationship between tax incentives and FDI inflows in Kenya.

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Addisu Hailu Tulu. (2021). The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia. International Journal of Economy, Energy and Environment, 6(5), 98-103. https://doi.org/10.11648/j.ijeee.20210605.13

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Addisu Hailu Tulu. The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia. Int. J. Econ. Energy Environ. 2021, 6(5), 98-103. doi: 10.11648/j.ijeee.20210605.13

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AMA Style

Addisu Hailu Tulu. The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia. Int J Econ Energy Environ. 2021;6(5):98-103. doi: 10.11648/j.ijeee.20210605.13

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@article{10.11648/j.ijeee.20210605.13,
  author = {Addisu Hailu Tulu},
  title = {The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia},
  journal = {International Journal of Economy, Energy and Environment},
  volume = {6},
  number = {5},
  pages = {98-103},
  doi = {10.11648/j.ijeee.20210605.13},
  url = {https://doi.org/10.11648/j.ijeee.20210605.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijeee.20210605.13},
  abstract = {For economic, Social, or foreign direct investment promotion reasons, tax exemptions or incentives are common under tax laws of legal system of different nations. Under Ethiopian stamp duty laws, some areas of foreign investments are exempted from the liability of payment of same; documents that are exempted in accordance with international agreements and conventional treaties approved by Ethiopian government. The objective of this study article is to show the relationship between incentives and foreign direct investment inflows in developing countries and the Ethiopian context. The thesis employs research methodology that follows conceptual and legal analyses and interpretation in a comparative manner. The meaning and nature of investment incentives under Ethiopian investment laws and other jurisdiction, determinant factors driving and influencing the inflows of FDI under developing counties and Ethiopia are discussed. The dominant model of low income countries/developing countries investment incentive i.e. tax exemption and tax holiday’s contribution and effectiveness in the attracting of FDI, and various economics researchers findings on the relationship between income tax incentives and FDI inflows are critically analyzed with the various laws and Ethiopian investment laws. Finally from the findings of different data we can conclude that weak investment climate cannot back up by providing tax incentives to attract FDI in developing countries and Ethiopia. The findings of the study revealed that tax incentive packages that are employed to attract FDI in developing countries are not in a position to accommodate and fulfill the comprehensive driving factors of the FDI and the interest of investors and host states.},
 year = {2021}
}

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TY  - JOUR
T1  - The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia
AU  - Addisu Hailu Tulu
Y1  - 2021/09/15
PY  - 2021
N1  - https://doi.org/10.11648/j.ijeee.20210605.13
DO  - 10.11648/j.ijeee.20210605.13
T2  - International Journal of Economy, Energy and Environment
JF  - International Journal of Economy, Energy and Environment
JO  - International Journal of Economy, Energy and Environment
SP  - 98
EP  - 103
PB  - Science Publishing Group
SN  - 2575-5021
UR  - https://doi.org/10.11648/j.ijeee.20210605.13
AB  - For economic, Social, or foreign direct investment promotion reasons, tax exemptions or incentives are common under tax laws of legal system of different nations. Under Ethiopian stamp duty laws, some areas of foreign investments are exempted from the liability of payment of same; documents that are exempted in accordance with international agreements and conventional treaties approved by Ethiopian government. The objective of this study article is to show the relationship between incentives and foreign direct investment inflows in developing countries and the Ethiopian context. The thesis employs research methodology that follows conceptual and legal analyses and interpretation in a comparative manner. The meaning and nature of investment incentives under Ethiopian investment laws and other jurisdiction, determinant factors driving and influencing the inflows of FDI under developing counties and Ethiopia are discussed. The dominant model of low income countries/developing countries investment incentive i.e. tax exemption and tax holiday’s contribution and effectiveness in the attracting of FDI, and various economics researchers findings on the relationship between income tax incentives and FDI inflows are critically analyzed with the various laws and Ethiopian investment laws. Finally from the findings of different data we can conclude that weak investment climate cannot back up by providing tax incentives to attract FDI in developing countries and Ethiopia. The findings of the study revealed that tax incentive packages that are employed to attract FDI in developing countries are not in a position to accommodate and fulfill the comprehensive driving factors of the FDI and the interest of investors and host states.
VL  - 6
IS  - 5
ER  -

