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</td><td colspan="4"><p>A. FDI Distribution (%) </p></td><td colspan="4"><p>B. Per Capita FDI (US$) </p></td></tr><tr><td colspan="2"><p>1980s </p></td><td colspan="2"><p>1990s </p></td><td colspan="2"><p>1980s </p></td><td colspan="2"><p>1990s </p></td></tr><tr><td><p>Early </p></td><td><p>Late </p></td><td><p>Early </p></td><td><p>Late </p></td><td><p>Early </p></td><td><p>Late </p></td><td><p>Early </p></td><td><p>Late </p></td></tr><tr><td><p>AFR </p></td><td><p>6.0 </p></td><td><p>8.8 </p></td><td><p>4.0 </p></td><td><p>3.9 </p></td><td><p>2.7 </p></td><td><p>2.9 </p></td><td><p>4.2 </p></td><td><p>10.6 </p></td></tr><tr><td><p>EAP </p></td><td><p>15.3 </p></td><td><p>40.2 </p></td><td><p>48.7 </p></td><td><p>37.3 </p></td><td><p>1.8 </p></td><td><p>4.0 </p></td><td><p>17.8 </p></td><td><p>34.2 </p></td></tr><tr><td><p>ECA </p></td><td><p>0.1 </p></td><td><p>0.6 </p></td><td><p>8.6 </p></td><td><p>13.2 </p></td><td><p>0.1 </p></td><td><p>0.3 </p></td><td><p>12.6 </p></td><td><p>54.8 </p></td></tr><tr><td><p>LAC </p></td><td><p>35.4 </p></td><td><p>38.2 </p></td><td><p>29.8 </p></td><td><p>39.8 </p></td><td><p>16.9 </p></td><td><p>14.1 </p></td><td><p>38.4 </p></td><td><p>137.5 </p></td></tr><tr><td><p>MENA </p></td><td><p>42.5 </p></td><td><p>10.1 </p></td><td><p>7.4 </p></td><td><p>3.5 </p></td><td><p>32.5 </p></td><td><p>5.7 </p></td><td><p>12.7 </p></td><td><p>16.8 </p></td></tr><tr><td><p>SAR </p></td><td><p>0.6 </p></td><td><p>2.1 </p></td><td><p>1.5 </p></td><td><p>2.3 </p></td><td><p>0.1 </p></td><td><p>0.3 </p></td><td><p>0.8 </p></td><td><p>2.9 </p></td></tr></tbody></table> <p>Source: World Bank, Global Development Finance, 2002. </p> <p>4. Such an overall picture changes once again when the sizes of the regions are taken into account. On a per capita basis, the achievements of Latin American and Caribbean countries over-shadow those of all other countries, while the performance of countries in South Asia, though improving, still lags far behind. (Table 2B.) </p> <p>2 </p> <p>1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 </p> <p>2001e </p> <p>5. What these basic facts tell us is that more than any other economic forces, FDI is driving the process of globalization by creating an increasingly tighter global production network. However, there are great discrepancies in the extent to which countries take part in this network. Not only significant gaps exist between developed and developing countries and among the different regions of the developing world, large and increasing disparities prevail even within the same region. (Table 3.) This phenomenon leads us to many questions: What are the roles of FDI in economic development? What determines the size and location of FDI flows? And what the states can do to reap the benefits of FDI while avoiding its negative impacts in this globalized world? </p> <p>Table 3: Standard Deviations in FDI Flows within Each Region (US$ millions) </p> <p>Source: IMF International Financial Statistics, 2002. </p> <p>6. This paper attempts to provide some insight to these questions through a brief review of the existing evidence on FDI. The role of FDI in economic development is the center of the discussion and is analyzed in depth in the next section. Both its positive and negative impacts are examined, as well as the channels through which FDI interacts with local economies. The paper then reviews the vast empirical evidence on the determinants of FDI flows, which provides guidance on the pre-conditions that the states need to create to draw out the positive forces of FDI and to prevent its negative effects from harming their economies. </p> <p>II. The role of FDI in Economic Development </p> <p>7. Economic development is an all-encompassing concept. It centers on economic and social progress, but also entails many different aspects that are not easily quantified, such as political freedom, social justice, and environmental soundness.1Without a doubt, all these matters combine to contribute to an overall high standard of living. However, empirical evidence has amply demonstrated that all these varied elements of economic development correlate with economic growth. That is, as a general rule, countries with faster economic growth have more rapid improvement in health and education outcomes, progressively freer political system, increasingly more equitable distribution of wealth, and enhanced capacity for environmental management. Therefore, while economic growth does not bring about automatically other aspects of social, institutional and </p> <p>1The United Nation Charter of 1944. </p> <table><tbody><tr><td> </td><td><p>1980 </p></td><td><p>1985 </p></td><td><p>1990 </p></td><td><p>1995 </p></td><td><p>2000 </p></td></tr><tr><td><p>AFR </p></td><td><p>304 </p></td><td><p>302 </p></td><td><p>301 </p></td><td><p>366 </p></td><td><p>318 </p></td></tr><tr><td><p>EAP </p></td><td><p>214 </p></td><td><p>392 </p></td><td><p>1,014 </p></td><td><p>7,934 </p></td><td><p>9,010 </p></td></tr><tr><td><p>ECA </p></td><td><p>- </p></td><td><p>- </p></td><td><p>68 </p></td><td><p>1,120 </p></td><td><p>1,960 </p></td></tr><tr><td><p>LAC </p></td><td><p>485 </p></td><td><p>463 </p></td><td><p>555 </p></td><td><p>1,919 </p></td><td><p>6,329 </p></td></tr><tr><td><p>MENA </p></td><td><p>725 </p></td><td><p>258 </p></td><td><p>446 </p></td><td><p>544 </p></td><td><p>661 </p></td></tr><tr><td><p>SAR </p></td><td><p>26 </p></td><td><p>47 </p></td><td><p>95 </p></td><td><p>760 </p></td><td><p>790 </p></td></tr></tbody></table> <p>3 </p> <p>environmental improvements, without economic growth, there is limited prospects for such achievements. </p> <p>8. In this context, the paper examines the role of FDI in economic development as a key ingredient for successful and suXXXXXXXXX economic XXXXXX XXX as part XX a mechanism XX social development. This XXXXXXX of XXX paper aims to highlight XXX XXXX XXXXXXXXX channels XXXXXXX XXXXX XXX makes a XXXXXXXXXXX and XXXXXXXXXXXXX XXXXXX on the XXXXXXXX XXXXXXXXXXX of XXX XXXX countries. At the XXXX XXXX, it XX XXXXXXXXX XX recognize XXXX, like XXX XXXXXX, XXX XX XXX all XXXX no XXX. X XXXXXXXX discussion XX devoted to the potential negative impacts XX XXX flows on XXXX economies. </p> <p>A. XX XXXXXXX to Economic XXXXXX </p> <p>X. The XXXXXXXXX XXX XXXX XXXXXX growth has expanded drastically over XXXX. Before XXX XXXXXXXXXX revolution, it XXXX European XXXXXXXXX XXXX 350 years for income XXX XXXXXX to double. As XXX XXXXXXXXXX XXXXXXXXXX accelerated in XXX 19thcentury, XXXXXXX, XXX lead XXXXXXX, XXX able to XXXXXX its XXX XXXXXX XXXXXX in just over XX years. XXXXX the XXXXX XXX XX and especially towards the XXX of XXX twentieth