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

Oyunbadam Davaakhuu (), Kishor Sharma and Yapa M.W.Y Bandara
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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

Global Business Review, 2014, vol. 15, issue 4, 663-675

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.

Keywords: Mongolia; foreign direct investment; openness; WTO (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:globus:v:15:y:2014:i:4:p:663-675

DOI: 10.1177/0972150914543427

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