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Student Name: DIMANTHA MATHEW

Student ID: 200909026

Title of Report: ANALYSIS ON ATTRACTING FDIS INTO SRILANKA

Module Code: PPEC 140 Module Name: INTERNATIONALBUSINESS

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Module Name: INTERNATIONAL BUSINESS

Student Name: DIMANTHA MATHEW

Student ID No: 200909026

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Topic of Assignment: ANALYSIS ON ATTRACTING FDIS INTO SRI LANKA

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HIGHEREDUCATION

ANALYSIS ON ATTRACTING FDIS INTO SRI LANKA

By

DIMANTHA MATHEW

Student ID: 200909026

INTERNATIONAL BUSINESS

IMPERIAL INSTITUTE OF HIGHER EDUCATION

Validated Centre for

UNIVERSITY OF WALES UK

Date: 03.12.2010


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PPEC 140 Master of Business Administration (MBA) Page | 5

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TableofContents

INTRODUCTION .................................................................................... 6

CHAPTER 1: OVERVIEW ON FOREIGN DIRECT

INVESTMENTS ............................................................ 7

1.1 What is Foreign Direct Investments ................................................................. 7

1.2 Methods and Types of FDIs ............................................................................. 8

1.3 Benefits of FDIs ............................................................................................... 9

CHAPTER 2: ATTRACTING FOREIGN DIRECT

INVESTMENTS .......................................................... 13

2.1 Political and Economic Stability .................................................................... 13

2.2 Fiscal and Financial and Other Incentives ..................................................... 15

2.3 Infrastructure Required .................................................................................. 15

2.4 Other Requirements ........................................................................................ 16

CHAPTER 3: SRI LANKA AND FOREIGN DIRECT

INVESTMENTS .......................................................... 17

3.1 Global FDI Outlook ....................................................................................... 17

3.2 Sri Lankas Position ....................................................................................... 19

3.3 The influence from SAARC Region .............................................................. 22

3.4 Sri Lankas Advantages over India ................................................................ 24

CHAPTER 4: CONCLUSION ............................................................ 26

REFERENCES ...................................................................................... 27


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INTRODUCTION

The context of the report analyzes and evaluates foreign direct investments and its

impact on Sri Lanka.

The report defines and understands foreign direct investments and highlights the

benefits of these investments to a country like Sri Lanka. It also identifies the relevant

requirements and the necessary infrastructure that needs to be in place to attract FDIs.

The study area recognizes Sri Lankas position in attracting FDIs and the impact of

the SAARC region. Further consideration have been enlightened in relation to India

being a BRIC country, the effect it would have on Sri Lanka and the comparative and

absolute advantages Sri Lanka would have over India.

Research for this report has been conducted via gathering of data from books,

journals, articles and websites.

With the view of gathering further insights, an interview was conducted with Prof,

Indraratne, a well renowned and respected economist in the country.


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CHAPTER 1

OVERVIEW ON FOREIGN DIRECT INVESTMENTS

1.1 What are Foreign Direct Investments?

Foreign direct investment, in its classic definition, is defined as a company from one

country making a physical investment into building a factory in another country. The

direct investment in buildings, machinery and equipment is in contrast with making a

portfolio investment, which is considered an indirect investment.

Graham, J.P. and Spaulding, R. B. (2004)

FDI or Foreign Direct Investment is any form of investment that earns interest in

enterprises which function outside of the domestic territory of the investor. For aninvestment to be regarded as an FDI, the parent firm needs to have at least 10% of

the ordinary shares of its foreign affiliates. The investing firm may also qualify for an

FDI if it owns voting power in a business enterprise operating in a foreign country.

(www.economywatch.com)

Hill and Jain (2009) state that, foreign direct investment occurs when a firm directly

facilitates to produce and / or market a product in a foreign country.