century, many developing countries, such XX Japan, Botswana, XXXXX, Ireland, XXX the XXXX XXXXXXXXXX XXXX Asian economies, XXXXXXX XX double XXX capita income in XXXX than 10 XXXXX. (Table X.) For XXX first XXXX in XXXXXXX, it is now possible XXX a XXXX XXXXXX from an XXXXX-developed XXXXXXX XX XXXX from poverty to a XXXXXXXXXX comfortable life XXXXXX a single life span. </p> <p>Table X: XXXX XXXXXX XX XXXXXX XXXXXX </p> <p>Source: Crafts (XXXX). </p> <p>XX. Just what XX it XXXX XXXXX such XXXXX XXXXXXXX XXXXXXXX? XXXXXXXX studies XXXXX many potential XXXXXXXXXXXX. XXXXXXXXX to XXX XXXXXX growth theory, long XXXX XXXXXXXX XXXXXX can XX XXXXXXXXX XX the combination XX growth in its XXXXXXX, i.e. XXX XXXXXXXXX in XXXXXX inputs (XXXXXXX XXX labor ) XXX in total factor XXXXXXXXXXXX (TFP), which reflects technological XXXXXXXX XXX XXXXX efficiency XXXXXXXXXXXX in XXXXXXXX XXXXXXXXXXX.XXX XXXX “XXXXXXXXXX” growth XXXXXXXXX, FDI XXX XXXXX its ability XX XXXXXXXXXX significantly XX XXX XXXXX components of growth: FDI XXXXXXXXX XXXXXXX XXXXX, XXXXXX human capital accumulation (though usually unmeasured in labor stock), and speeds up technological XXXXXXXX in host XXXXXXXXX. XXXXXXXXXXXX, XXX most XXXXXX impacts of FDI XX XXXX economies XXX through its role in the XXXXXXXXXXXX of XXXXXXXXXX </p> <p>2More XXXXXXX XX growth XXXXXXXXXX XXXXXX XXX XX found in XXXXXXXX, X. (XXXX), “XXXXXX and XXXXXXXX in XXXXXXXX XXXXXXXXXX XXXXXXXXX: techniques XX quantitative assessment,”XXXXXXX XX XXXXXXXX XXXXXXXXXX, XXX. XX; XXX Barro, X.J. (XXXX) “XXXXX XX growth accounting,” XXXX XXXXXXX Paper No. 6654. </p> <table><tbody><tr><td><p>XXX-XXXXXXXXXX Revolution </p></td><td><p>XXX years </p></td></tr><tr><td><p>Britain, 1st Industrial Revolution </p></td><td><p>175 years </p></td></tr><tr><td><p>XXXXXXX, XXX 19thCentury </p></td><td><p>XX XXXXX </p></td></tr><tr><td><p>Fast XXXXXXXXXX, XXXX World XXX XX </p></td><td><p>10 years or less </p></td></tr></tbody></table> <p>X </p> <p>XXXXXXX and the growth XX TFP XX XXX XXXXXXXXXX. These XXX XXXXXXX XXX discussed separately below. </p> <p>1. FDI and XXXXXXX Formation </p> <p>XX. From XXX XXXXXX Age XXXXXXXXXX XXXX XXXXX World War II XX the XXXX XXXXX XXXXXXXX XXXXXXXX in the XXXXX, there is XXXXX XXXXXXXX XX XXXXXXXXXXX XXXX investment is a key ingredient XX XXXXXXXXX growth. Over XXX last two decades in XXXXXXXXXX, FDI has XXXX to XXXX a XXXXXXX role in most XXXXXXXXXX countries’ total investment. (XXXXXX 3.) However, striking XX the rise in XXX importance XX XXX XXX XXXX in host XXXXXXXXX’ XXXXXXXX XXXXX, XXX XX XXXX XXXX of the total XXXXXXXXX by foreign investors in XXXX countries. XX the XXXX time XXXX XXXXXXX companies mobilize resources within XXXXX own corporate systems, their XXXXXXXXXX XXX also raise funds XXXXXXX bonds, XXXXX, XXX XXXXXX issuances. To XXX extent that XXXXX XXXXXXX XXX in XXX international capital XXXXXXX, they XXXXXXXX the XXXXX XXXXXXX of XXXXXXX financial XXXXXXXXX for XXXXXXXXXXX. XXXXXX, as XXXX XXX XXXXXX States transnational XXXXXXXXXXXX suggest, XXX XXXXX of XXXXXXXX XXXXXXXXX to host XXXXXXXXX due XX XXX presence of XXXXXXX XXXXXXXXXXX often double XXX XXXXX alone.3 </p> <p>XXXXXX X: Ratio XX FDI XX Gross Fixed Capital Formation (%) </p> <p>XX 16 XX 12 10 </p> <p>8 6 4 2 X </p> <p>XXX EAP </p> <p>ECA XXX XXXX SAR </p> <p>XXXXX XXXXX Late XXXXX Early 1990s XXXX XXXXX </p> <p>Source : World Bank, XXXXX XXXXXXXXXXX Report, 2002. </p> <p>XX. XXXXXXXXX, because XXXXXXXXXXXXX XXXXXXXXXXXX typically XXXX XXXXXX XX a XXXX XXXXXXX XX financing options, XXX risk-XXXXXXXX cost of capital is XXXXXXX lower for them XXXX the domestic firms XXXX XXXXXXXXXX XXXXXXXXX. XXXX XXXXXXXXX enables them to be more responsive XXXX other firms XX XXXXXXXXXX opportunities and incentives. </p> <p>XXXXXXX, World XXXXXXXXXX XXXXXX, XXXX. </p> <p>5 </p> <p>XXXXXXXXXXXX, they XXX undertake projects for XXXXX XXXXXXXX investors do XXX XXXX XXX XXXXXXXXXX to assume or XXXXX are XXXXXXXXXX XXX XXXXX for XXXX country firms. As such, they XXXXXXX the XXXXXXXXXX XXXXXXXXX in host countries. XXXX XXXX, conditions XXXXXXXXX to XXXXXXXX investors may be established in XXXXXXXXXX that are beyond their XXXXXXX reach. XX such cases, FDI XXXX serves XX stimulate domestic investment, whereby boosts the total XXXX country XXXXXXXXXX XXXXXXX. Empirical XXXXXXX lend XXXXXXX XX such “crowding in” XXXXXXX of XXX. In XXXXXXXXXXX XX XX (XXXX), for example, it was estimated that the XXXXX XXXXXXXX in investment XXX XXXXXXX X.5 and X.3 XXXXX the increase in XXX XXXXX of XXX.4 </p> <p>XX. More importantly, XXX not XXXX XXXX to XXXXXXXX XXXXXXXXX resources XXX XXXX XXXXXXX development, it is also more stable XXXX other forms XX XXXXXXXXX. Typically, XXX is XXXXX XX a XXXX-term XXXX XX XXX market, the XXXXXX XXXXXXXXX and XXX structural XXXXXXXXXXXXXXX of the XXXXXXXXX XXXXXXXXX. It XX XXXX less XXXXX XX XXXXXXXXX in adverse XXXXXXXXXX XXXX bank lending or portfolio flows. This feature XX XXX is clearly XXXXXXX XXXX Figure X, XXXXX compares XXX coefficient of XXXXXXXXXX (the XXXXXX the value, the XXXX XXXXXXXX XXX resource flows) XX FDI XXXX that XX XXXXXXXXX XXXXXXXXXXX and XXXXX forms of XXXXXXX financial XXXXX (mainly debt) to XXXXXXXXXX XXXXXXXXX between 1980- 2000. </p> <p>Figure 4: Volatility of Capital XXXXX in XXXXXXXXXX Countries </p> <p>7.X X.0 5.X X.0 X.X 2.X X.0 0.X </p> <p>1980s 1990s XXXXX AFR EAP XXX </p> <p>XXXXX 1980s </p> <p>1990s 1980s LAC MENA XXX </p> <p>1990s 1980s </p> <p>1990s </p> <p>XXXXX XXXXX </p> <p>FDI Portfolio XXXXX </p> <p>Source: World XXXX, Global XXXXXXXXXXX Finance, 2002. </p> <p>14. XXXXXXX, FDI XX a XXXX XXXX XXXXXX XXXX XX XXXXXXXX XXXXXXXXX XXXX XXX other XXXXX of financial XXXXX. Out XX XXX XXX countries XXX XXXXX data are available, XXXX XX countries experienced XXXX volatility in XXXXX XXX XXXXXXX XXXX other XXXXX XX external </p> <p>XXXXXXXXXXXX, E. and X. W. Lee (1995), “XXX XXXX foreign XXXXXX XXXXXXXXXX XXXXXX economic XXXXXX?” NBER XXXXXXX XXXXX No. XXXX. </p> <p>6 </p> <p>XXXXXXX financing during the 1980s, XXX this number was reduced to 22 in XXX XXXX turbulent 1990s. More XXXXXX data further XXXXXXX the XXXXXXXXXX XX FDI XXXXX: Brazil XXXXXXXXX to XXXXXX large volumes of FDI in the XXXXX half XX this year – it XX the XXXXXX 2 XXXXXXXXX of XXX XXXXX XXX developing countries (XXXXX China) - XXXXXXX XXX XXXXXXX XXXXXXXX in XXXX country. </p> <p>15. Finally, even XXXXXX XXX XXX have a debt-creating XXXXXXXXX, it XX essentially equity XXXXXXXXXX.5Profits XXX XXXXXXXXXXX XXXX when a project yields XXXXXX and XXXX of the profits XX routinely reinvested in the XXXX XXXXXXX. XX XXXX, most of XXX XXXXX XXX XXXX by XXX shareholders of the XXXXXXX XXXXXXXXX. This has XXXXXX advantage XXXX bank XXXXXXX, XXXXX must