Attracting Foreign Direct Investment : What Can South Asia's Lack of Success Teach Other Developing Countries?
Like many other developing countries, South Asian nations have been experiencing increased foreign direct investment inflows over the past decade as developing countries get a larger share of cross-border investments that were once sent to develope...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2013/11/18491804/attracting-foreign-direct-investment-can-south-asias-lack-success-teach-other-developing-countries http://hdl.handle.net/10986/16918 |
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okr-10986-16918 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ADVANCED ECONOMIES AVERAGING BALANCE OF PAYMENTS BANK LENDING BARRIERS BOND BUDGETS BUSINESS CYCLE BUSINESS ENVIRONMENTS CAPITAL ACCOUNT CAPITAL ACCOUNT RESTRICTIONS CAPITAL FLOW CAPITAL FLOWS CAPITAL FORMATION CAPITAL GROWTH CAPITAL MARKETS CAPITAL OUTFLOWS COMMUNICATION COMPETITION COMPETITIVE MARKETS CORPORATE TAX CORPORATE TAX RATES CORPORATE TAXES CROSS-BORDER CAPITAL DATA AVAILABILITY DEBT DEBT LEVELS DECLINE IN INVESTMENT DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING COUNTRY INVESTMENTS DEVELOPING ECONOMIES DEVELOPING ECONOMY DEVELOPMENT POLICY DIRECT FOREIGN INVESTMENT DIVERSIFIED MARKETS DOLLAR VALUE DOMESTIC ECONOMY DOMESTIC INVESTORS DOMESTIC MARKET DUMMY VARIABLE ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC POLICIES ECONOMIC STRUCTURE EMERGING ECONOMIES EQUITY EQUITY STAKE EXCHANGE EXCHANGE RATES EXPORTER EXPORTERS EXPOSURE EXTERNAL TRADE FINANCE FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SYSTEMS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE TRANSACTIONS FOREIGN FIRM FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTMENT FLOWS FOREIGN INVESTORS FOREIGN MARKETS FREE TRADE FUTURE FUTURE GROWTH GDP GLOBAL BUSINESS GLOBAL ECONOMY GLOBAL FINANCIAL MARKETS GLOBAL MARKETS GLOBALIZATION GOOD GOODS GOVERNANCE GOVERNANCE INDICATORS GROSS DOMESTIC PRODUCT GROWTH INVESTMENT GROWTH RATE GROWTH RATES GUARANTEE HOME COUNTRIES HOST COUNTRIES HOST COUNTRY HUMAN CAPITAL HUMAN RESOURCES INCENTIVES INCOME INFLATION INFLUENCE INFORMATION ASYMMETRY INSTITUTIONAL CAPACITY INSTITUTIONAL DEVELOPMENT INTEREST INTERESTS INTERNATIONAL BANK INTERNATIONAL BUSINESS INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INTERNATIONAL TRADE INVESTING INVESTMENT DECISIONS INVESTMENT FLOWS INVESTMENT POLICIES INVESTMENT POLICY INVESTMENT REGIME INVESTMENTS INVESTOR JOINT VENTURES LABOR MARKET LIQUIDITY LIQUIDITY CRISES LIQUIDITY PROBLEMS LIVING STANDARDS LOCAL BUSINESSES LOCAL CURRENCY MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MACROECONOMIC UNCERTAINTY MARKET ACCESS MARKET DEVELOPMENT MERGERS MULTINATIONAL CORPORATIONS NATURAL CAPITAL