Once an enterprise enters another country for the above purpose or in other

undertakes an FDI such a firm could be recognized as a multinational enterprise. Coca

Cola Company which is one of the biggest multinationals in the world operates in

over 200 countries.

FDIs could be classified as horizontal and vertical FDIs. Horizontal FDI is where the

firm invests in the same industry as in the home country. Firms prefer establishing

operations through FDIs compared exporting or licensing due to different reasons.


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The main reason for this question is transportation costs, especially when it is a long

distance the high transportation cost added on to the production cost makes it

commercially unprofitable.

Further the high importation taxes in countries that the products are exported to may

act as an impediment for exportation of the products. Also the parent may not want to

license because they may loose their edge from technological and / or market and / or

any other field.

In addition companies may also prefer horizontal FDIs due to strategic reasons such

as to take advantages of oligopoly markets.

Vertical FDIs has two forms, namely, backward vertical FDIs and forward vertical

FDIs. Backward vertical FDI is where the investment is made in company that could

provide the inputs for the existing business. Forward vertical FDI is where investment

is made in a firm which could sell the products that are produced by the existing firm.

1.2 Methods and Types of Foreign Direct Investments

According to CUTS Centre for International Trade, Economics & Environment, firms

may invest as FDIs in 3 different methods.

First it could be through equity capital where the firm purchases shares of a company

of another country. Secondly the foreign firm may reinvest its share of earnings that

are not remitted back as dividends in the host country itself. Finally FDIs may be

provided in the form of working capital where the parent company may provide short

term or long term borrowings to the firm in the host country.


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Hill and Jain (2009), identifies two main types of FDIs. One is Greenfield investment

which is where a firm would

sets up operations in a foreign

country. A perfect example

would be Nestle starting up its

operations in Sri Lanka or

Unilever setting up operations

in Sri Lanka.

The second type of FDIs would

be where a firm acquires or

mergers with an entity in a

foreign firm. Al-Futtaim

Engineering, a Dubai based

conglomerates acquisition of

the Singaporean retailer,

Robinson Group and the

acquisition of the Sri Lankan based automobile dealer, Associated Motorways would

represent examples of FDIs through acquisition.

1.3 Benefits of Foreign Direct Investments

Foreign Direct Investment to a country would lead to a number of benefits. The

benefits could be listed down as follows:

1.3.1 Resource Transfer Effects

FDIs into a country positively affects the country as the foreign company is likely to

introduce new capital, technology and management resources which would have not

been available in the country.

(Fig: 1, Quarterly FDI inflows of 36 selected economies,Source: UNCTAD, 2010)


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Capital is one of the main resources that would be introduced by a firm undertaking

FDIs. According to Hill and Jain (2009) due to the size and financial strength of these

large multinationals they may have the financial resources which the country might

not have. The funds that are available to this firm, could be internal company funds or

funds borrowed through capital markets which would be much more easier for these

firms than the firms in the host nation.

The technological progress is also a major advantage for the host nation. It would

assist to increase productivity of the firm, thereby leading to economic growth. The

introduction of new technology may even revolutionise the industry leading to a rapid

technological advancement.

This was quite apparent in the telecom sector in Sri Lanka where Dialog and Mobitel

were competing on the introduction of new technology.

Management resources another advantage for the host country, as foreign managers

trained in the latest management techniques would help to improve efficiency and

productivity of the organization.

These foreign managers are likely to introduce the latest management techniques to

our skilled and unskilled labour whom have been recruited from the home country.

Thereby the knowledge on the latest management techniques would trickle down

work force of the host nation.

1.3.2 Employment Effects

With FDIs the creation of new jobs through opening of new companies or via

expansion of the existing firms should be identified as a major advantage for the host

nation. As a result the demand for labour increases in the host nation.


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The increase in demand for labour would lead to wage hikes as well. In a country like

Sri Lanka this would further reduce the unemployment level and also lead to a decline

in the poverty level in the country.