XX repaid with fixed XXXXXXXX XXXXXXXXXX XX XXX performance XX XXX XXXXXXX for which XXX loan XXX used. XXXXXXXX, creditors XXXXX XXXX towards XXXXXXXXX XX XXXX XXXX harmless when XXXXXXXX XXXX. XXXX is especially XXXX in XXXXX of XXXXXXXX XXXXXXXXX XXXXXX, XXXX government XXXX-XXXX are XXXXXXXXX XXXXXX XXX obtained XX XXX XXXXX, adding XX XXX XXX XXXXXXX of XXXX country XXXXXXXXX. Therefore, XXX will XX XXXXXXXXXX XXX lead XX a XXXX XXXXXX and XXXX relief XXXX XXXXX XX an XXXXX. </p> <p>X. FDI and Productivity XXXXXX </p> <p>XX. XX XXXXXXXXXXX XXXXXXXX XXXXXXXX, productivity growth XXXXXXXX the XXXXXXXXXXXX of XXXXXXXXX technological XXXXXXX to economic XXXXXX. XXXXXXX, XXX XXXXXXXXXXXXXX XX XXX growth XXXXXXX, especially with XXX advent XX XXX XXXXXXXXXX growth XXXXXX, call for XXXXXXX in XXXX an XXXXXXXXXXXXXX. XXXXXXXXX on the XXXXXX of the technology (XXXXX or XXXXXXX XXXXXX), XXX structure XX XXX XXXXXXX, XXX XXX ease XX XXXXXXXXXXXX between XXXXXXX of production, XXXXXXXXXXXXX change XXX XX XXXXXX more or less XXXX TFP XXXXXX. XX the XXXX time, the XXXXXXXXXX of the “soft” side XX technological advance – XXXXXXXXXXXXXX structure, managerial XXXXXXXXX, XXXXX knowledge, XXX. – XX XXXXXXXXXXXX XXXXXXXXXX XX an integral part XX the XXXXX XXXXXXXXXXXXX upgrade XXXXXXX, contributing to the XXXXXXX XXXXXXXXXXXX growth. </p> <p>17. XXXXXXXX its XXXXXXX XXXXX of contribution XX economic growth, the XXXXXXXXXX of technological XXX organizational XXXXXXX XXX long been XXXXXX established. XX the long pre-Industrial XXXXXXXXXX XXXXXX, a long XXXX growth rate XX 0.2 XXXXXXX XXX year was XXXXXXXXXX XXXXXXXXXX. The technological XXXXXXXXXXXX in late 18thcentury Britain XXXXXXX XXX XXXXXX potential, but it was still XXXXXXXXXX XXXXXXXX to XXX 8 XXXXXXX XXXXXX growth XXXX in the high performing East XXXXX XXXXXXXXX in XXXXXX decades. Just like the XXXX XXXXXX in XXXXXXX Europe, XXXX rapid economic growth XX XXX XXXXXXXXXX countries in the XXXXXX half XX XXX XXXXXXXXXXX owed much to XXX reduction in barriers to the XXXXXXXXX of XXXXXXXXX XXX organizational innovations from XXX world’s leading countries. XXXXXX, XXXXXX XXXX re-XXXXXXXXX XXXX had XXXXXXX XXXXXXX XXXXXXXXX, XXXXX XXXXXXXXXX XXXXXXXXX XXXX were able XX XXXXXX and imitate the best XXXXXXXX from XXXX XXXXXXXX XXXXXXXXX enjoyed XXXXXXXXXXXXX economic growth. XXX XXXXXXXXXX world XX XXXXX, the </p> <p>XXXX debt-XXXXXXXX component of FDI XXXXXXXX XXX less XXXX 18 XXXXXXX XX the inflows XX FDI XX developing XXXXXXXXX XXXXXXX 1990-XXXX. UNCTAD, XXXXX Investment Report, XXXX. </p> <p>X </p> <p>XXXXX and efficient transfer XXX XXXXXXXX XX “XXXX practice” across XXXXXXX becomes the very essence of XXXXXXXX development. </p> <p>18. Best XXXXXXXX may XX transmitted across borders XX various XXXXXXXXXX. Foreign XXXXXX XX XXXXXXX may provide the demand for XXXXXXXXX, XX well XX XXXX level of technical assistance XX XXXXXXXX firms. Imported XXXXXXX XXXXX may XXXXXX XXXXXXXX XXXXXXXXXX. XXXXXXXXXX XXXXXXXXX allows countries to acquire XXXXXXXXXXX. XXXXXXXXXXX transmit XXXXXXXXX. Yet, XXXXXXXX the XXXX effective XXXXX of transferring XXXX XXXXXXXX XX XXX XX foreign XXXXXXXXXX XXXXX to XXXXXXX XXX integrate XXXXXXXX XXXX all XX XXX above XXXXXXXXXX.XXX XXXX, XXX most important benefit XX XXX XX that it XXXXXXXX, along with XXXXXXXXX XXXXXXXXX, XXXXXX to XXX XXXXX XXXXX XX XXXXXXXXXXXXX, XXXXXXXXXXXXXX and skill assets, as well XX XXX XXXXXXX of the parent company. With few XXXXXXXXXX, XXX XXXX XXXXXXXX XX the fast-XXXXXXX economies XXXXXX XXXXXXX on FDI XX XXXX start and sustain XXXXX rapid XXXXXXXX transformation.X </p> <p>XX. XXX transmits XXXX XXXXXXXX in XXX XXXX: internal XXXXXXXXX of XXXXXXXXXX and XXXXXX to XXX foreign XXXXXXXXXX in the XXXX country, and XXXXXXXXXXXXX diffusion to a XXXXX section of XXXXXXXXX and institutions within XXX XXXX country. XXXXXXXX XXX internal XXXXXXXXX XX XXXX practice XXXXXXX XXXXXXXXXXX the affiliates, XX the XXXXXX XXXX foreign-owned firms outperform XXXXXXXX XXXXXXXXXXXX, their XXXXXXXX XXXXX XXXXXXXXXXX a XXXXXXXX XXXXX XX XXX XXXX country.XXXXXX XX XXX, XXXX XX the XXXXXXXXXXXX are based XX expensive R&D XXXXXXXX to branded products that firms generally XXXX XXX sell to unrelated parties. Direct XXXXXXXXXXX are XXXX XXX XXXX XXXXXXXXX XXX XXX XXXX country XX obtain the latest XXXXXXXXXXXX XXX expand XXX productive XXXX. XXXXXXXX, XXXXXXX foreign XXXXXXXXXX are XXXXXXXXX at the XXXXXXXXX XX introduce XXX XXXXXXXXXX and XXXXXXXXXXXXXX techniques, quality control standards, and marketing XXXXXXX, XXXX tend to XXXXXX best practice more XXXXXXX than local firms. Thanks XX XXXXX XXXXX XXXXXXXX failures, the affiliates may XXXXX as a XXXX XXXXXX XX XXXXX new approaches in the XXXX country. Finally, for many developing XXXXXXXXX, XXXXX XXXXXXXXXXXX into a global company’s XXXXXXXXXXXXX production XXXXXXX XX XXX easiest way XXX them XX XXXX access XX XXXXXXXX or global markets. </p> <p>XX. Nevertheless, XXX ultimate XXXXXX of FDI on domestic XXXXXXXX growth depends on the XXXXXXXXX of XXXX practice through the local XXXXXXX XX XXXXX. XXXX XXXXXXXXX XXXXXXX takes place through four main channels: backward linkages XXXX local XXXXXXXXX (XXXXXXXX), XXXXXXX linkages with XXXXX producers XXX XXXXXXXXXXXX, XXXXXXXXXX XXXXXXXX </p> <p>XXXXXX, M., C. Aaron, and X. XXXXXXXXXXXX (XXXX), “Foreign direct XXXXXXXXXX and XXXXXXX XXXXXXXXX,” XXXXXX XXXXXXXX XXXXXXX XXXXX No. 2613, XXX World Bank. 7Japan XXX Korea are XXXXXXXXXXX XXX XXXX examples of XXXXXXXXX XXXXX XXXXXXXX rapid XXXXXX XXXX XXXXXXX XXXXXXXX on FDI. This strategy is very difficult to XXXXXXXXX, XXXXXXXXXX in XXXXXXXXX XXXXXXX a solid skill base, a buoyant entrepreneurial spirit, a capable bureaucracy, and XXXXXXXXX incentive regimes. </p> <p>XXXXX XXXXXXX show XXXX XXXXXXX ownership XXXXXXXXXX XXXXXXXXXX XXXX XXXXXXXXXXXX XXXXXXXXX XX the firm. See Ramachandran, V. XXX M. K. Shah (1997), “XXX XXXXXXX XX XXXXXXX ownership in Africa: evidence XXXX Ghana, Kenya and XXXXXXXX,” RPED Paper No. 81, XXX World XXXX.; XXXXXXX, S. XXX B. Hoekman (XXXX), “XXXXXXX investment XXX productivity growth in Czech XXXXXXXXXXX,” Policy Research Working XXXXX XXXX, The World XXXX.; XXX XXXXXX, B. XXX A. X. XXXXXXXX (XXXX), Do domestic XXXXX benefit from XXXXXX XXXXXXX investment? Evidence XXXX XXXXXXXXX,”XXX American Economic Review, Vol. XX, No. X. </p> <p>X </p> <p>with XXXXX competitors, and linkages XXXX XXXXX institutions such XX universities and XXXXXXXX institutes XX well XX XXXXXXXXXX XXXXXXXX centers. XX developing XXXXXXXXX, XXX XXXX XXXXXXXXX XXXXXXX of these is usually XXXXXXXX: XXX XXXXXXXX XX XXXXXX and services from local XXXXXXX XX foreign suppliers. </p> <p>XX. XXX XXXXXX (XXXX, quality, reliability, XXX.) XXXXX equal, local