NATURAL RESOURCE NATURAL RESOURCES NEW PRODUCT OPTIONS OUTCOMES OUTPUT OUTSOURCING PARTICULAR COUNTRY POLITICAL DETERMINANTS POLITICAL ECONOMY POLITICAL RISK POLITICAL RISKS POLITICAL STABILITY POLITICAL UNCERTAINTY PORTFOLIO PORTFOLIO CAPITAL PORTFOLIO CAPITAL INFLOWS PORTFOLIO FLOWS PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIO INVESTMENTS POVERTY POWER PARITY PRICES PRIVATE CAPITAL PRIVATE CAPITAL FLOWS PRIVATE CAPITAL INFLOWS PRIVATE CREDIT PRIVATE INVESTMENT PRIVATE SECTOR CREDIT PRODUCTIVITY PROFITS PROPERTY PUBLIC INVESTMENT PURCHASING POWER RAPID GROWTH RATE OF GROWTH REAL EXCHANGE RATE REGISTRATION PROCESSES REGULATORY ENVIRONMENT REGULATORY FRAMEWORKS REGULATORY RESTRICTIONS RENEWABLE ENERGY RENEWABLE ENERGY SECTOR RETURNS REVENUE REVENUES RISK AVERSION SECURITY SHARE SHARES STOCK STOCKS SUSTAINABLE DEVELOPMENT TARIFF TARIFFS TAX TAX RATE TAXES TECHNOLOGY TRANSFERS TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRADE LIBERALIZATION TRADE PROTECTION TRANSACTION TRANSACTION COSTS TRANSITION ECONOMIES TRANSPARENCY TRENDS VOLATILITY WAGE GROWTH WELFARE WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD INVESTMENT REPORT |
| spellingShingle |
ACCOUNTING ADVANCED ECONOMIES AVERAGING BALANCE OF PAYMENTS BANK LENDING BARRIERS BOND BUDGETS BUSINESS CYCLE BUSINESS ENVIRONMENTS CAPITAL ACCOUNT CAPITAL ACCOUNT RESTRICTIONS CAPITAL FLOW CAPITAL FLOWS CAPITAL FORMATION CAPITAL GROWTH CAPITAL MARKETS CAPITAL OUTFLOWS COMMUNICATION COMPETITION COMPETITIVE MARKETS CORPORATE TAX CORPORATE TAX RATES CORPORATE TAXES CROSS-BORDER CAPITAL DATA AVAILABILITY DEBT DEBT LEVELS DECLINE IN INVESTMENT DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING COUNTRY INVESTMENTS DEVELOPING ECONOMIES DEVELOPING ECONOMY DEVELOPMENT POLICY DIRECT FOREIGN INVESTMENT DIVERSIFIED MARKETS DOLLAR VALUE DOMESTIC ECONOMY DOMESTIC INVESTORS DOMESTIC MARKET DUMMY VARIABLE ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC POLICIES ECONOMIC STRUCTURE EMERGING ECONOMIES EQUITY EQUITY STAKE EXCHANGE EXCHANGE RATES EXPORTER EXPORTERS EXPOSURE EXTERNAL TRADE FINANCE FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SYSTEMS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE TRANSACTIONS FOREIGN FIRM FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTMENT FLOWS FOREIGN INVESTORS FOREIGN MARKETS FREE TRADE FUTURE FUTURE GROWTH GDP GLOBAL BUSINESS GLOBAL ECONOMY GLOBAL FINANCIAL MARKETS GLOBAL MARKETS GLOBALIZATION GOOD GOODS GOVERNANCE GOVERNANCE INDICATORS GROSS DOMESTIC PRODUCT GROWTH INVESTMENT GROWTH RATE GROWTH RATES GUARANTEE HOME COUNTRIES HOST COUNTRIES HOST COUNTRY HUMAN CAPITAL HUMAN RESOURCES INCENTIVES INCOME INFLATION INFLUENCE INFORMATION ASYMMETRY INSTITUTIONAL CAPACITY INSTITUTIONAL DEVELOPMENT INTEREST INTERESTS INTERNATIONAL BANK