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Title:To what extent can foreign direct investment help achieve international development goals? PDF Logo
Authors:Nunnenkamp, Peter
Issue Date:2002
Series/Report no.:Kieler Arbeitspapiere 1128
Abstract:For FDI to help achieve the international development goal of halving absolute poverty, two conditions have to be met. First, poor developing countries need to be attractive to foreign investors. Second, the host-country environment in which foreign investors operate must be conducive to favourable FDI effects with regard to overall investment, economic spillovers and income growth. This paper argues that it is much more difficult to benefit from FDI than to attract FDI. Weak markets and institutions typically prevailing in poor countries tend to seriously constrain the growth-enhancing and povertyalleviating effects of FDI. The crux is that creating an environment in which FDI may deliver social returns will take considerable time exactly where development needs are most pressing.
Subjects:development financing
domestic investment
economic growth
poverty reduction
JEL:F30
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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