procurement is generally preferred than arm’s XXXXXX XXXXXXXXX or in-XXXXX XXXXXXXXXX XXXXXXX proximity XXXXXX XXXXXXXXXXX XXXXX and allows XXX greater flexibility XXX XXXXXXXXXXXXXX. This XX why XXXXXXXX XXX XXXXX XX doing so are XXXXX XXXX XXX resulting XXXXXXX, foreign investors XXXX an XXXXXXXX in developing local suppliers, helping them XXX XX facilities, XXXXX XXXXXXXXXXXXX XXX XXXXX levels, XXXXXX inputs, and XXXXXX XXXXXXX. XX the XXXX XXXXXXX, XXXX is XXXXX one of XXX XXXX XXXXXXXX mechanism for transmission of XXXX XXXXXXXX. The strengthening of these XXXXXXXXX can in turn lead to XXXXXXX further XXXXXXXXXX XX the XXXX of the XXXXXXX XXXXXXX XXXXXXXXXXXXX effects, mobility XX trained labor, enterprise XXXX- XXXX, and competition effects. </p> <p>22. XXX extent to which foreign affiliates XXXXXXXXX XXXXXXXX linkages XXXX XXXXX suppliers XXXXXX XXXX XXXXXXXX to XXXXXXXX XXX XXXXXXX XX country. Although XXXXX is widespread concern in developing XXXXXXXXX that XXXXXXX affiliates XXXX too limited connection XXXX the XXXX of the XXXX XXXXXXX, XXXXXXX empirical studies XXXX demonstrated that in XXXX industries (e.g. XXXXXXXXXX) and in XXXXXXXXX XXXXX XXXXXXXX XXXXXXXX XXXXXXXXXX are XXXXXXX, foreign XXXXXXXXX XXXX XXXXXXXXX XXXXXXX to upgrade XXXXXXXXXXX suppliers XXX XXXXXX XXXX XXXX XXXXXXX XX XXXXX suppliers than XXXXXXXX firms.9 </p> <p>XX. Ultimately, XXX diffusion XX XXXX practice in XXX XXXX XXXXXXX XXXXXXX XX the way domestic markets XXXX, as XXXX XX XXX XXXXXXXXXX XXXXXXXXXX of XXXXXXXX XXXXX. Where the market XXXXXXXXX structures are XXXXXXXX XXXXXXXXX, XXX inflows will tend to be more XXXXXXXXXX XXX XXXX-XXXXXXX in nature, bringing XXXXXXX benefits XX XXX host XXXXXXX. Similarly, XXXX XXX domestic XXXXXXXXX base XX XXXX and XXXXXXXXXXX XX asymmetric, XXX XXXXXXXXX XXXXXXXX XXXX XX XXXXXXXXXXX for XXXXXXXXXXXX XXXX practice. </p> <p>X. A XXXXXXXXX XXX XXXXXX Advancement </p> <p>XX. At the same XXXX that XXX XXXXXX as a catalyst for rapid economic XXXXXX by XXXXXXXX XXXXXXXXXX XXXXXXXXX XX XXXXXXXX developmental stages and XX catch up XXXX advanced economies, it constitutes XXXX an important XXXXXXXX for XXXXXXXX XXXXXX XXXXX. XX this respect, FDI XXXXX a XXXXX role in the XXXXXX development XXXXXX XX the XXXX XXXXXXXXX. Here, two XX the main XXXXXX XXXXXXX XX XXXXXXXXXXX – employment and XXXXXXXXXXX - XXX discussed in XXXXXX. </p> <p>XXXX XXXXXXXX in Lall, S. (XXXX), “Vertical XXXXXXXXX linkages in LDCs: an XXXXXXXXX study,”Oxford Bulletin XX Economics and Statistics, XXX 42, No. X. on XXXXX; XXXXXX (2000),XXXXX Investment XXXXXXXX XXXXXXXXX, XXXXXX XXX Thailand; XXXXX G. and H. XXX (XXXX),XXXXXXXXX XXXXXXXX and XXXXXXXXXXXX growth: evidence XXXX Malaysian manufacturing, The World XXXX; XXX Barnes, X. XXX X. Kaplinsky (2000), “Globalization and XXX XXXXX XX local XXXXX? Automobile component section in XXXXX XXXXXX. </p> <p>X </p> <p>1. XXXXXXXXXX and XXXXX XXXXXXXX </p> <p>XX. XXXXXXXXXX XXXXXXX XXX XXXXXX employment XXX XXXXXX XXXXXX high XX a XXXXXX objective for developing XXXXXXXXX. It is a XXXXXXXXX XXXXX to achieve an XXXXXXXXX distribution of XXXXXX XXX higher XXXXXXXX XX XXXXXXX for XXX majority of XXX population. Because XX XXX special features of foreign investments – they XXXX XX be larger in size, with XXXXXXX technological sophistication, facing XXXX competitive XXXXXXXXX in their XXXXXXX markets, and having XXXX XXXX XX XXXXXXXX in their XXXXXXXXXX XX XXXXXXXX to domestic enterprises – XXX often XXXXX a unique role in XXXXXXXXXX XXXXXXXX XXX upgrading of XXX XXXX XXXXXXXXX. </p> <p>XX. There are XXXXX basic XXXXXXXXXX XXX FDI to generate XXXXXXXXXX in the XXXXXXXXX countries. XXXXX, foreign affiliates XXXXXX people in their XXXXXXXX XXXXXXXXXX. Second, XXXXXXX backward and XXXXXXX linkages, employment XX created in XXXXXXXXXXX that XXX XXXXXXXXX, XXXXXXXXXXXXXX, or service XXXXXXXXX XX them. XXXXX, as XXX-XXXXXXX XXXXXXXXXX XXXXXX XXX the local XXXXXXX grows, XXXXXXXXXX XX also XXXXXXX in XXXXXXX and activities that are not even indirectly linked to the XXXXXXXX XXX. </p> <p>27. XXXXXXXXXXXXX data are XXXXXX with respect to the employment XXXXXXXXX by XXX in XXXXXXXXXX countries. XXXXXXXXX put XXX XXXXXX XXXXXXXXXX XXXXXXX XX XXXXXXX XXXXXXXXXX XX less than two XXXXXXX of the labor XXXXX in XXXX XXXXXXXXXX countries, XXXXXXXX the share would be XXXXXX XXXX XXXX XXXXXX employment is considered XXX it XX XXXXX substantial in XXX modern XXXXXXXXXXXXX sector.XXXX Thailand, XXX XXXXXXX, FDI accounts for about 17 XXXXXXX of the XXXXX manufacturing XXXXXXXXXX in the late XXXXX, XX XXXX XX a XXXXXXX share XX new employment XXXXXXXXXX in XXX poorer provinces XXX XXXX XXXX Bangkok.XXXXXXXXXX XXXXXXXXXX XXXXXXX XX foreign XXXXXXXXXX, by XXXXXXXX, XXX XX XXXXX where the XXXXXXXXXXX XXXXXXX XXX and the XXXXX XXXXXXX XX XXXXXXX. XXXXX on a series of XXXXX case XXXXXXX in both developed XXX XXXXXXXXXX countries, XXX XXXXX estimated that when only the indirect XXXXXXXXXX XXXXXXXXX XX XXXXXXXX and forward XXXXXXXX XXX XXXXXXXXXX, 1.X XXXX were created indirectly for XXXX XXX created XXXXXXXX XX a foreign XXXXXXXXX.XX </p> <p>28. XXXXX XXXXXXXXXXXXX XXXXXXXXXX XXXXXXXX XXXXX high in XXX XXXXXX agenda XX developing XXXXXXXXX, XXXXXXXXXXXX XXX jobs XXXXXXX through XXX preoccupies the policy makers XXXX equal weight. XXXXXXX the XXXXXXX XXXXXX that foreign investors are attracted XX developing countries principally, or even solely, by XXX low labor costs, XXXXXXXXX XXXXX to XXX opposite. In fact, XXXXX XX general XXXXXXXXX XXXX multinational XXXXXXXXX provide employment XX conditions that, on XXX XXXXX, compare favorably with XXX XXXXXXXXXX </p> <p>XXXXXXXX,World Investment Report, XXXX. 11Brimble, X. XXX J. Sherman (1998). “the XXXXXXX impacts of XXXXXXX direct investment on economic XXXXXXXXXXX in Thailand: corporate XXXXXXXXX.” XXXXX XXXXXXXX XXX XXXX Level Roundtable on XXX and its Impact XX Poverty XXXXXXXXXXX, XXXXXXXX XXXX. 12Dupuy, X and J. Savary (XXXX). “XXX XXXXXX indirects XXX XXXXXXXXXXX multinationales XXX l’XXXXXX des pays d’XXXXXXX. » XXX Working Paper No. 72. </p> <p>10 </p> <p>XXXXXXXXX in XXXX countries. XX particular, XXXX-XXXXXXXXXXX large multinational XXXXXXXXXXX XXX most XXXXXX XX XXXXXX with international labor standards XXX XXXXXX XXXX XXXXX XXXXXXXXX. Indeed, XXXXXXX of XXXXX size, technological sophistication, XXX need to XXXX high product XXXXXXXXX, XXX exposure to XXXXXXXXXXXXX scrutiny, XXXXXXX affiliates have come to be expected XX XXXXX higher XXXXXXXXXXXX, superior working XXXXXXXXXX, and more skill XXXXXXXXX XXXXXXXXXXXXX XX their XXXXXXX XXXX XXXXXXXX XXXXX. </p> <p>29. XX parallel to XXXXXXXXXXXXX spillovers, XXXX XXXXXXXXXX practices can XX transferred to host XXXXXXXXX XXXX the foreign affiliates are XXXX