INTERNATIONAL BUSINESS INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INTERNATIONAL TRADE INVESTING INVESTMENT DECISIONS INVESTMENT FLOWS INVESTMENT POLICIES INVESTMENT POLICY INVESTMENT REGIME INVESTMENTS INVESTOR JOINT VENTURES LABOR MARKET LIQUIDITY LIQUIDITY CRISES LIQUIDITY PROBLEMS LIVING STANDARDS LOCAL BUSINESSES LOCAL CURRENCY MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MACROECONOMIC UNCERTAINTY MARKET ACCESS MARKET DEVELOPMENT MERGERS MULTINATIONAL CORPORATIONS NATURAL CAPITAL NATURAL RESOURCE NATURAL RESOURCES NEW PRODUCT OPTIONS OUTCOMES OUTPUT OUTSOURCING PARTICULAR COUNTRY POLITICAL DETERMINANTS POLITICAL ECONOMY POLITICAL RISK POLITICAL RISKS POLITICAL STABILITY POLITICAL UNCERTAINTY PORTFOLIO PORTFOLIO CAPITAL PORTFOLIO CAPITAL INFLOWS PORTFOLIO FLOWS PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIO INVESTMENTS POVERTY POWER PARITY PRICES PRIVATE CAPITAL PRIVATE CAPITAL FLOWS PRIVATE CAPITAL INFLOWS PRIVATE CREDIT PRIVATE INVESTMENT PRIVATE SECTOR CREDIT PRODUCTIVITY PROFITS PROPERTY PUBLIC INVESTMENT PURCHASING POWER RAPID GROWTH RATE OF GROWTH REAL EXCHANGE RATE REGISTRATION PROCESSES REGULATORY ENVIRONMENT REGULATORY FRAMEWORKS REGULATORY RESTRICTIONS RENEWABLE ENERGY RENEWABLE ENERGY SECTOR RETURNS REVENUE REVENUES RISK AVERSION SECURITY SHARE SHARES STOCK STOCKS SUSTAINABLE DEVELOPMENT TARIFF TARIFFS TAX TAX RATE TAXES TECHNOLOGY TRANSFERS TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRADE LIBERALIZATION TRADE PROTECTION TRANSACTION TRANSACTION COSTS TRANSITION ECONOMIES TRANSPARENCY TRENDS VOLATILITY WAGE GROWTH WELFARE WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD INVESTMENT REPORT Gould, David M. Tan, Congyan Sadeghi Emamgholi, Amir S. Attracting Foreign Direct Investment : What Can South Asia's Lack of Success Teach Other Developing Countries? |
| geographic_facet |
South Asia South Asia |
| relation |
Policy Research Working Paper;No. 6696 |
| description |
Like many other developing countries,
South Asian nations have been experiencing increased foreign
direct investment inflows over the past decade as developing
countries get a larger share of cross-border investments
that were once sent to developed countries. Nonetheless,
South Asia's inflows of foreign direct investment
remain the lowest relative to gross domestic product among
developing country regions. Why are South Asia's
foreign direct investment inflows so low and what lessons
can be drawn for developing countries as a whole? The
analysis in this paper uses a novel empirical model that
accounts for possible trends in convergence in the ratio of
foreign direct investment to gross domestic product between
countries and cross-sectional data for 78 countries from
2000 to 2011. The sample contains 52 developing countries.
