Chapter 10: Investment and Trade

Title: Impacts of foreign direct investment on the image of home countries and multinational firms in the transition economy of Kazakhstan

Reference: WORLD SUSTAINABLE DEVELOPMENT OUTLOOK 2006 pp. 305 - 315

Abstract/Summary: This study empirically examines possible correlations between Foreign Direct Investment (FDI) inflows and the image of "home" countries as perceived by the citizen of host-country. Several propositions are also developed to analyse whether the levels of FDI inflows from the 15 foreign countries, selected from the National Bank of Kazakhstan based on their past FDI inflows into Kazakhstan, affect the attitudes of the Kazakh citizens towards these foreign countries. A regression model is further applied to study the attitudinal data obtained from survey questionnaires The analysed results suggest that there are no significant relationships between the amounts of FDI inflows and the attitudes of Kazakh citizens towards these "home" countries from which these FDI inflows originated. The authors speculate that the not-significant results may be due to the poor quality of FDI inflows as well as the fact that these inflows were limited to specific industries, which seemingly skewed to the Greenfield and Brownfield industries in Kazakhstan. The authors suggest that, when the quality of FDI inflows improves, that is, when these inflows are diversified into various manufacturing and service industries that, in turn, create greater impacts on the well being and quality of life of the host citizens. At that time, these FDI inflows should create favourable attitudes of Kazakhstan citizens towards the "home" countries and their firms.

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