integrated XXXX the XXXXX XXXXXXX. In XXXX respect, XXX XXXXX-border diffusion of modern organizational XXX managerial XXXXXXXXXX has the XXXX XXXXXX XX XXX XXXXXXX XXXXXXXXXX and XXXXX XXXXXXXX development styles XX XXX XXXXXXXXX XXXXXXXXX. XX creating a more efficient XXX XXXX productive work XXXXXXX, XXX helps XX set new XXXXXXXXXX XXXXX XXX XXXXXX XXXXX XXXXXXXXX in XXX XXXXXXXX XXXXXXXXXX XXX XXXXXXXXXX. In XXXXX, for example, it XXX through foreign investments that a new XXXX of labor-XXXXXXXX system XXX XXXXX XXXXXXXXXX in the early 1980s, XXXXX linked remuneration and XXXXXXX XX XXXXX productivity. The XXX XXXXXX system was so XXXXXXXXXX XXXX it eventually led to the XXXXXXX-XXXX wage and XXXXX XXXXXX reforms. </p> <p>30. Finally, XX XXXX XX XXX cross-border XXXXXXXX XX its human XXXXXXXX XXXXXXXXXX practices, XXX also brings with it XXX kind XX XXXXXX XXXXXXXXXX relations that XXX prevalent in advanced XXXXXXXXX.XXXX general, XXXXXXX investors adapt XXXXX industrial relations systems XX XXX legislations XXX practices of their host countries. XX XXXXX so, XXXXX XXXXXXXX to management-XXXXX relations XX XXXXXXXXXX by the attitudes of XXX XXXX country governments. XXX global character of FDI, XXXXXXX, XXXXXXXX that large XXXXXXX companies XXX XXXXXX practices XXXX XXXXXX in XXXX XXXXXXXX from XXXXX of XXXXXXXXXX enterprises in a XXXX country. Internationally, there is a XXXXX XXXXX towards increased communication between management XXX workers. XX multinational XXXXXXXXXXXX XXX XXXXXXXXX firms that XXXXXX in their XXXXXXXXX and XXXX XXXX XXXXXXX’ XXXXXXXXXXXXX with a view towards XXXXXXXXXXXX an XXXXXXXXX relationship, industrial relations XXXXXXXXXXXX do XXX XXXXX XXXX XXXXXXXXXX in foreign XXXXXXXXXX XXXX in domestic firms. Conversely, XX the XXXXXX XXXX XXXXX labor XXXXXXXXX XXX XXXX consultative in XXXXXX XXXXX to XXXXX international XXXXXXXXXXX, XXXXX XXXXXXX of industrial XXXXXXXXX often XXXXXXX a XXXXX XXX XXXXXXXX firms XXX XXXX part XX the labor XXXXX XXXX XX XXX organized. </p> <p>2. XXXXXXXXXXXXX Standards </p> <p>XX. XXX environmental degradation in XXXXXXXXXX XXXXXXXXX is XXX XXXXXXXX XXXXXXXXXXX XX the production and XXXXXXXXXXX patterns XXXX within XXX XXXXXXXXX and in XXXXX XXXXXX markets. In a globalized world economy, the XXXXXX of these forces are XXXXXXXXX, with FDI XXXXXXX as XXXXXXX conduit. XXXXXXXXXXX, XXXXX it XX XXXXXXXXXX XXXX there XXXX XXXX XXXXX XXXXX powerful XXXXXXXXX relocate XXXXXXXXX XXXXXXXXXX XX countries or regions out of considerations XX XXXX environmental XXXXXXXXX, XXXXX is XX XXXXXXXXXX XXXXXXXX that this is XXX rule. Overall, FDI flows XX XXXXXX XXXXX XXX net </p> <p>XXXXXX is most XXXXXXXX XXX investors XXXX XXXX European countries. </p> <p>11 </p> <p>profitability XX highest, not XXXXX XXXXX are lowest. XXXX XX why XXX XXXX XXXX XX XXX XXXXX’s XXX XXXXX XX developed countries, where XXXXXX XXXXX are higher and XXXXXX standards XXXX stringent, available XXXX from the XXXXXX States show that XXX XXXXX of pollution-intensive XXXXXXXXXX XX XXX XXXXXXX in developed countries XX well.14Therefore, XXXXX is XX XXXXXX XXXXXXXX XX XXXXXXX the argument XXXX XXX is XXXXXXX XXXXXXXX XX developing XXXXXXXXX XX XXXXX XXXXX XXXXXXXXXXXXX standards so as XXX XX lose investment XXX jobs. </p> <p>XX. XXXXX XXXX been several XXXXXXX that attempt to test the “XXXXXXXXX haven” XXXXXXXXXX. XXXX the correlation approach, XXXXX XXXXXXXX the XXXXXXXXXXXX XXXXXXX XXXXXXX FDI XXX XXXXXXXXXXXXX standards XX host XXXXXXXXX, XXX XXX XXXXXXXX choice approach, which embeds environmental XXXXXXXXXX as a XXXXXXXXXXXX for XXX XXXXX, fail to support this hypothesis.XX Only in XXXXXXXX case XXXXXXX were examples XXXXX to XXXXXXX the notion that XXXXXXXXXXXXX standards were a XXXXXX in FDI XXXXXXXX XXXXXXXXX. However, it XXXXXX be pointed out that these case XXXXXXX suffer XXXX selection bias XXXXXXX XXXX firms XXXX XXXX XXXXXXXX XXXXXXX XXXXXXXX were documented.XX </p> <p>33. Essentially, environmental XXXXXXXXX are an input into the XXXXXXXXXX process. The impact XX industrial activities on the XXXXXXXXXXX XX thus closely linked to the XXXXXXXXXX efficiency of XXXXX XXX XXXXX capacity to XXXXXX XXXXXXXXXXXXX risks. Environmental damage XXXXX to be greatest in low productivity operations XXXX XXXXXX obsolete XXXXXXXXXX, outdated work XXXXXXX, poor human XXXXXXXX XXXXXXXXXX XXXXXXXXXX, XXX XXXXXXXXXXX XXXXXX XXX. In this XXXXXXX, on account of its stronger technological and XXXXXXXXXX base, FDI is actually XXXXXX XXXXXXXXXX XX XXXXXX XXXXXX environmental XXXXXXXXX XXXX XXXXX domestic counterparts. There XX indeed some evidence to show XXXX XXX XXXXXXXX of XXXXXXX companies rarely XXXXXX worse XXXX is the general practice in the recipient XXXXXX. XXXXXX, XXXX tend to XXXXXXX XXXXXX environmental practices and contribute XX an improvement of local XXXXXXXXXXX.17 </p> <p>34. XXXXXXXXX, XXXXXXX of XXXXX XXXXXX as a cause XXX the “XXXX XX XXX XXXXXX” in XXXXXXXXXX countries’ XXXXXX XX XXXXXXXX growth, XXX should XX viewed as a force to bring about better XXXXXXXXXXXXX standards. Because of XXXXX XXXXXXXXXXX XX XXX XXXXXXXXX XXXXX, XXXXX affluent and XXXXXXXXXXXXXXX demanding XXXXXXX XXXX XXX XXXXXXXXX XXXXXXXXXXXXX XXXXXXXXXXX XXX environment-friendly XXXXXXXX, XXX XXX XXXXXX a conduit XXX XXXXXXXXXXXX XXXXX XXXXXXXXXX and sound environmental management XXXXXXX. </p> <p>14UNCTAD,World Investment XXXXXX, 1999. 15See XXXXX J. (XXXX), “XXXXXXXXXXXXX XXXXXX XXX XXXXXXXXXXXXXXX in a globalized economy: XXXXXXXXXX XXXXXX XXX a XXXXXX of the XXXXXXXXX XXXXXXXX”, in OECD XXXXXXXXXXXXX and XXXXXXXXXXX: Preliminary Perspectives; and Eskeland X. and X. Harrison (XXXX), “XXXXXX XX XXXXXXX XXXXXXXX? XXXXXXXXXXXXX and the XXXXXXXXX haven hypothesis” XXX World XXXX, XXXXX. XXXXXXXX op. cit. XXXXX Pearson, C. (XXXX),Multinational corporations, XXX XXXXXXXXXXX XXX XXX third world, North XXXXXXXX: Duke XXXXXXXXXX XXXXX; XXXXXXX, D. (XXXX),XXXXXXXXX and XXX struggle XXX the world product, Cambridge: Cambridge XXXXXXXXXX XXXXX; Gentry, B. (ed.), (1998),Private capital flows XXX the environment: lessons from XXXXX XXXXXXX,XXXXXXXXXX: XXXXXX Elgar Publishing; XXX Wheeler , D. (XXXX), “XXXXXX to XXX bottom? XXXXXXX XXXXXXXXXX XXX air pollution in XXXXXXXXXX XXXXXXXXX,” XXXXX, The XXXXX XXXX. </p> <p>XX </p> <p>C. Potential XXXXXXXX Impacts of FDI </p> <p>35. XX reviewed in XXXXXX in XXX XXXXXXXXXXX above, XXX has a XXX XXXX to XXXX in XXXX countries’ economic XXXXXXXXXXX. XXXX does not XXXX, XXXXXXX, XXXX XXX XXX never XXXX XX undesirable XXXXXXXX XXXXX XXX XXXXXXXXXXXXX. XXXXXX, even with XXX best XX intentions, FDI may XXXXXXXXX produce XXXXXXXXXXXXX XXXXXXX XXXX XXX harmful XX host developing countries. It XX XXXX undeniable XXXX, rare XXXXXX XXXX XXX, some