Incentives and Disincentives for Foreign Direct Investment in Less Developed Countries

V. N. Balasubramanyam

Chapter 15 in Economic Incentives, 1986, pp 401-428 from Palgrave Macmillan

Abstract: Abstract One of the most colourful and fluid debates in development economics, which has inspired a vast literature, relates to the role of transnational corporations (TNCs), the major source of foreign direct investment (FDI), in less developed countries (LDCs). Time was when opinion was sharply divided on the issue, between those who regarded TNCs and FDI to be no more than instruments of neo-colonialism designed for the political and economic exploitation of LDCs and those who regarded them as the panacea for the development problem. Fortunately, in recent years, the ardour of both camps has cooled. Now while few regard FDI to be the sole solution for the problem of underdevelopment, there is a growing realisation that it is not a zero-sum game and both the TNCs and LDCs stand to gain from it.

Keywords: Foreign Direct Investment; Host Country; Foreign Investment; Real Exchange Rate; Foreign Firm (search for similar items in EconPapers)
Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-18204-6_15

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DOI: 10.1007/978-1-349-18204-6_15

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