Factors encouraging foreign direct investment (FDI) in the wind and solar energy sector in an emerging country

Abstract

This study bridges the current research gap by exploring the determinants of foreign direct investment (FDI) in the renewable energy sector in Bangladesh through the OLI and TCE theories. Based on semi-structured interviews with 13 experts, it investigates the determinants of firms' decision-making processes in the UK, Singapore, USA, Denmark, Thailand, China, and South Korea, conducting FDI in the renewable energy sector in Bangladesh. The results show that the institutional environment assumes the highest weight over macroeconomic and natural conditions for attracting FDI in Bangladesh's wind and solar energy projects. In the macro-economy, economic growth and access to local finance are important in attracting FDI. Contrarily, land availability assumes the highest importance for attracting FDI in the natural condition dimension.

Keywords

• FDI
• Renewable energy
• Solar
• wind
• Emerging country
• Bangladesh