The systemic aspect of FDI: side effects and spillovers toward social order

Roland Bardy

International Journal of Markets and Business Systems, 2015, vol. 1, issue 2, 159-180

Abstract: This paper discusses the concept that foreign direct investment (FDI) improves social conditions in emerging nations. It is widely assumed that spillover effects, such as technology-transfer and knowledge diffusion improve a host country's economic conditions. But do these spillovers also serve to rebuild the host countries' social order and contribute to improved living standards, especially when they occur in emerging nations? And can those spillover effects be conceived through the theoretical foundation of systems theory? How does systems theory handle environments like FDI, social order and investment law? The paper intends to provide answers to both the practical and the theoretical issues. The literary overview is kept to the essential and only a few widely known sources that report on all sorts of FDI are given. This leaves room for a wider discussion of how a systemic approach would work and for an empirical account of the mechanisms inducing FDI/impact on economic development and social order. It is hoped that, with this, the systemic view on FDI can be promoted and endorsed.

Keywords: foreign direct investment; FDI; investment law; spillover effects; social order; developing countries; systemic perspectives; FDI: side effects; technology transfer; knowledge diffusion; spillovers; systems theory; economic development. (search for similar items in EconPapers)
Date: 2015
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