XXXXXXX investments XXX be XXXXXXXXXX in XXXXXX and XXXX XX XX properly regulated. XXXX XX the negative impacts XX FDI XXX reviewed in XXX XXXXXXXXX section. XX will XX XXXX, in most XXXXX, these negative XXXXXXX are a reaction to the XXXXXXXXXXX XXX inefficiencies in XXX XXXXXXXX markets. Therefore, XXXX XXX XXXXXXXXXXX avoidable with XXXXXXXXXXX policy tools XXX a sound XXXXXXXXXX framework. </p> <p>1. XXX “Crowding Out” Effect of XXX </p> <p>XX. XXXXXXXXXXXXXXX XXX XXXXXXXXX evidence that FDI XXXXXXX XXXXXXX in XXXXXXXXXXXXXX more XXXXXXXXXX XXXX what XXX XX XXXXXXX XXX XX FDI XXXXX, there is XXX lingering XXXXXXX XXXX XXXXXXX XXXXXXXXXXX XXX take away XXX investment XXXXXXXXXXXXX of domestic XXXXX, thereby XXXXXXX them out of business. XXXX a situation may XXXXX in either XXXXXXXXX markets or XXXXXXX XXXXXXX. XX the XXXXXXX investor XXXXXXXX XXX XXXXXXX by XXXXXXXXX from the host country financial XXXXXX under conditions XX XXXXXX resources, XXXXXXXX XXXXXXXX XXXXX may rise XX a result, which may make XXXXXXXXX XXXXXXXXXXXX XXX some XXXXXXXX XXXXX. Precisely XX XXXXXXX XXXX XXXX happening, XXXXX, a XXXXXXX with XXXXXXXXX XXXXXXX XXXXXXXX XXXXXXX FDI, has XXXXXXXX XXX XXXXX XX XXXXX XXX access XX XXXXXXX companies XX XXXXXXXX XXXXXXX system. XXXX XXXXXX the provision XXX XXXXX XXXX XXXXXXX, XXX XXXX existence XXXXXXXXX to XXX unease XXXXX small developing XXXXXXXXX over such potential XXXXXXXX.XX </p> <p>37. If XXX enters XXX economy in XXXXXXXXXX in which competing XXXXXXXX XXXXX XXXXXXX exist, FDI may XXXX XXXXXX domestic investments that XXXXX have been undertaken by XXXXXXXX producers. Even in XXX activities beyond XXX current reach of XXXXXXXX investors, XXX may XXXXXXX XXXXXXXXXXX by XXXXXXXX XXXXX XXXXX, with XXXXXX nurturing, XXXXX XXXXX the XXXXXX XXXXXXXXXXXX. XXX XXXXXXX becomes XXX XXX XXXX XXXXX XX the foreign investment XXXXXXXXXXXX uses predatory XXXXXXXXX to force competitors out XX business, or XX retard their establishment. XXXXXXXXXX in places where the XXXX governments XXXX efficient competition XXXXXX tools and XXXXXX XX keep XXXX behavior in XXXXX, a XXXXXX FDI XXXXXXXX XXX inhibit the XXXXXXXXXXX XX local XXXXXXXXXX. In most cases, crowding out XX XXX XXXX not necessarily XXXX an XXXXXXXX reduction in XXXXX XXXXXXXXXX, but rather that XXX XXXXXXXX XX XXX XXXXXXXXXXXXX XX FDI inflows. </p> <p>38. XXXX world XXXXXXXX suggests XXXX while XXXXXXXX in or neutral XXXXXXX XX FDI XXXXXXXX, XXXXXXXX out XX not XXXXXXXX XXXXXX. XXXX XXXXXXX on the domestic XXXXXX </p> <p>18UNCTAD XX. XXX. </p> <p>XX </p> <p>XXXXXXXXX. In an XXXXXXXXXXX XXXXXXXX XXXXXXX out to investigate XXXX XXXXX, it XXX XXXXX that XXXXXXX XXXXXXX XXXXXXXXX in XXXX of XXX XXXXXXXXX, XXXXX XXXXXXXX in XXX XXXXXXXX out XXXXXXXX with XXXXX frequency, taking XXXXX in 25 percent XX XXX countries each.XXX general XXXXXXXXXX is that whereas XXX existence XX XXXXXXXX out XXXXXX be ruled out, it does XXX appear to XX the XXXXXXX XXXX. Equally XXXXXXXXXXXX XXX XXX XXXXXX actions XX mend XXX problem. In XXXXX, XXX XXXXXXX, XXX policy XX XXXXXXXX foreign XXXXXXXXXXX in certain XXXXXXXXXX XXXXXX XXX to the emergence of successful XXXXXXXX XXXXXXXXX. In XXXXXX, XXXXXXX, XXX XXXX XXXXXX intervention in XXX XXXXX XXXXXX XX XX XXX XXXX XXXXXX but XXXX uncertain XXXXXXX. The message is XXXX that instead of XXXXXX XX XXXXX XXX problem XXXXXXX “XXXXXXXXXXX”, i.e. XXXXXXXXXXX XXX XXXX entering XXXXXXX XXXXXXX, efforts should XXXXXXXXXXX XX enforcing appropriate competition policies XXX XXX related regulations so XX to XXXXXXX XXXXXXX practices in the domestic markets. </p> <p>X. XXX Balance XX Payment XXXXXXX as a XXXXXX XX FDI </p> <p>XX. Another wide-spread XXXXXXX XXXXXXXXX XXX is that to the extent that profits are XXXXXXXXXXX, XXXX XXXXXXXXXX a XXXXXXXXX outflow XXXX has to be set XXXXXXX XXX XXX annual contribution XX FDI inflows XX a XXXX country’s XXXXXXX of XXXXXXX. XXXX issue was of XXXXXXXXXXXX XXXXXXXX in the XXXXX XXXXX, when a majority of XXXXXXXXXX XXXXXXXXX faced XXXXXXXXX XXXXXXX XXXXXXXX constraints. With XXXXXXXXX XXXXXXX XXX XXXXXXX accounts XXXXXXXXXXXXX in many developing countries, this XX less of a XXXXXXX. However, XX XXXXX XXX XXXXX a XXXXXX XX XXXXXXXXX with various XXXXXXX XX foreign XXXXXXXX controls, XXX balance XX payment issue remains XXXXXXXX. </p> <p>XX. XXXXXXXXXXXX, the gravity of XXX problem appears XX be restrained. Comparisons XX repatriated XXXXXXXX and XXX XXXXXXX XXXXXX XXX 1990s show that even in Africa, where XXX repatriation XXXXX XXX the highest (an XXXXXX XXXXXXX of 75 percent), XXXXX was never a negative external balance XX a XXXXXX XX XXX. XXXXXXXX, XXXXXXX XXXXXXXX effects need to XX taken into consideration when XXXXXXXXX XXX XXXXXXX of XXXXXXX impacts XX XXX. As XX often XXX XXXX, FDI in trade activities generates XXXXXXX exchanges through exports, which counter XXX financial XXXXXXXX XX XXXXXXXXXXX XXXXXXX. XXXX with XXXXXXXX in non-tradable activities, FDI XXX XXXXXXX the competitiveness of XXXXXXXX XXXXXXXXXX, XXXX XXXXXXXXXXXX to the overall XXXXXX XXXXXXXXXXX of the host XXXXXXX. XXXXXXXXX, in XXX long run, FDI XXXXXX not be a XXXXX for the XXXXXXX of XXXXXXX problem, except in countries with seriously XXXXXXXXXX XXXXXXX exchange regimes. In this case, XXX real XXXXXXXX XX not restricting XXX, XXX rather addressing XXX foreign exchange constraints of the XXXXXXXXX. </p> <p>X. XXXXXXX XXXXXXXXX Created XX FDI </p> <p>XX. The XXXX XXXXXX XXXXXXX with XXXXXX to XXX XX undoubtedly that XXXX XXXXXXXXXXX are XXXXXXXX based, with limited overall impact on XXX XXXXXXXXX countries, XXX benefiting XXXX a XXXXX XXXXX of XXX population. Such anxieties are most exemplified by XXX mining and other raw XXXXXXXX XXXXXXXXXX projects, XXXXX are typically XXXX capital XXXXXXXXX and </p> <p>XXXX cit. </p> <p>14 </p> <p>XXXXXX a XXXXX XXXXXXXX XX the national XXXXXXXXX. XXXX XXXXX XXXX few linkages, either backward or forward, XXXXX with XXX XXXX economies, XXXXXX their indirect effects on XXX XXXXXXXX economy XXXXXXXXXX. To XXXX things XXXXX, sudden large inflows of foreign XXXXXXXX tend to XXXXX the real XXXXXXXX XXXX XX the XXXX XXXXXXX XXX XXXX render many XXX-XXXXXXXXXX XXXXXXXXXX XXXXXXXXXXXX (the XXXXX XXXXXXX). Moreover, XXXX XXXXXXXX often display low XXXXXXX retention for host countries XXXXXXX a XXXXX fraction of XXXXXX XXXXXXXX XXXX immediately XXXXXXXX XX XXXXXXX XXX XXXXXXX XXXXXXX XXXXXXXXXX.XX </p> <p>42. Another XXXXXXX XX XXX XXXXXXX XXXXXXXXX is XXX XXXXXX Processing XXXXX (XXXX), XXXXX have XXXXXX a popular strategy in XXXXXXXXXX countries XX XXXXXX XXXXXXX and to promote employment. XXXX XXX XXXX XXXXX of exemptions XXX special XXXXXXXXXX granted to investments XXXXXXX in XXX EPZs, they too XXXXXXX XXXX XXXXXXX linkage with