7+(52/(2)0,*5$7,21$1'5(0,77$1&(,1 7+('(9(/230(172)52780$ E\ -DVRQ:HVOH\5DYDL7LWLIDQXH $WKHVLVVXEPLWWHGLQIXOILOPHQWRIWKH UHTXLUHPHQWVIRUWKHGHJUHHRI 0DVWHURI$UWVLQ'HYHORSPHQW6WXGLHV &RS\ULJKW-DVRQ:HVOH\5DYDL7LWLIDQXH 6FKRRORI*RYHUQPHQW'HYHORSPHQWDQG,QWHUQDWLRQDO$IIDLUV )DFXOW\RI%XVLQHVVDQG(FRQRPLFV 7KH8QLYHUVLW\RIWKH6RXWK3DFLILF -XO\ '(&/$5$7,21 6WDWHPHQWE\WKH$XWKRU ,-DVRQ:HVOH\5DYDL7LWLIDQXHGHFODUHWKDWWKLVWKHVLVLVDQRULJLQDOSLHFHRIZRUN GRQH E\ PH :KHUH RWKHU VRXUFHV KDYH EHHQ XVHG WKHVH KDYH EHHQ GXO\ DFNQRZOHGJHG$Q\RPLVVLRQDQGHUURURURWKHUZLVHLVP\RZQDQGWKHPDLQFRQWHQW RI WKLV WKHVLV KDV QRW EHHQ SUHYLRXVO\ VXEPLWWHG IRU DQ\ GHJUHH LQ DQ\ RWKHU 8QLYHUVLW\ 6LJQDWXUH BBBBBBBBBBBBBBBBBB 'DWH -XO\ 1DPH -DVRQ:HVOH\5DYDL7LWLIDQXH 6WXGHQW,'1R 6 6WDWHPHQWE\WKH3ULQFLSDO6XSHUYLVRU ,FRQILUPWKDWWKLVWKHVLVZDVSUHSDUHGXQGHUP\VXSHUYLVLRQDQGLVWKHZRUNRI-DVRQ :HVOH\ 5DYDL 7LWLIDQXH H[FHSW ZKHUH RWKHU VRXUFHV XVHG KDYH EHHQ GXO\ DFNQRZOHGJHG 6LJQDWXUH BBBBBBBBBBBBBBBBBB 'DWH -XO\ 1DPH 'U0DQRUDQMDQ0RKDQW\ 'HVLJQDWLRQ $VVRFLDWH3URIHVVRU LL $%675$&7 0LJUDWLRQDQGGHYHORSPHQWDUHLQH[WULFDEO\OLQNHG0LJUDWLRQKDVH[LVWHGWKURXJKRXW KXPDQ KLVWRU\ 7KH IRFXV RI WKLV VWXG\ ZDV WR HVWDEOLVK WKH OLQNDJHV EHWZHHQ PLJUDWLRQ UHPLWWDQFHV DQG GHYHORSPHQW ZLWK SDUWLFXODU UHIHUHQFH WR WKH LVODQG RI 5RWXPD 7KHVRFLRHFRQRPLFFXOWXUDODQGSROLWLFDOIDFHWVRIPLJUDWLRQZHUHH[DPLQHGDWERWK WKH PDFUR DQG PLFUR OHYHO +LVWRULFDO PLJUDWLRQ DQG UHPLWWDQFH SDWWHUQV DQG NH\ FRQFHSWVUHODWLQJWRPLJUDWLRQDQGUHPLWWDQFHZHUHFRQFHSWXDOLVHG7KLVJXLGHGWKH KRXVHKROGVXUYH\FDUULHGRXWLQ5RWXPD7KHOLYHOLKRRGDQGHFRQRPLFDFWLYLWLHVRI 5RWXPDQVDVZHOODVUHDVRQVIRU5RWXPDQPLJUDWLRQDQGWKHGHVWLQDWLRQRI5RWXPDQ PLJUDQWV ZDV H[DPLQHG 7KH VWXG\ DOVR DVVHVVHV KRZ UHPLWWDQFHV KDYH LPSDFWHG HGXFDWLRQ KHDOWK DQG OLYHOLKRRGV LQ 5RWXPD 4XDQWLWDWLYH DQG TXDOLWDWLYH PHWKRGRORJLHVZHUHHPSOR\HGXVLQJDWULDQJXODWLRQDSSURDFK+RZHYHUWKHUHVHDUFK KDV D PRUH TXDQWLWDWLYH RULHQWDWLRQ 'DWD ZDV FROOHFWHG IURP ERWK SULPDU\ DQG VHFRQGDU\ VRXUFHV 3ULPDU\ GDWD ZDV FROOHFWHG IURP WKH LVODQG RI 5RWXPD DQG DOO VHYHQGLVWULFWVLQWKHLVODQGRI5RWXPDZHUHVXUYH\HG7KHVDPSOHVL]HFRYHUHG KRXVHKROGVLQWKHVWXG\DUHD 7KH VWXG\ ILQGV WKDW WKH PDLQ GULYHU IRU 5RWXPDQ PLJUDWLRQ LV µSRYHUW\ RI RSSRUWXQLW\¶'HVSLWHWKHIHUWLOLW\RIWKHLVODQGWKHUHLVDGHDUWKRIVRFLRHFRQRPLF DQGHGXFDWLRQDORSSRUWXQLWLHV)URPDQHDUO\DJH5RWXPDQVDUHHQFRXUDJHGWRVHHN WKHLU IRUWXQHV EH\RQG 5RWXPD¶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¶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¶V/DZVRI0LJUDWLRQDQG1HRFODVVLFDO7KHRULHV 3XVK3XOO$SSURDFKWR0LJUDWLRQ +DUULV7RGDUR0LJUDWLRQ0RGHO 'HSHQGHQF\$SSURDFKWR0LJUDWLRQ YLL 3RYHUW\ DQG 0LJUDWLRQ WKH 1HZ (FRQRPLFV RI /DERXU 0LJUDWLRQ 1(/0 6XVWDLQDEOH/LYHOLKRRGV$SSURDFK 0LJUDWLRQDQG5HPLWWDQFHV 0LJUDWLRQ5HPLWWDQFHVDQG'HYHORSPHQW 5HPLWWDQFHVDQG(FRQRPLF*URZWK 5HPLWWDQFHV3RYHUW\$OOHYLDWLRQDQG6RFLDO'HYHORSPHQW 0LJUDWLRQ6XVWDLQDELOLW\%UDLQ*DLQYV%UDLQ'UDLQ 0LJUDWLRQDQG5HPLWWDQFHVLQWKH3DFLILF 1DWXUHDQG6FDOHRI0LJUDWLRQLQWKH3DFLILF 7KHRUHWLFDO3HUVSHFWLYHVRQ0LJUDWLRQDQG'HYHORSPHQWLQWKH3DFLILF 3UHYLRXV:RUNV'RQHLQWKH3DFLILF)LMLDQG5RWXPD &RQFOXVLRQ &+$37(57+5((5(6($5&+0(7+2'2/2*< ,QWURGXFWLRQ 0HWKRGRORJLFDO$SSURDFKHV 6RXUFHVRI'DWD 5HVHDUFK'HVLJQ 'DWD&ROOHFWLRQ0HWKRGV 4XHVWLRQQDLUH0HWKRG ,QWHUYLHZ0HWKRG 2EVHUYDWLRQ0HWKRG .H\,QIRUPDQW,QWHUYLHZV (WKQRJUDSK\ 3KRWRJUDSKVDQG9LGHRV 6HFRQGDU\'DWD 6DPSOH'HVLJQ 5HVHDUFK$QDO\VLV 6WXG\$UHD /LPLWDWLRQV (WKLFDO&RQVLGHUDWLRQV &RQFOXVLRQ &+$37(5)285%$&.