R. Chitrakar et J. Weiss, FOREIGN-INVESTMENT IN NEPAL IN THE 1980S - A COST-BENEFIT EVALUATION, Journal of development studies, 31(3), 1995, pp. 451-466
During the 1980s, like many other developing countries Nepal attempted
actively to attract direct foreign investment. This article reports t
he results of a survey of the foreign-owned firms in operation at the
end of the 1980s. The motives of firms for their investment decisions
in Nepal are summarised. The impact of foreign investment is assessed
quantitatively using both financial and economic cost-benefit criteria
. In general, it appears that foreign investment has been beneficial t
o both the foreign investors and the national economy. Foreign investo
rs from India have played a particularly important role. However, much
of the national returns from foreign investment is derived from the p
ayment of taxes, so that an excessively generous policy of tax incenti
ves may not maximise national returns.