International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Impacts of Investment Climate on FDIs in the Libyan Economy: Firm-Level Evidence
Dr. Abdulhakim A. Abushhewa, Dr. Tarek Zarook

This study tests the impacts of investment climate factors on increasing FDI inflows in Libya over the period 2000-2015. The study investigated these impacts through four variables: human resources, natural resources, the quality of infrastructure, and the administrative and legal procedures (institutional and regulatory environment) were used to measure the investment climate and its effect on FDI inflows. In this paper, a questionnaire survey method was employed to collect the primary data. The survey was conducted with the foreign companies operating in Libya. The questionnaire sought to examine the foreign investors’ opinions and perceptions of the main issues facing Libyan investment climate. The results obtained were as follows. All investment factors were relevant to Libya. The country is rich in oil and non-oil natural resources. Libya has initiated and even progressed with many reforms and policies. But they failed to increase FDI inflows. This is due to inadequacies of proper governance and implementation and existence of corruption. These were reflected in the administrative and legal dealings. Poor service quality affected utility of improved infrastructure. There is need to bring political and economic stability. Policies to promote non-oil sector with low key promotion of oil sector, utilisation of low cost labour to attract foreign firms and making administrative processes rapid and transparent can improve the current negative FDI situation.

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