In addition to the creation of direct employment opportunities the setting up of new

ventures would give rise to employment opportunities indirectly as well with the

creation or expansion of local suppliers.

1.3.3 Balance of Payments Effects

FDIs would positively impact the balance of payments position firstly with initial

capital inflows which benefits the capital account of the host nation. Secondly if the

goods or services produced through the FDI are a substitute for imports it would

improve the balance of payments of the host country.

Thirdly the host nation also benefits if the if the foreign subsidiary is a export oriented

company which increase the overall exports of the host country improving the balance

of payments position.

Stretchline company in Sri Lanka is a joint venture between Stretchline Holdings,

which is a foreign multinational and MAS which uses the Sri Lankan subsidiary to

export the production all around the world improving Sri Lankas balance of

payments position.

As a result for a country like Sri Lanka FDIs play a vital role with Sri Lanka

constantly having a current account deficits. Not only does initial capital inflow help

the position but depending on how the cash is spent it may lead to increase in exports

or a decrease in imports if the product or service is a substitute of an import.


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1.3.4 Effect on Competition and Economic Growth

Hill and Jain (2009) recognise that FDIs in the form of Greenfield investments would

increase the number of players in the market which would give rise to higher level of

competition. This may assist upgrading of the quality level of the products in the

whole market. Further it may lead to a decline in prices in the consumer market

leading increase in economic welfare for consumers.

With the increase in the number of players in the telecom sector in Sri Lanka, a

drastic reduction of call charges were observed which was beneficial for the

consumers leading a strong growth in the call volumes in the long run.

Further the decline in communication charges helped the long term prospects of the

economy leading to economic growth. Communication requirement is a vital aspect of

any economy.

In addition FDIs could lead to growth in productivity, innovations and introduction of

new products and processes which improves the economic growth of a country.

1.3.5 Effect on Government Revenue

Another major aspect of FDIs mainly in the form of Greenfield investments is its

impact on tax revenue. These investments would enhance the business activities of the

country leading increase in tax revenue for the government.

Investments in the form of Mergers and Acquisitions would help this aspect if the

acquirer manages to increase profitability or expand the business operations leading to

increase in the business activity where again it would lead increase in tax revenue.

This is one of the major reasons for successive Sri Lankan governments to provide

various programs to attract FDIs to the economy.


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CHAPTER 2

ATTRACTING FOREIGN DIRECT INVESTMENTS

There are number of essential requirement that a country needs to focus on if it is

interested in attracting foreign direct investments. In a foreign investors perspective

he or she would be looking at different aspects in accessing whether a country would

be suitable for investment. It will also depend on the companys risk appetite and type

of concessions that they perceive.

2.1 Political and Economic Stability

Political stability is one of the primary concerns of foreign investors. Political change

or government changes would generally bring changes in policy and strategy for the

particular country. If the particular government has a completely new ideology it may

change long term vision for the country as well.

This is a significant risk for the foreign investor because if the investor undertakes

FDIs in the country it would be for a longer term. If there is political instability the

business environment in that country will not be great as there would continuous

changes in rules, procedures and policies.

There is also a chance of government which is not foreign investor friendly. In such a

situation restrictions may be imposed on foreign ownership and foreign investments.

The report released by the Organization for Economic Co-operation and Development

(OECD) (2001), Anabel Gonzlez highlighted the case of Intel in Costa Rica.

According to the case Intel has short listed 4 countries Brazil, Chile, Costa Rica and

Mexico in order to locate a semiconductor assembly and testing plant.

Costa Rica was chosen over the other 4 countries primarily because of its long history

of political and social stability. In addition to this the government of Costa Rica has


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2.2 Fiscal and Financial and Other Incentives

Foreign firms considering FDIs would be looking at the incentives offered by that

particular country very seriously as the companies would want to maximize their

return on investment and to recover their investment as soon as possible. In providing

incentives for FDIs there are different types of incentives governments can offer.

