The study analyses the key motives and determinants of FDI in various sectors of the Libyan\ud
economy. It compares the results for the different sectors to determine how the policy of the\ud
Libyan government could be improved in order to increase the benefits for the government\ud
and the country.\ud
A new framework was developed for this research. A qualitative methodology using multiple\ud
case studies was employed. The case study companies comprised eight companies from four\ud
sectors. The four sectors were compared and contrasted using Porter's five forces model. The\ud
analysis of the eight companies had two stages: "within" and "cross-cases" analyses. Data\ud
were gathered through in depth, semi-structured interviews with foreign and local company\ud
managers, and government policy makers. The study also uses data collected from secondary\ud
sources such as company websites, documents and government reports.\ud
The empirical findings reveal the existence of a core of motives and determinants of FDI in\ud
Libya that are common for all parties across all sectors. This finding is surprising in relation\ud
to the similarity across sectors. This might be explained by the uniform government policy\ud
over a relatively stagnant forty-year period. These factors are: market size and growth, high\ud
return on investment and investment incentives, political stability, infrastructure and low\ud
transportation costs, business and industrial linkages, progress of privatisation, institutions,\ud
culture and attractive geographic location. The sector-specific and actor-specific\ud
determinants are however less important than the common ones.\ud
In terms of obstacles to FDI, bureaucratic red tape, infrastructure in terms of Internet,\ud
telephone, and the banking system inhibit FDI inflows in all contexts. The findings of this\ud
study showed also the critical role of the Libyan government in facilitating the process of\ud
FDI. This is probably the first study to incorporate both host government and foreign\ud
investors' views about motives and determinants of FDI