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Author Information

Addisu Hailu Tulu

Law and Development Department, Arsi University School of Law, Assella, Ethiopia

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APA Style

Addisu Hailu Tulu. (2021). The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia. International Journal of Economy, Energy and Environment, 6(5), 98-103. https://doi.org/10.11648/j.ijeee.20210605.13

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ACS Style

Addisu Hailu Tulu. The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia. Int. J. Econ. Energy Environ. 2021, 6(5), 98-103. doi: 10.11648/j.ijeee.20210605.13

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AMA Style

Addisu Hailu Tulu. The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia. Int J Econ Energy Environ. 2021;6(5):98-103. doi: 10.11648/j.ijeee.20210605.13

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@article{10.11648/j.ijeee.20210605.13,
  author = {Addisu Hailu Tulu},
  title = {The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia},
  journal = {International Journal of Economy, Energy and Environment},
  volume = {6},
  number = {5},
  pages = {98-103},
  doi = {10.11648/j.ijeee.20210605.13},
  url = {https://doi.org/10.11648/j.ijeee.20210605.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijeee.20210605.13},
  abstract = {For economic, Social, or foreign direct investment promotion reasons, tax exemptions or incentives are common under tax laws of legal system of different nations. Under Ethiopian stamp duty laws, some areas of foreign investments are exempted from the liability of payment of same; documents that are exempted in accordance with international agreements and conventional treaties approved by Ethiopian government. The objective of this study article is to show the relationship between incentives and foreign direct investment inflows in developing countries and the Ethiopian context. The thesis employs research methodology that follows conceptual and legal analyses and interpretation in a comparative manner. The meaning and nature of investment incentives under Ethiopian investment laws and other jurisdiction, determinant factors driving and influencing the inflows of FDI under developing counties and Ethiopia are discussed. The dominant model of low income countries/developing countries investment incentive i.e. tax exemption and tax holiday’s contribution and effectiveness in the attracting of FDI, and various economics researchers findings on the relationship between income tax incentives and FDI inflows are critically analyzed with the various laws and Ethiopian investment laws. Finally from the findings of different data we can conclude that weak investment climate cannot back up by providing tax incentives to attract FDI in developing countries and Ethiopia. The findings of the study revealed that tax incentive packages that are employed to attract FDI in developing countries are not in a position to accommodate and fulfill the comprehensive driving factors of the FDI and the interest of investors and host states.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - The Relation of Investment Incentives and Inflow of FDI: Case of Developing Countries and Ethiopia
AU  - Addisu Hailu Tulu
Y1  - 2021/09/15
PY  - 2021
N1  - https://doi.org/10.11648/j.ijeee.20210605.13
DO  - 10.11648/j.ijeee.20210605.13
T2  - International Journal of Economy, Energy and Environment
JF  - International Journal of Economy, Energy and Environment
JO  - International Journal of Economy, Energy and Environment
SP  - 98
EP  - 103
PB  - Science Publishing Group
SN  - 2575-5021
UR  - https://doi.org/10.11648/j.ijeee.20210605.13
AB  - For economic, Social, or foreign direct investment promotion reasons, tax exemptions or incentives are common under tax laws of legal system of different nations. Under Ethiopian stamp duty laws, some areas of foreign investments are exempted from the liability of payment of same; documents that are exempted in accordance with international agreements and conventional treaties approved by Ethiopian government. The objective of this study article is to show the relationship between incentives and foreign direct investment inflows in developing countries and the Ethiopian context. The thesis employs research methodology that follows conceptual and legal analyses and interpretation in a comparative manner. The meaning and nature of investment incentives under Ethiopian investment laws and other jurisdiction, determinant factors driving and influencing the inflows of FDI under developing counties and Ethiopia are discussed. The dominant model of low income countries/developing countries investment incentive i.e. tax exemption and tax holiday’s contribution and effectiveness in the attracting of FDI, and various economics researchers findings on the relationship between income tax incentives and FDI inflows are critically analyzed with the various laws and Ethiopian investment laws. Finally from the findings of different data we can conclude that weak investment climate cannot back up by providing tax incentives to attract FDI in developing countries and Ethiopia. The findings of the study revealed that tax incentive packages that are employed to attract FDI in developing countries are not in a position to accommodate and fulfill the comprehensive driving factors of the FDI and the interest of investors and host states.
VL  - 6
IS  - 5
ER  -

Copy | Download