XXX XXXXX economies at XXXXX. XX XXXXXXXXXX, low labor XXXXX XXX XXXXXXXXX of XXXXXX XXXXX XXX XXXXXXXXXXX XXX often XXX main XXXXXXXXXX XXXXXX by XXX XXX in XXXX locations, who also tend XX XX footloose XXX have XXXXXX XXXXXXXXX XX transfer XXXXXX or XXXXXXXXXXXX. XXXXXXXXXXXX, XXXX though the XXXXXXXXX export XXX XXXXXXXXXX benefits are XXXXXXXXXX, XXX long-term XXXXXXXXXXXXXX and XXXXXXXX XXXXXXX of XXXXX XXXXX are XXXX XXXXXXX. </p> <p>43. However, despite the natural tendency XX XXXXXX XXXXXXXX XXX XXXX XXXXXXX XXXXXXX economies, XXXX does XXX XXXX XX be the case and it XX not XXXXXX enough XXX developing XXXXXXX governments XX XXXX XXXX XXX XXXXXXX investments into these XXXXXXXXXX. XXXX XXXX need to do is XX create the right XXXXXXXXXX and XXXXXX XXXXXXXXXXX XXX such XXXXXXXXX to XXXXXXX the XXXXX XX XXXXX activities. In XXX mining and natural resource XXXXXXXX, for example, XXXXX have XXXX successful examples of countries which XXXXXXX XX XXX prudent macroeconomic policies XX guard against XXXXXXXXX XXXXXXXX XXXX appreciation and XXXXX regulations to minimize the XXXXXXXXXXXXX XX insiders XXX corruption and XX use the windfall XXXXX XXX XXXXXXX XXXXXXXXXXX.XXXX many developing countries, some XX XXX EPZs XXX turning into “XXXXX” XXXXX XXXX a number XX XXXXXXXXXX to ensure XXXXXXX technology and skills XXXXXXXX both XXXXXX and outside XXX zones. </p> <p>III. The Determinants of FDI Location </p> <p>XX. With XXX XXXXXX XXXXXXXXXX of FDI in world XXXXXXX, numerous XXXXXXXX XXXX XXXX XXXX XX XXXXXXX XXX factors XXXX XXXXXXX XXX size and location. XX remarked by XXXXXXX (XXXX), “XXX growth of XXXXXXX XXXXXX XXXXXXXXXX has XXXX XXXXXXXX XX the growth XX XXXXXXXXXXXX specially XX XXX XXXXXXXXXXXX XX XXXXX XXXXXXXXXXX.”22From XXXXX XXXXX XXX XXX XXXX developed XXX developing countries, XXXXXXXXXXX have examined </p> <p>XXXXX XXXX, X. X. (XXXX),XXXXXXXXXX development in mineral economies: the resource curse thesis, London: Routledge; and Sachs, X. and X. M. Warner (XXXX). “XXXXXXX resource abundance and economic XXXXXX.” XXXX Working Paper 5398. XXXXXX examples include Botswana, Chile, Indonesia, Malaysia, XXXXXXXXX, XXXXXX XXX XXXX. XXXXXXXXX, J.P. (1980). “Determinants XX foreign XXXXXX XXXXXXXXXX: a XXXXXX,”Weltwirtschaftliches XXXXXXX, XXX. XXX. </p> <p>XX </p> <p>XXXXXXXXX, XXXXXXXX, XXXXXX, XXX policy variables in their XXXXXX XXX “XXX XXXX important” determinants of FDI flows. XXX XXXXXXXXXX below synthesizes the results XX this vast literature XXX summarizes the XXXXX elements XX XXXXXXXXXXXXXX XXXX XXXX foreign XXXXXXXXX to a XXXXXXX. </p> <p>45.Market demand. XXX flows XX FDI is positively influenced XX XXX XXXX XX a XXXXXXX’s XXXXXX demand as XXXXXXXX XX XXX XXX capita. This confirms the casual XXXXXXXXXXX that XXXX FDI XXXXX XX affluent OECD XXXXXXXXX and it is XXXXXXXXXXXX XXXX XXXX market-XXXXXXX XXXX XX XXX. Even in developing XXXXXXXXX, where FDI XXXXXXX XXXX XX be more XXXXX-XXXXXXX, a XXXXXXX’s XXXXXXX development XXXXX still has a XXXXXX bearing XX how XXXX XXX it XXXXXXXX. </p> <p>46.Growth XXXX. XXX XXXXX to where XXXX XXXXXXXX growth XXX XXXX XXXXXXXX. A virtuous XXXXXX XX observed XXXX: XX same XXXX that FDI XXXXXXXXXXX significantly to economic growth, faster economic XXXXXX attracts more XXX XXXXXXX it XXXXXXXXX XXXXXXX investors’ confidence in the economy, which in XXXX pushes XXX growth rate XXXX higher. In XXX XXXXX developed XXXXXXXXX, studies XXXX shown that XXX in fact follows, not XXXXXXXX, some initial XXXXXX or XX XXXXX XXX promise of XXXXXX. </p> <p>47.XXXXXXXXX stability. Quite XXXXXXXXXXXXXX, incidences of political XXXXX, XXXXXXXXXXXXXX, riots, or armed XXXXXXXXX XXX XXXXX a dominant negative XXXXXXXXX XX foreign XXXXXXXXX’ investment decisions. Indeed, XXXXXXXX changes of governments XXX XXX XXXXXXXXX policy changes can XXXXXX an investor’s assets XX zero overnight. In the XXXXXXX XX significant XXXXXXXX of XXXXXXXXXXXX XXXXXXX XXXXXXXXX (e.g. oil), rarely would XXX foreign investors XXXXXX XXXXXXX XXXXXXXXX risks or frequent XXXXXX XXXXXXXXX. </p> <p>XX.Macroeconomic XXXXXXXXX. A XXXXXXX’s XXXXXXX macroeconomic performance, XXXX XX XXX XXXXXXXXX rate XXX balanced XXXXXX XXXXXXX, is a consistently significant factor in XXXXXXX XXX decision making of XXXXXXX XXXXXXXXX XXXX XXXXXXXXX XXXXXXXXXX locations. XXXXXXX macroeconomic instability makes it XXXXXXXXX for XXXXXXXXX XX XXXXXXXX the true XXXXX and returns of their XXXXXXXXXXX, only in rare XXXXX XXXXX XXX flows to places where XXXXX is hyperinflation or severe imbalances in XXXXX XXXXXXXX XXX external XXXXXXXXX. </p> <p>XX.XXXXXXXXXXXXXX. XXXX regards to FDI, infrastructure XXXXXXXXXXX both physical (e.g. roads XXX power) XXX XXXXXX (e.g. XXXXXX and education) concepts. It XXX been repeatedly XXXXX XXXXXX the XXXXX XXXX a XXXX-developed infrastructure XXXXXXX and a well-XXXXXXX XXXXX XXXXX XXX XXXXX elements of XXXXXXXXXXXXXX XX foreign investors. XXXX XX especially XXXX XXXXX XXXX XXXXXXX XXX (e.g. XXXX-XXXX transfer XX advanced technology) is concerned. </p> <p>XX.Regulatory environment. It is increasingly XXXXXXXXXX that the administrative XXX regulatory environment of a country XXX have a significant XXXXXXXXX XX XXX XXXXX of XXX XXXXX. While large XXX XXXXXXXX investors may be able XX XXXXXX cumbersome and XXXXXX procedures, they may prove XXXXX XX XXX XXXXX XXX growth of XXXXX XXX medium enterprises. XXXXXXXX, XXXXXXXXX, discriminatory, and non-XXXXXXXXXXX regulations often lead to corruption, which XXX XXXX shown XX be a fatal XXXXXXXXX XX XXX. </p> <p>16 </p> <p>XX.XXXXXXXXXX promotion. XXXX a country has XXXXXXXXXXX a XXXXXXXXXX XXXXXXXXX investment climate, how much XXX it XXXX depends also on XXX XXXXXXXXX XXXXXXX to attract XXXXXXX investment. XXXXXXX, no XXXXXX XX XXXXXXXXX XXX XXXXXXXXXX for a truly investment-XXXXXXXX environment, XXX when XXXXX XXXXXXX XXX XXXXXXX – XX it true in XXXXXXXXX XXXXXX XXXXXXXX a XXXXXXX level of XXXXXXXXXXX – promotion XXXXXXX XX XXXX a difference. </p> <p>52. In this context, mention should XX XXXX to the fiscal incentive XXXXXXX that host XXXXXXXXXXX XXXXX XXXX obliged to offer in order XX XXXXXXX FDI. XXXXX have indeed XX examples XX such “tax heavens” XXXXX XXX XXXXXX successful XXXX mobile XXXXXXXXXXXXX companies. XXXX economic XXXXXXX XXX XXXXXXX of international XXXXXXXXX, however, XXXX XXXXXXXXXX shown XXXX XXXXX XXXXXXXXXX XXX XXX XXXXXX as XXXXXXXXXXX in XXX location decisions XX foreign investors as it is XXXXXXX XXXXXXXX. XXXX XX, even XXXXXX all XXXXXXXXX would XXXX XXX lowest XXX XXXXXXXXXXX XXXX it XX possible – just like they XXXXX prefer low XXXXXX costs XXXX XXX XXXXX conditions are equal - the XXXXXXX XXXXXXX XXXXXXXXX XXXXX XXX XXX more important in their site XXXXXXXXXX than XXXXXXX fiscal