Fiscal incentives would amount to the reduction in taxes for FDIs and tax reductions

available for the specific industry and any other incentives on taxes.

Governments in order to promote FDIs could offer different types of financial

incentives. Mehta and Dugal (2003) of CUTS Centre for International Trade,

Economics & Environment identifies that these financial incentives are offered as

government grants, credit subsidies, duty free import of materials, government equity

participation and insurance at preferential rates.

Setting up of free trade zone and export processing zones are also an attraction for

foreign investors as all types of facilities and incentives are already provided t these

zones. Further easy access routes to the ports and air ports also may be creates

specially for these zones.

2.3 Infrastructure Required

Infrastructure facilities of a country plays a vital role in supporting FDIs and business

as a whole. Basic infrastructure such as electricity, water, road network andcommunication network is required at least in the areas where FDIs are attracted.

If these basic facilities are not available and the trouble to make them available is

high, then foreign investors would be less interested in the location. Even things such

as storage facilities, cost involved in doing business including customs clearing and


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investment approvals and even proper regulatory and legal framework covering

intellectual property rights are the other supporting areas relating to infrastructure that

gains foreign investor attention.

Further the level and type of natural and human resources would also be important

criteria to concentrate. A high concentration of high skilled labour force would be a

big attraction for the BPO ventures searching FDI opportunities. Certain unique

natural resources would also be important for a country in promoting FDIs.

2.4 Other Requirements

The supporting services in an economy would create the edge for a in attracting FDIs.

Hassel free procedure to start up businesses and to do business creates an untold

advantage.

Further a healthy banking system which are well capitalized and governed by proper

procedure is very important for a economy and creates an investor friendly

atmosphere in the country.

Having a large domestic market is in itself a attraction for FDIs, but the governments

should concentrate to focus the FDIs into areas that require foreign investment and

their skills and knowledge.


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CHAPTER 3

SRI LANKA AND FOREIGN DIRECT INVESTMENTS

3.1 Global FDI Outlook

With the global economic crisis in 2008 sharp decline in global trade was witnessed

leading to a significant reduction in FDIs.

The United Nations Conference on Trade and Development (UNCTAD) estimates

that the global foreign direct investments as at 2008 stood at US $ 1.7 Trillion which

was a decline of almost 14%. The UNCTAD states that FDIs in 2009 dropped as

much as 39% to US $ 1 Trillion.

(Table: 1, Global FDI Flows, Source: UNCTAD, World Investment Report, 2009)


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(Table: 2, FDI Inflows and Cross Border M&As, Source: UNCTAD, World InvestmentReport, 2009)

FDI Inflows and Cross Border M&As


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Asean Investment Report 2009 identifies that the decline of FDI flows in 2008 has

been uneven where the developed countries have experience a significant dip

amounting to almost 29% while the developing countries across all regions have been

resilient recording a growth rate of 17%.

This reflected a decline of cross

border Mergers and

Acquisitions and Greenfield

project while a rise in

divestments were apparent.

However in 2009, UNCTAD

notes that the decline in FDIs

were widespread affecting all

regions. The FDIs of developed

nations continued with the

downfall as FDIs dropped a

further 41%. In contrast to

2008, in 2009 the FDIs to the

developing and transition

economies registered a decline

of 39%.

UNCTAD reports that cross border Mergers and Acquisitions fell almost 66% while

the international Greenfield projects dipped 23%.

3.2 Sri Lankas Position

With Sri Lanka adopting market oriented economic policies a couple of decades ago a

steady growth in foreign inflows were seen. From time to time Sri Lanka has

(Fig: 3, Value and Number of Cross Border M&As andGreenfield FDI Projects, Source: UNCTAD, 2010)


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liberalized its restrictions in order to create an investor friendly atmosphere to the

foreign investors.

