Influence Of Political Risk On The Joint Venture Equity Share In Foreign Direct Investments In Republic Of Macedonia

The thesis explores the nature and determinants of foreign direct investment (FDI) in a developing country, in this case Republic of Republic of Macedonia. Overall, the thesis makes four main contributions.First, it analyzes the nature of FDI in Republic of Macedonia since the programme form FDI attraction was lunched and also the thesis highlights the important industries for FDI. It also shows the situation in present time and FDI attraction programmes by the government of Republic of Macedonia.Second, following the review of the literature on the determinants of FDI, this thesis analyzes the characteristics of the investors by cumulating the data at the country level. It locate that a wide range of aspects affect the number of foreign investment projects, such as:size, distance, economic freedom and past investment levels.Third, it analyzes the effect of country political risk on the foreign equity share in joint venture (JV). Here, the results showed that severe risk may actually increase the foreign equity share, which is attributed to the benefits that ownership brings in the form of control. Further, those projects in minority foreign ownership appear most sensitive to risk. These results contribute to a literature, which to date has focused almost solely on the FDI entry mode either as whole or joint venture.Fourth, we will attempt to construct an analytical-quantitative model that enables researchers in the fields of political science and business administration, in an interdisciplinary effort, to measure the political risks involved in any FDI.