TITLE: Managing Investment Promotion Agencies. Comparative study of Invest Sweden and Ethiopian Investment Agency.

LEVEL: Master’s Thesis in Business Management.

AUTHORS: Heron Desalegn & Diego Ferrer.

SUPERVISOR: Akmal Hyder, Ph.D.

DATE: April, 2013.

AIM: Investment promotion agencies (IPAs) nowadays play an active role to attract foreign direct investment into their respective countries. IPAs management has strategic influence in the success of national strategic goals for economic development. In this research we aim to explore how the Swedish and Ethiopian investment promotion agencies are managed in relation to the World Bank`s Multilateral Investment Guarantee Agency`s (MIGA) Investment Generation framework, which is esteemed highly by investment promotion agencies worldwide. In addition to the application of this framework we aim to find what can both agencies learn from each other and the MIGA.

METHODOLOGY: In this research we have adopted a qualitative method to collect primary data through semi structured interviews with investment promotion management executives. To enhance the richness of the study secondary data sources has been used, primarily the Investment Generation framework developed by the MIGA and secondly scientific articles and books.

RESULTS & CONCLUSION:  The results of our research have shown that both agencies are undertaking restructuring activities to optimize their investment promotion. In addition it was found that Invest Sweden (IS) practices a much more tailor-made efficient and effective investment promotion compared to Ethiopian Investment Agency (EIA) which is progressive  but still at an initial phase at a developing phase on promotional activities.

SUGGESTIONS FOR FUTURE RESEARCH:  Unlike other fields of business management studies, the availability of scientific research, journals and books is limited on IPAs, therefore existing literature on the field should be expanded. In addition MIGA framework modules can be further explored separately to ensure rich literature about every aspect of IPAs management. The decision of the Swedish government to merge Invest Sweden and the Trade Council suggests that future researches can examine the merge of investment and export promotion functions. Evidence from the Swedish agency shows the positive influence of solid aftercare services over high-value re-investments, therefore future researchers have the chance to investigate the nature and possible existence of this connection in other countries. As there are substantial differences between Sweden and Ethiopia future comparative studies can adopt a different scope by investigating IPAs from homogeneous countries.

CONTRIBUTIONS OF THE THESIS:  The practices and management of IPAs is a dynamic process that changes along with the economic and political trends of the host country. To cope up with the ever changing environment, a nation´s IPA needs to benchmark its strategies, operations, and results with other IPAs regardless of the level of development by the nations. This paper provides a learning base by comparing the Invest Sweden (IS) and Ethiopian Investment Agency (EIA) practices. In addition each IPA´s practice is analyzed with respect to the MIGA framework thus helping to benchmark with the globally recognized practices of investment promotion.

KEY WORDS: Foreign Direct Investment (FDI), Investment Promotion Agencies, (IPAs), Invest Sweden (IS), Ethiopian Investment Agency (EIA), and Multilateral Investment Growth Agency (MIGA).