| Summary: | Foreign Direct Investment, in spite of several challenges, is hailed as one of the
vehicles for economic development, especially in developing countries. In the
tourism industry, FDI brings much needed capital, technology, marketing skills
and operations systems that would otherwise not be available in the host country.
Both developed and developing countries are always competing to attract FDI to
their countries.
The primary goal of this study was therefore to investigate factors that investors
consider when undertaking FDI into the tourist accommodation sector in Malawi.
Malawi remains one of the few countries in Africa which has not attracted
meaningful FDI into its tourist accommodation sector. The objective of the study
is fourfold; to analyse foreign direct investment, to identify country and industry
level factors that influence tourism FDI, to analyse Malawi's general investment
climate and to make recommendations to government and industry on attracting
FDI.
The study conducted a literature study on general FDI and tourism-specific FDI
and the Malawi investment climate. An empirical study was carried out, through a
quantitative research method. The sample was derived using a probability
sampling method and was extracted from a national tourist accommodation
database.
The research found that there is a strong relationship between the source country
of tourist accommodation FDI in Malawi and tourist source countries. It also found
that economic factors, perception and infrastructure, government policy,
competitiveness and nature are important considerations when investing in the
Malawi tourist accommodation sector, in that order. Industry level factors that
respondents found important are protection of investment, availability of fresh
water, labour disturbances I unrest and tourist receipts. Whilst the Malawi
government uses investment incentives as a key to FDI attraction, researchers
found that incentives are not ranked as important to prospective investors. === MCom (Tourism Management), North-West University, Potchefstroom Campus, 2012
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