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Foreign Direct Investment in Developing Countries: A Selective Survey

Luiz de Mello

Studies in Economics from School of Economics, University of Kent

Abstract: This paper surveys the latest developments in the literature on the impact of inward foreign direct investment (FDI) on growth in developing countries. In general, FDI is thought of as a composite bundle of capital stocks, know-how, and technology, and hence its impact on growth is expected to be manifold and vary a great deal between technologically advanced and developing countries. The ultimate impact of FDI on output growth in the recipient economy depends on the scope for efficiency spillovers to domestic firms, by which FDI leads to increasing returns in domestic production, and increases in the value-added content of FDI-related production.

Keywords: FDI; endogenous growth (search for similar items in EconPapers)
JEL-codes: O41 O47 O54 (search for similar items in EconPapers)
Date: 1997-03
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Published in Journal of Development Studies, 1997, 34, pp.1-34

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