University of Twente Student Theses


Assessing suppliers knowledge on determinants attractive to investors location decisions in industrial parks: The case of Bole Lemi I and Eastern Industrial Parks, Ethiopia

Wasehun, Eden Tsehaye (2021) Assessing suppliers knowledge on determinants attractive to investors location decisions in industrial parks: The case of Bole Lemi I and Eastern Industrial Parks, Ethiopia.

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Abstract:This thesis paper tried to assess suppliers' knowledge on determinants attractive to investors' location decisions in industrial parks. The study targeted two industrial parks in Ethiopia, Bole Lemi I and Eastern Industrial Zone, which the former is public and the latter is a privately owned industry park. As such, it was interesting to study how the understanding of investors’ needs compares across the two ownership spectrums. Based on this, the study examined the potential knowledge gap of policymakers and industrial park suppliers on functions and production factors attractive to investors in Ethiopia and proposed policy recommendations. In order to attract and maintain high-quality private investment, the government of Ethiopia supports and creates a favorable investment climate, including tax holidays, exemption of duty on capital goods and income tax, one-stop-shop services, and ease of access to industrial parks space. On the other hand, Investors consider different factors while making an investment location decision, such as investment incentives, facilities, regulations, and administrative processes. That is why it is extremely important to understand and analyze the factors that influence investors’ investment decisions at two moments of time (before and after the investment). This will guide policymakers and industry park developers to focus their efforts on filling the gap. As a research methodology, the study adopted a case study approach to testing the hypothesis of the study, and it was useful to validate the hypothesis of suppliers' knowledge gap on investors' needs. Regarding the data collection and analysis,a mixed-methods approach was employed to minimize the drawbacks of a single approach. It was used for triangulation of different data sources to ensure fewer biases in answering the research question and objectives. As such: semi-structured questions were used to do interviews with policymakers and industrial park developers; close-ended questions were employed to collect data for quantitative analysis; Google images and site pictures were used to interpret and triangulate the result visually. For data collection, the study required both the secondary and primary data, in which websites, spatial data from Open Street Map, reports, and grey literature as secondary, and semi-structured interviews and surveys as primary. Accordingly, 6 companies from Bole Lemi I and 32 companies from Eastern Industrial Parks have participated. The qualitative data from key informants' interviews were summarized and coded manually using Atlas ti 9 software. The quantitative data from the survey were analyzed and interpreted quantitatively by using descriptive statistics such as frequency and percentages. Finally, the functions and production factors that suppliers consider as private investment attractions in both industrial parks and those that investors consider investing in are analyzed. The perception differences from both sides determined, and the function and production factors that should be given priority in the development of future industrial parks are forwarded. The study found out that there are differences in the perception of functions and production factors from policymakers, industrial park developers, and investors in both industrial parks. The major reason for supplier differences indicated that the location of the industrial parks; (BLIIP located in main urban area and EIP located in a newly urbanized area), characteristics of the industrial parks; (BLIIP is intended for export-oriented industries and EIP mainly focuses on import substitution), and the provision of infrastructures and utilities. With regard to investors' differences across the two industrial parks, investors' nature or motives is mentioned as the main reason. Moreover, the study found out the different functions and production factors important for investors’ investment location decisions. Regarding functions, all infrastructures, utilities, and their cost, and regarding production factors, young, abundant, and low-cost labor, all non-fiscal incentives, security, and political instability are the most important matter to investors' investment location decisions in both industrial parks.
Item Type:Essay (Master)
Faculty:ITC: Faculty of Geo-information Science and Earth Observation
Programme:Geoinformation Science and Earth Observation MSc (75014)
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