The analysis finds that two key factors are at work -- high
overall regulatory restrictions on foreign direct investment
and specific restrictions placed on doing business with
other countries. These factors include overall trade
restrictiveness, which reduces the benefits to cross-border
investments, and weak institutions to protect foreign
investors and facilitate investment. Nonetheless, the
potential for faster growth in intra- and inter-regional
foreign direct investment flows is significant. The main
factors leading to this conclusion are South Asia's
current low levels of foreign direct investment, the many
unexploited opportunities for embodied knowledge transfer,
and supply-chain linkages. The overall lessons for
developing countries are that liberalizing policy
constraints in both trade and foreign investment, keeping
corporate tax rates modest, and improving governance and
transparency could help to substantially improve foreign
direct investment flows. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Gould, David M. Tan, Congyan Sadeghi Emamgholi, Amir S. |
| author_facet |
Gould, David M. Tan, Congyan Sadeghi Emamgholi, Amir S. |
| author_sort |
Gould, David M. |
| title |
Attracting Foreign Direct Investment : What Can South Asia's Lack of Success Teach Other Developing Countries? |
| title_short |
Attracting Foreign Direct Investment : What Can South Asia's Lack of Success Teach Other Developing Countries? |
| title_full |
Attracting Foreign Direct Investment : What Can South Asia's Lack of Success Teach Other Developing Countries? |
| title_fullStr |
Attracting Foreign Direct Investment : What Can South Asia's Lack of Success Teach Other Developing Countries? |
| title_full_unstemmed |
Attracting Foreign Direct Investment : What Can South Asia's Lack of Success Teach Other Developing Countries? |
| title_sort |
attracting foreign direct investment : what can south asia's lack of success teach other developing countries? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2013/11/18491804/attracting-foreign-direct-investment-can-south-asias-lack-success-teach-other-developing-countries http://hdl.handle.net/10986/16918 |
| _version_ |
1764434889328820224 |
| spelling |
okr-10986-169182021-04-23T14:03:33Z Attracting Foreign Direct Investment : What Can South Asia's Lack of Success Teach Other Developing Countries? Gould, David M. Tan, Congyan Sadeghi Emamgholi, Amir S. ACCOUNTING ADVANCED ECONOMIES AVERAGING BALANCE OF PAYMENTS BANK LENDING BARRIERS BOND BUDGETS BUSINESS CYCLE BUSINESS ENVIRONMENTS CAPITAL ACCOUNT CAPITAL ACCOUNT RESTRICTIONS CAPITAL FLOW CAPITAL FLOWS CAPITAL FORMATION CAPITAL GROWTH CAPITAL MARKETS CAPITAL OUTFLOWS COMMUNICATION COMPETITION COMPETITIVE MARKETS CORPORATE TAX CORPORATE TAX RATES CORPORATE TAXES CROSS-BORDER CAPITAL DATA AVAILABILITY DEBT DEBT LEVELS DECLINE IN INVESTMENT DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING COUNTRY INVESTMENTS DEVELOPING ECONOMIES DEVELOPING ECONOMY DEVELOPMENT POLICY DIRECT FOREIGN INVESTMENT DIVERSIFIED MARKETS DOLLAR VALUE DOMESTIC ECONOMY DOMESTIC INVESTORS DOMESTIC MARKET DUMMY VARIABLE ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC INTEGRATION ECONOMIC POLICIES ECONOMIC STRUCTURE EMERGING ECONOMIES EQUITY EQUITY STAKE EXCHANGE EXCHANGE RATES EXPORTER EXPORTERS EXPOSURE EXTERNAL TRADE FINANCE FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SYSTEMS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE TRANSACTIONS FOREIGN FIRM FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTMENT FLOWS FOREIGN INVESTORS FOREIGN MARKETS FREE TRADE FUTURE FUTURE GROWTH GDP GLOBAL BUSINESS GLOBAL ECONOMY GLOBAL FINANCIAL MARKETS GLOBAL MARKETS GLOBALIZATION GOOD GOODS GOVERNANCE GOVERNANCE INDICATORS GROSS DOMESTIC PRODUCT GROWTH INVESTMENT GROWTH RATE GROWTH RATES GUARANTEE HOME COUNTRIES HOST COUNTRIES HOST COUNTRY HUMAN CAPITAL HUMAN RESOURCES INCENTIVES INCOME INFLATION INFLUENCE INFORMATION