Currently Sri Lanka has no restrictions on the repatriation of earnings, profits, and

capital proceeds (http://www.tradechakra.com). Attractive fiscal incentives are

granted to selected investments and industries. Sri Lanka awards attractive packages

for extensive use of foreign capital or sophisticated technology, in export-oriented

manufacturing, and in large- scale infrastructure projects.

In different era in the last 3 decades Sri Lanka has created 6 free trade zones

consisting of Katunayake (1978), Biyagama (1986) Koggala (1991) Pallekelle (1996)

Mirigama (1997) and Malwatte (1997) in which Sri Lanka accommodates over 155

foreign export oriented firms.

With these incentives Sri Lanka managed to grow its FDIs gradually over the last

decade with the FDIs peaking in 2008 amounting to US $ 889 Million.

In 2009 Sri Lanka ended its 3 decade long war giving rise to thoughts of brighter

economic conditions. Making this a reality the macro economic conditions within the

country improved significantly led by low inflation and interest rates, sharp increase

in foreign exchange reserves, strong growth in consumer demand.

Sri Lanka was granted the IMF standby facility in mid 2009 as well amounting to US

$ 2.6 Billion. In addition Sri Lanka successfully completed US $ 500 million

Eurobond issue in October 2009 and US $ 1 Billion Sovereign Bond issue in

September 2010 which were overwhelmingly oversubscribed indicating high global

investor confidence.

However with the global downturn despite the above mentioned developments FDI

figures started witness a drastic decline from 2009. In 2009 FDIs fell 32% to US $

602 Million. With the recessionary environment continuing in the world Sri Lankas


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FDIs continued to decline in 2010 as well. For 2010 1st FDIs declined 16.8% to US $

208 Miilion compared to US $ 250 Million in 1st half of 2009.

In 2010 the telecom sector continued to lead the way with FDIs amounting to US $

85m and the manufacturing sector following by attracting FDIs of US $ 56 Million.

(Table: 3, FDI Overview, Source: UNCTAD, World Investment Report, 2010)


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3.3 The influence from SAARC Region

De Mel (2010) highlights that; South Asia has been looking at regional economic

integration since early 1990s. The countries agreed to sign South Asian Preferential

Trade Agreement (SAPTA) in 1995. After signing of SAPTA, the idea of South Asian

Free Trade Agreement (SAFTA) emerged in 1996. However the talks came to a

deadlock with India and Pakistan competing with nuclear tests in 1998.

Sri Lanka has signed bilateral agreements for free trade with India which is known as

Indo-Sri Lanka Free Trade Agreement (ILFTA). Following this in 2005, Sri Lanka

signed a free trade agreement with Pakistan, identifies as the Pakistan-Sri Lanka Free

Trade Agreement (PSFTA).

(Table: 4, Inward FDI Performance & Inward FDI Potential Index, Source: UNCTAD, WorldInvestment Report, 2010)

(Table: 5, Cross Border M&A Overview, Source: UNCTAD, World Investment Report, 2010)

Economy Economy

2007 2008 2009 2007 2008 2009

Azerbaijan 140 135 111 Tajikistan 111 112

Finland 68 139 112 Nicaragua 109 113

Germany

107 127 113 Sierra

Leone

122 114

Spain 76 59 114 Mozambique 110 115

Greece 132 118 115 Yemen 116 116

SriLanka 118 108 116 SriLanka 119 117

Lithuania 65 69 117 UnitedRepublicofTanzania 117 118

UnitedStates 116 99 118 Sudan 121 119

Indonesia 120 109 119 Bangladesh 118 120

Iran,IslamicRepublicof 133 130 120 Myanmar 114 121

Bangladesh 130 115 121 Zambia 126 122

InwardFDIPerformance InwardFDIPotentialIndex

Region/economy 19952005 2007 2008 2009 19952005 2007 2008 2009

(Annualaverage) (Annualaverage)

