The Impact of Investment Policy in a Changing Global Economy : A Review of the Literature
Evidence shows that foreign direct investment can provide many benefits to host countries, including productivity improvements, better jobs, and knowledge transfer. Further, it can serve as a vehicle for transformation of domestic production and be...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/10/25147224/impact-investment-policy-changing-global-economy-review-literature http://hdl.handle.net/10986/22859 |
| Summary: | Evidence shows that foreign direct
investment can provide many benefits to host countries,
including productivity improvements, better jobs, and
knowledge transfer. Further, it can serve as a vehicle for
transformation of domestic production and better integration
with global value chains. Nonetheless, these benefits are
not automatic. Investment policies are required to maximize
the potential gains of foreign direct investment. One
challenge is that there are different kinds of foreign
direct investment, and each may have different economic,
social, and environmental impacts. However, the literature
analyzing foreign direct investment often tends to swing
from an extremely case-specific focus — analyzing
experiences in one particular country in a single sector
during a given period — to lumping together the analysis as
if it was a homogenous phenomenon. Investment policy
formulation requires a framework sophisticated enough to
differentiate between the various kinds of foreign direct
investment, as well as potential challenges and benefits for
development. It must also be simple enough to enable
governments to organize and prioritize the multiple and
complex variables affecting the maximization of investment
benefits. This paper presents an overview of the literature
on the impact of foreign direct investment. The paper argues
that a logical framework is needed to organize existing
evidence from research to fill gaps in the literature and
make existing evidence more useful in targeting policy making. |
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