Infrastructure or foreign direct investment?: An examination of the implications of MNE strategy for economic development

Mo Yamin and Rudolf Sinkovics ()

Journal of World Business, 2009, vol. 44, issue 2, 144-157

Abstract: This paper explores the paradoxical relationship between MNE current strategies and economic development. There is evidence that positive developmental impacts of FDI flows are conditional on high levels of human capital and thus on the existence of 'good' infrastructure in recipient countries. In this paper we suggest that current MNE strategies have a negative impact on the development of infrastructure in LDCs. The justification for this argument arises from the low developmental impact of current FDI patterns and from rising costs of attracting increasingly footloose investment. The overall effect is to aggravate government financial constraints on the development of basic infrastructure. We develop propositions for future empirical research. We also consider implications for MNE strategy and argue that current MNE strategies are not only ineffective for delivering poverty reduction but that current strategies in developing countries do not necessarily serve the interest of MNEs either.

Keywords: Infrastructure; Economic; development; FDI; benefits; Multinational; strategy; Poverty (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1090951608000436
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:worbus:v:44:y:2009:i:2:p:144-157

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/bibliographic
http://www.elsevier. ... 620401/bibliographic

Access Statistics for this article

Journal of World Business is currently edited by David Collings and Jonathan Doh

More articles in Journal of World Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().