SriLanka 52 6 370 36 12 6

MemorandumIndia 584 4,405 10,427 6,049 612 29,083 13,482 291

Maldives 3

SouthAsia 942 5,371 12,654 6,094 620 29,096 13,488 291

AsiaandOceania 19, 142 71, 657 68, 167 38, 295 18, 927 94, 743 95, 167 67, 534

Developingeconomies 40,624 100,381 104,812 39,077 25,868 144,830 105,849 73,975

World 357,132 1,022,725 706,543 249,732 357,132 1,022,725 706,543 249,732

Sales(net) Purchases(net)

Crossbordermergerandacquisitionoverview,19952009(MillionsofDollars)


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Thereby Sri Lanka has already signed agreements for free trade with both the major

economies in the region. As a result Sri Lanka, being a small country is at a major

advantage due to these agreements. These agreements would benefit Sri Lanka

immensely in attracting FDIs.

Sri Lankas trade with over the years have favoured India and before the signing of

the FTA in 1999 import to export ratio with India was as high as 10.5:1. This was not

compensated by the investment flows either where FDIs from India in 1998 stood at

US $ 2.5 Million accounting for only 1.3% of FDIs.

With the ILFTA in 1999, things took a dramatic turn with exports from Sri Lanka

rising faster than the imports from India significantly reducing the trade deficit where

in 2006 the import to export ration declining to 4:1. Similar effect was seen in the

FDIs from India as well where the cumulative FDIs from India amounting to US $

191 Million which accounts for 8.3% of the total FDIs received by Sri Lanka. (De

Mel, 2010).

De Mel (2010) explains that though PSFTA was implemented in 2005 is yet not fully

operational and the complete tariff liberalization was supposed to be in 2010.

However so far the Sri Lankas side of the bargain has not been positive as the higher

focus seems to be on ILFTA.

Both India and Pakistan are interested in extending the FTA agreements into

Comprehensive Economic Partnership Agreement (CEPA). The CEPA agreement

with India to be signed in July 2008, but however was delayed.

If Sri Lanka goes ahead to sign the CEPA agreements with both India and Pakistan,

Sri Lanka would be at a greater advantage in attracting FDIs. Already Sri Lanka

possesses and advantage with the FTAs, but the CEPA would make Sri Lanka a

greater attraction.


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Since Sri Lanka lacks the critical mass required by global markets Sri Lanka should

push the region through SAARC to build a regional positioning to attract the FDIs. Sri

Lanka needs to focus on becoming the entry point or the access point to the region.

Therefore the focus needs to be on becoming the hub of South Asia. Thereby Sri

Lanka would be positioned in a much more attractive way in order to win FDIs.

For example Singapore plays such an important role in South East Asian region where

it acts as the hub, where Singapore operates as the intermediary within the region and

exports high value goods within and outside the region. Singapores open economy,

efficient trade handling and marketing capability give it the edge over other

economies in the region. Further the collective action under ASEAN has helped

significantly boost trading activities in the region and has made the region more

attractive for FDIs. (www.mtiworldwide.com)

This is a good strategy Sri Lanka and the region to adopt where Sri Lanka needs to

work closely with the countries in the region building up relationships and developing

the FTAs into CEPAs which would give the opportunity for Sri Lanka to be the

intermediary or hub for the South Asian Region.

3.4 Sri Lankas advantages over India

With India being one of the BRIC countries there is a natural tendency for foreign

investors would be choosing India mainly due to Indias large domestic market.

Despite abovementioned factor there are a number of other factors that gives Sri

Lanka comparative advantage over India and in certain instances Sri Lanka would

have an absolute advantage over India as well.


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With Sri Lanka having signed FTAs with both India and Pakistan clearly amounts to

an absolute advantage Sri Lanka to attractive as a FDI destination. This would give

the opportunity for any business tap both Indian and Pakistani markets through Sri

Lanka.

