EconStor >
Institut für Weltwirtschaft (IfW), Kiel >
Kieler Diskussionsbeiträge, IfW >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/2616
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorNunnenkamp, Peteren_US
dc.date.accessioned2009-01-28T14:21:07Z-
dc.date.available2009-01-28T14:21:07Z-
dc.date.issued2001en_US
dc.identifier.isbn3894562285en_US
dc.identifier.urihttp://hdl.handle.net/10419/2616-
dc.description.abstractSince recent financial crises in Asia and Latin America, developing countries have been strongly advised to rely primarily on foreign direct investment (FDI) in order to promote economic development on a sustainable basis. Even harsh critics of rash capital account liberalization argue in favor of opening up towards FDI. Yet, economists know surprisingly little about the driving forces and the economic effects of FDI. There are few undisputed insights on which policymakers can rely. Globalization through FDI has become significantly more important since the early 1990s. Various groups of developing countries have participated to a strikingly different degree in the FDI boom. However, the distribution of FDI does not support the widely held view that FDI is concentrated in just a few developing countries. Considered in relative terms, various small and less advanced countries have been attractive to FDI. Policymakers should be aware that various measures intended to induce FDI, including the liberalization of FDI regulations and business facilitation, are unlikely to do the trick. Promotional efforts will help little to attract FDI if economic fundamentals are not conducive to FDI. Fiscal and financial incentives offered to foreign investors may do more harm than good by giving rise to costly “bidding wars.” The importance of traditional determinants of FDI, notably the size of local markets, can no longer be taken for granted. Globalization tends to induce a shift from purely market-seeking FDI to new types of FDI, for which the international competitiveness of local production is highly relevant. The challenge for policymakers in developing countries then is to create immobile domestic assets that provide a competitive edge in the competition for FDI. This task has various dimensions, ranging from local capacity building and the provision of efficient business-related services to trade liberalization with regard to capital goods and intermediate products. Policymakers should not expect too much from FDI inflows. Capital formation continues to be a national phenomenon in the first place. FDI is superior to other types of capital inflows in some respects, particularly because of its risksharing properties, though not necessarily in all respects. The nexus between FDI and overall investment as well as economic growth in host countries is neither self-evident nor straightforward, but remains insufficiently explored territory-
dc.language.isoengen_US
dc.publisherKiel Institute for the World Economy (IfW) Kielen_US
dc.relation.ispartofseriesKieler Diskussionsbeiträge 380-
dc.subject.ddc330-
dc.subject.stwDirektinvestitionen_US
dc.subject.stwStandortfaktoren_US
dc.subject.stwWirtschaftspolitiken_US
dc.subject.stwGlaubwürdigkeiten_US
dc.subject.stwEntwicklungsländeren_US
dc.titleForeign direct investment in developing countries: What policymakers should not do and what economists don't knowen_US
dc.typeWorking Paperen_US
dc.identifier.ppn332600173en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:ifwkdp:380-
Appears in Collections:Kieler Diskussionsbeiträge, IfW
Publikationen von Forscherinnen und Forschern des IfW

Files in This Item:
File Description SizeFormat
kd380.pdf123.93 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.