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Social receptivity analysis of foreign direct investment in British Columbia Sugiyama, Kayoko

Abstract

This thesis identifies social attitudes toward foreign direct investment (FI) in the province of British Columbia. Historically, regional development in B.C. has largely depended upon the exploitation of natural resources, which attracted heavy inflows of foreign capital to this province. The purpose of this study is to measure individual preferences in B.C. society with respect to the issue of FI, an important component of past economic development. A survey of opinions was carried out among selected societal sub-groups of the population by means of a mailed questionnaire during the summer of 1975. The analysis revealed that the respondents were generally well informed and possessed a basic understanding and knowledge about FI in the province. Contributions of FI to past regional economic development were highly valued, but almost half of the respondents were not in favour of further FI in their regions. This result indicates that for a significant portion of B.C. residents, apart from provincial and local business groups, the present pattern of FI is not satisfactory. Since a majority of respondents perceived the past benefits in terms of economic criteria (such as the provision of employment and higher income levels), their reluctance to favour future investment may be interpreted in different ways. One interpretation is that the people thought the economic benefits generated by FI were not distributed equitably under the current investment pattern. Another is that British Columbians' development goals have been changing with more emphasis on non-economic criteria. A final interpretation is that the residents did not want any FI simply because they had secured their own jobs, which might have been directly or indirectly the result of FI, and thus perceived the issue from a strictly individual welfare viewpoint. The analysis of responses by economic sub-regions lead to the formulation of the following development paradigm: In the urban centre of Vancouver, and the repidly growing Okanagan and Central sub-regions, as well as in the least developed North East, receptiveness to FI were positive; while in the interior sub-regions (where the past FI inflows were the heaviest), the respondents' approval of future FI was lower. Regional analysis also revealed that receptiveness to future FI was frequently inversely related to the existing level of such investment in the host region. Unequal distribution of benefits accruing from FI seemed to be one of the major causes of opinion discrepancies. The capital-intensive nature of FI in resource industries often exacerbated spatial and social inequities. Opinion differences between the respondents from the metropolis and those from the hinterland, between business and union groups, between white collar and blue collar workers, and among various income groups, all suggest that the problem of distribution of benefit is a major factor determining their receptiveness to FI. The provision of employment was a criterion for judging the benefits of FI. The less favourable attitudes indicated by women, people with less formal education, the younger generation, and the old time residents in the province, may well reflect the skewed distribution of employment opportunities generated by past FI projects. For the public sector, strategies for coping with future FI could be approached in two ways: A negative approach suggests use of public initiative for redirection of investment patterns by restrictive measuresrsuch as an enforcement of FI guidelines. Positive approach centres on benefit and employment redistribution policies. The government could advise foreign investors to modify their investment strategies. Recommendations are made to internalize their corporate profits within the project region. The public sector can also generate initiatives in planning for the regions based on an increased emphasis on non-economic factors.

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