Further Pakistan has signed an FTA with China. Sri Lanka could convert this to a

strength where any business in Sri Lanka could tap the Chinese market as well

through Pakistan. This would mean that any business would have the opportunity to

tap India, Pakistan and China through these FTAs.

Thereby it could stated that Sri Lanka has an absolute advantage over India with

availability to tap 3 large markets through FTAs.

Sri Lanka is located in a geographically strategic location which the centre separating

the East and the West. Over 200 ships pass the southern Sri Lanka each day. Due to

this strategic location Sri Lanka could be promoted as a transportation hub. This

would again give Sri Lanka an absolute advantage over India when it comes

transporting goods.

Sri Lanka would be an attractive and ideal location for any business having exports

and imports from and to all round the world. It is a great opportunity for most of the

multi nationals.

Further companies providing transportation and transportation services would clearly

prefer Sri Lanka over India due to its strategic location. With the Hambantota port

opening the opportunity has become far more attractive.

Sri Lanka would have a comparative advantage over India when it comes to tea due to

its high quality. Thereby for large tea companies round the world, Sri Lanka would be

a very attractive destination with its brand image on high quality tea.


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CHAPTER 4

CONCLUSION

FDIs are one of the most important parts of an economy. However, despite being an

attractive destination for FDIs, the amount of FDIs has declined during the past 2

years.

Though this could be attributed to the global recession, it is necessary to note that Sri

Lanka has not been marketed signify its true potential to the world. This is a majordisadvantage for the country.

With the large number of infrastructure projects that take place in the country the

problem of the deficiency proper transportation network within the country os slowly

fading away.

However Sri Lanka still takes almost 3 years to approve an FDI and by the time

approval is granted they have found alternative locations. This is a major drawback

for the country.

In order to deal with this issue the Government now is planning to bring in new

legislation to simplify and fast track the process.

By solving these deficiencies Sri Lanka should look to market itself highlighting its

assets such as the strategic location and FTAs. Further Sri Lanka should push the

regional organization, SAARC, to promote the regional marketing in order to attract

FDIs to the region.

These measures are likely to improve Sri Lankas image and attract FDIs at a faster

pace into Sri Lanka.


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REFERENCES

Anabel Gonzlez (2001), Key drivers for investing in Costa Rica: The IntelExperience, Global Forum on International Investment, OECD, Organization for

Economic Co-operation and Development

Asean Investment Report 2009, Sustained FDI Flows Dependent on GlobalEconomic Recovery, Asean Publications

De Mel, Deshal (2010), Bilateral Free Trade Agreements in SAARC andImplications for SAFTA, Chapter 4 of Promoting Economic Coorperation in

South Asia : Beyond SAFTA, edited by Ahmed, S., Kelegama, S. and Ghani, E.,

Sage Publications, New Delhi

Foreign Direct Investment (FDI), http://www.economywatch.com/foreign-direct-investment/, Accessed on 03rd December 2010

Graham, J.P. and Spaulding, R. B. (2004), Understanding Foreign DirectInvestments, JPG Consulting,

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global.com/articles/understanding_foreign_direct_investment.htm, Accessed on

03rd December 2010

Hill, C.W.L. and Jain, A.K. (2009), International Business : Competing in GlobalMarketplace, 6th Edition, Tata Mcgraw-Hill Publishing, New Delhi


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Mehta, P. S. and Dugal, M. (2003), ABC of FDI : Monographs on Globalisationand India Myths and Realities, #3, CUTS Centre for International Trade,

Economics & Environment, CUTS, Jaipur, India

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www.mtiworldwide.com/index.php/component/k2/item/download/13, Accessed

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Trade Chakra, FDI in Sri Lanka, http://www.tradechakra.com/economy/sri-lanka/fdi-in-sri-lanka-337.php, Accessed on 03rd December 2010

United Nations Conference on Trade and Development (UNCTAD), Global andRegional FDI Trends in 2009, Global Investment Trends Monitor, No. 2, Geneva:

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