*5281'2)),-,,6/$1'6$1'52780$ ,QWURGXFWLRQ YLLL 7KH)LML,VODQGV&RQWH[W (FRQRP\ 3RSXODWLRQ'HPRJUDSK\DQG6RFLR&XOWXUDO*URXSV 0LJUDWLRQDQG5HPLWWDQFHVLQ)LML«««««««««««««««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¶PD̨O̩OXP0LJUDWLRQIURP5RWXPD +RXVHKROGVZLWK0LJUDQW0HPEHUV 0LJUDQWVSHU+RXVHKROG L[ 'XUDWLRQRI0LJUDWLRQ 'HVWLQDWLRQRI5RWXPDQ0LJUDQWV &RQQHFWLRQWR0LJUDQWV 5HDVRQVIRU0LJUDWLRQ ,QWHUDFWLRQEHWZHHQ+RXVHKROGVDQG0LJUDQWV 5HPLWWDQFHVWR5RWXPD 5HFHLSWRI5HPLWWDQFHV 7\SHVRI5HPLWWDQFHV &DVK5HPLWWDQFH)ORZDQG8WLOLVDWLRQ 5HPLWWDQFHVLQ.LQG +RXVHKROG3HUFHSWLRQRQ0LJUDWLRQDQG5HPLWWDQFHV 3HUFHSWLRQRQWKH,PSDFWVRI5HPLWWDQFHVRQ+HDOWK 3HUFHSWLRQRQWKH,PSDFWRI5HPLWWDQFHVRQ(GXFDWLRQ 3HUFHSWLRQRQ,PSDFWRI5HPLWWDQFHVRQ/LYLQJ6WDQGDUGV 3HUFHSWLRQRQWKH,PSDFWRI5HPLWWDQFHVRQ/LYHOLKRRGV ,PSDFWRI5HPLWWDQFHVRQ7UDGLWLRQDO/LYHOLKRRG$FWLYLWLHV &RQFOXVLRQ &+$37(56,;&21&/86,21$1'5(&200(1'$7,216 &RQFOXVLRQ 7KHRUHWLFDO/LQNDJHVWR)LQGLQJV 6XPPDU\RI%URDG)LQGLQJV 5HFRPPHQGDWLRQV )XWXUH5HVHDUFK %LEOLRJUDSK\ $SSHQGLFHV [ /,672)7$%/(6 7DEOH 5HVHDUFKRQWKH,PSDFWRI5HPLWWDQFHRQ(FRQRPLF*URZWK 7DEOH 3DWWHUQVRI6DPSOH6HOHFWLRQIURP&RPPXQLWLHVLQ5RWXPD 7DEOH 3RSXODWLRQRI5RWXPDQVLQ0DLQODQG)LMLDQG5RWXPD,VODQG 7DEOH :RUNIRUFHLQ5RWXPD /,672)),*85(6 )LJXUH 7RS7HQ5HPLWWDQFH5HFHLYLQJ&RXQWULHV )LJXUH 7UHQGVDQG3DWWHUQVRI,QWHUQDWLRQDO0LJUDWLRQ )LJXUH 'LVWULEXWLRQRI,QWHUQDWLRQDO0LJUDQWVE\'HVWLQDWLRQ )LJXUH ,QWHUQDWLRQDO0LJUDQWVE\$JHJURXS )LJXUH 7UHQGVLQ:RPHQ0LJUDQWVE\5HJLRQ )LJXUH 3XVK3XOO0LJUDWLRQ)DFWRUVDQG,QWHUYHQLQJ2EVWDFOHV )LJXUH 7KH6XVWDLQDEOH/LYHOLKRRGV)UDPHZRUN )LJXUH 7UHQGVLQ5HPLWWDQFHVDQG2WKHU)LQDQFLDO)ORZV )LJXUH &DSLWDO)ORZVWR'HYHORSLQJ&RXQWULHV