ASYMMETRY INSTITUTIONAL CAPACITY INSTITUTIONAL DEVELOPMENT INTEREST INTERESTS INTERNATIONAL BANK INTERNATIONAL BUSINESS INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INTERNATIONAL TRADE INVESTING INVESTMENT DECISIONS INVESTMENT FLOWS INVESTMENT POLICIES INVESTMENT POLICY INVESTMENT REGIME INVESTMENTS INVESTOR JOINT VENTURES LABOR MARKET LIQUIDITY LIQUIDITY CRISES LIQUIDITY PROBLEMS LIVING STANDARDS LOCAL BUSINESSES LOCAL CURRENCY MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MACROECONOMIC UNCERTAINTY MARKET ACCESS MARKET DEVELOPMENT MERGERS MULTINATIONAL CORPORATIONS NATURAL CAPITAL NATURAL RESOURCE NATURAL RESOURCES NEW PRODUCT OPTIONS OUTCOMES OUTPUT OUTSOURCING PARTICULAR COUNTRY POLITICAL DETERMINANTS POLITICAL ECONOMY POLITICAL RISK POLITICAL RISKS POLITICAL STABILITY POLITICAL UNCERTAINTY PORTFOLIO PORTFOLIO CAPITAL PORTFOLIO CAPITAL INFLOWS PORTFOLIO FLOWS PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIO INVESTMENTS POVERTY POWER PARITY PRICES PRIVATE CAPITAL PRIVATE CAPITAL FLOWS PRIVATE CAPITAL INFLOWS PRIVATE CREDIT PRIVATE INVESTMENT PRIVATE SECTOR CREDIT PRODUCTIVITY PROFITS PROPERTY PUBLIC INVESTMENT PURCHASING POWER RAPID GROWTH RATE OF GROWTH REAL EXCHANGE RATE REGISTRATION PROCESSES REGULATORY ENVIRONMENT REGULATORY FRAMEWORKS REGULATORY RESTRICTIONS RENEWABLE ENERGY RENEWABLE ENERGY SECTOR RETURNS REVENUE REVENUES RISK AVERSION SECURITY SHARE SHARES STOCK STOCKS SUSTAINABLE DEVELOPMENT TARIFF TARIFFS TAX TAX RATE TAXES TECHNOLOGY TRANSFERS TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRADE LIBERALIZATION TRADE PROTECTION TRANSACTION TRANSACTION COSTS TRANSITION ECONOMIES TRANSPARENCY TRENDS VOLATILITY WAGE GROWTH WELFARE WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD INVESTMENT REPORT Like many other developing countries, South Asian nations have been experiencing increased foreign direct investment inflows over the past decade as developing countries get a larger share of cross-border investments that were once sent to developed countries. Nonetheless, South Asia's inflows of foreign direct investment remain the lowest relative to gross domestic product among developing country regions. Why are South Asia's foreign direct investment inflows so low and what lessons can be drawn for developing countries as a whole? The analysis in this paper uses a novel empirical model that accounts for possible trends in convergence in the ratio of foreign direct investment to gross domestic product between countries and cross-sectional data for 78 countries from 2000 to 2011. The sample contains 52 developing countries. The analysis finds that two key factors are at work -- high overall regulatory restrictions on foreign direct investment and specific restrictions placed on doing business with other countries. These factors include overall trade restrictiveness, which reduces the benefits to cross-border investments, and weak institutions to protect foreign investors and facilitate investment. Nonetheless, the potential for faster growth in intra- and inter-regional foreign direct investment flows is significant. The main factors leading to this conclusion are South Asia's current low levels of foreign direct investment, the many unexploited opportunities for embodied knowledge transfer, and supply-chain linkages. The overall lessons for developing countries are that liberalizing policy constraints in both trade and foreign investment, keeping corporate tax rates modest, and improving governance and transparency could help to substantially improve foreign direct investment flows. 2014-02-05T14:53:55Z 2014-02-05T14:53:55Z 2013-11 http://documents.worldbank.org/curated/en/2013/11/18491804/attracting-foreign-direct-investment-can-south-asias-lack-success-teach-other-developing-countries http://hdl.handle.net/10986/16918 English en_US Policy Research Working Paper;No. 6696 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia South Asia |