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Understanding Fdi-assisted Economic Development



This excerpt from the article "Understanding Fdi-assisted Economic Development" discusses the role of foreign investment in economic development and how much emphasis should be placed on attracting FDI. The article also discusses the costs and benefits of FDI for the host economy. more details
Key Features:
  • Foreign investment plays an important role in economic development.
  • The benefits of FDI for the host economy can be significant, but there are also costs associated with the investment.
  • The key factors that should be considered when attracting FDI include the nature of the investment, the regulatory environment, and the location of the investment.


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This excerpt from the article "Understanding Fdi-assisted Economic Development" discusses the role of foreign investment in economic development and how much emphasis should be placed on attracting FDI. The article also discusses the costs and benefits of FDI for the host economy.

It is nowadays well accepted that both economic growth and development are highly dependent on improving not just the availability of capital, but also access to technological capabilities, infrastructure and resources. This has gone hand-in-hand with an increasing economic liberalization of most developing countries. The role of the MNE as a viable source of both capital and technology is one of the key features of this new openness. In the process of embracing FDI as a solution to the myriad of economic ills - something even the World Bank has begun to do - little attempt is made to understand the rationale and the costs associated with this policy stance. Simply put, FDI is not a condition sine qua non for development. Too much emphasis has been placed on attracting FDI, and not on understanding how to optimise the benefits for the host economy. This volume aims to encourage and promote research related to these issues. This volume was previously published as a special issue of the European Journal of Development Research .
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