XXXXXXXXXX. Whether investment incentives are XXXXXX XXX a XXXXXXX XX XXXXXXX FDI XXX what XXXXX XX incentives to use XXXXXX largely on the XXXXXX XX the prospective investors’ activities, their XXXXXXXXXX for XXXXXXXXX abroad, XXXX whom XXX XXXXXXX country is competing XXX these investors, and if XXX XXXXXXX XXX XXX fiscal XXXXXXXX XX swallow the revenue XXXXXX and the administrative capacity XX manage its chosen XXXXXXXXX XXXXXXX. Overall, global companies XXXX XXXX XXXXXXXXXX XX XXX XXXXXXXXXX and XXXXXXXXX XX a country’s XXX system than generous XXX rebates. </p> <p>XX. What Do the States XXXX XX XX? </p> <p>53. XXX previous discussions highlight the XXXX of XXX in XXXXXXXX XXXXXXXXXXX – XXXXX not a panacea, it XX a XXXXXXXX ingredient XX the XXXX XXXX sustainable growth. XXX developing countries, it presents XXX XXXX XXXXXXXXX way XX XXXXXXX XXXXXXXXXXXX XXX to develop an XXXXXXXXXXXXXXX competitive XXXXXXX sector; it creates employment XXX XXXXXX opportunities; XXX it XXXXXXXX an important vehicle XX raise environmental XXX XXXXXX standards. XXXX developing countries XXXX XXXXXX these benefits. But neither FDI nor XXX its benefits flow automatically. XXXXXXX investors XXX fallible XXXXXX whose first and foremost XXXXXXXXX XXX investing anywhere is XX maximize XXXXX XXXXXX profits, with or without benefits to XXXX XXXXXXXXX. Recognizing this simple business principle, it is XXXXXXXX to XXXXX out the XXXX XXXXX XX XXX and avoid XXX XXXXXXXX aspects. </p> <p>XX. XXXXXXXX, XXXXXXX XXX XXXXXXXXXX XXXXXXXXX of XXX in XXXXXXXX XXXXXXXXXXX, it does XXX XXXXXXX XXXXXXX XX XXX XXXXXXXXXXXXX problems. XXX example, XXXXX FDI helps XXXXXXX income levels, it XXXXXX XXXXXXXXXXXXX reduce existing XXXXXXXXXXXX XXX can even exaggerate them in XXX XXXXX run by XXXXXXX a premium XX XXXXXX with XXXXXX skills. Public XXXXXXXX XXXX XX be in XXXXX to support XXX poorer XXXXXXXX of XXXXXXX. XXX role XX FDI in this process XX, XX XXXXXX of its impact XX XXXXXXXXXXXX XXX growth, XX XXXXXXXX the </p> <p>17 </p> <p>resources needed to fund the XXXXXXXXXX-led XXXXXXXX that XXXXXXX XXXXXX XXXXXX XXXX and XXXXXXX basic XXXXXX services. Moreover, the XXXXXXXX of XXXXXX XXXXXXXX to XXX poor – from XXXXXXXXX XXXXXXX to XXXXXX to basic XXXXXXXX XXXX as water and energy – can XXXX benefit from XXXXXXXX XX XXXXXXX investors. XX XX thus imperative XXX XXX XXXXXXXX XXXXXXXXXXX XX XXXXXX XXX XXX-conditions for XXX XX XXXX in and work its XXXXXXX. </p> <p>XX. XXX XXXX XXXXXXXXXXX XXX- XXXXXXXXXX XXX XXX are enumerated in the previous XXXXXXX. XXX XXXXXXXXXXX XXXX thus XX XXXXXXX (i) XXXXX XXXXXXXXX XXX macroeconomic stability XXXX offers XXXXXXXXXX XXXXXXXXXXXXXX so XXXX XXXXXXXXX XXX XXXX normal XXXXXXXX decisions; (XX) a XXXXX-based legal XXX XXXXXXXXXX environment that XXXXXXXXXXX XXXXX business XXXXXX than XXXXXXXXX it; (iii) an adequate XXXXXXXX and social infrastructure that XXXXXX the XXXXXX XXXXXXXXXXX XX the market and XXXXXXXXXXXX of XXXXXXXXX; XXX (iv) appropriate XXXXXXXXXX promotion efforts that XXXXXXXXXXX information XXXXX XXX investment XXXX and XXXXXXX existing and XXXXXXXXX investors. </p> <p>56. XXXXXX XXXXX XXXXX XXXXXXXXXX, XXX governments will XXXX XXXX to address XXXXXXX XXXXXXXX XXXXXX in order to XXXXXX XXX realization of the XXXXXXXX of XXX. They XXXXXXX:23 </p> <p>57.An XXXX XXX XXXXXXXXXXX playing field.XXX benefits of FDI tend to XX XXXXXXXXX XXXX XXXXXXX XXXXXXXXX XXXXXXX XX an XXXX and XXXXXXXXXXX XXXXXXX field. To this XXX, XXXXXXXXXXX XXXX XX XXXXXXX a XXXXXXXX XXXXXXXXXXX where XXXXXXXXXXX, free XXXXX, consumer choice and XXXX XXXX determine XXX gains XXX XXX XXXXX. Foreign and XXXXXXXX investors need to XX treated equally XX XXXX as possible.24As XXXXX demonstrated in economic XXXXXXXXXX, exposure XX XXXXXXXXX XXXXXXXXXXX on an XXXX playing XXXXX is the XXXX XXXXXXXXX XXXXXXXXX XXX foreign XXX domestic companies XX XXXXXXX technology XXX XXXXXXXXXX XXXXXXXXX, while free XXXXX is XXX XXX XX XXXXXXXXXXXX effective linkages between foreign investors and XXXXXXXX XXXXXXXXX XXX XXXXXXXXXXXX XXXX help diffuse best XXXXXXXX in the XXXX XXXXXXX.25 </p> <p>58.Domestic XXXXXXXX to exploit XXX XXXXXXXX.X XXXXXXX XXX competitive XXXXXXXXXX XXXXXXX XXXXXXX XXX XXXXX for XXX to XXXXX XXX raise the potential for XXXXXXXXXXXX growth in the XXXX XXXXXXX, XXX XXXXXXXXXXXX XXXX XXXX XXXXX XX XXX domestic XXXXXX are XXXXXXX XX XXXXXXXXXX XX XXX new incentives. As XXXXXXXXX in XXX XXXXXXXX XXXXXXXX, the XXXX serious deterrent XX wider XXXXXXXXX of XXXX practice is a lack of indigenous XXXXXXXXXXXX XX XXXX XXXXXXXXX XX XXX opportunities. XXX XXX policy measures are thus to XXXXXXX the XXXXXXXXX XXX infrastructure so as XX increase XXX XXXXXXXX absorptive XXXXXXXX of XXX fruits of FDI. </p> <p>XX.Building up environmental and XXXXXX XXXXXXXXX.As globalization gradually leads XX higher environmental and XXXXXX XXXXXXXXX of FDI, governments XXXX to XXXXXX their </p> <p>XXXXXX XXXXXXXXXX draws XXXX Klein XX al. (XXXX). XXXX is XXXXXXXXXX that XXXXX XXX XXXXXXX XXXXXXXX XX FDI as XXXXXXXX XX XXXXXXXX XXXXXXXXXXX, XXXXXXXXXXX in XXXXXXXXX are XXX entirely XXXXXXXXX. But XXXX XXXX XX be XXXX XX a XXXXXXX. 25The XXXXXXXX impacts of XXX are most XXXXX XXXXXX XX XXXXXXXXXXXXX XXXXXXXXX in the domestic markets and XXXXXXXXX XXXXXXXXXXX XXXXXXX to certain firms. See Lall, S. and X. Streeten (1977),XXXXXXX XXXXXXXXXX, XXXXXXXXXXXXXX and developing countries, Westview XXXXX; XXX Graham, X. X. (XXXX). “XXXXXXX XXXXXX investment in XXX XXXXX economy.” IMF XXXXXXX Paper XX/95/59. </p> <p>XX </p> <p>own policies XX fit XXXX XXX XXXXXXXX world norm. In places where there remains a wide gap between the XXXXX XXXXXXXXX XXX those XX a XXXX XXXXXXX, XXXXXXXXX XXXXXXX investors XXX be XXXXXX XX XXXX away out XX XXXXXXXXXXXX XXXXXXXX or XXXX XXX face XXX much competition XXXX domestic XXXXX not subject XX as stringent XXXXX. To be XXXX, XXXXXXX standards XXXX costs, XXXXX XXX affect both XXXXXXXX XXXXX XXX certain XXX-XXXX-XXXXXXX XXX. Governments have XX XXXXXX how to XXXXXXXX XXXXXXXXXX for XXX long term benefits of their XXXXXXXX XXXXXXXXXXX. </p> <p>XX </p> <p>XXXXXXXXXXXX </p> <p>XXXXX J. “XXXXXXXXXXXXX policy XXX competitiveness in a globalized XXXXXXX: XXXXXXXXXX issues and a review XX XXX XXXXXXXXX evidence”, in OECD Globalization and Environment: XXXXXXXXXXX Perspectives, 1997. </p> <p>Agarwal, J.P. “Determinants XX foreign XXXXXX investment: a survey,”XXXXXXXXXXXXXXXXXXXX XXXXXXX, Vol. 116, XXXX. </p> <p>XXXXXX, B. and A. E. Harrison. “Do XXXXXXXX firms benefit from XXXXXX XXXXXXX XXXXXX investment? XXXXXXXX XXXX XXXXXXXXX”,XXX American Economic XXXXXX, Vol. XX, No. 3, 1999. </p> <p>Auty, X. X.XXXXXXXXXX XXXXXXXXXXX in mineral XXXXXXXXX: XXX resource XXXXX XXXXXX, XXXXXX, XXXXXXXXX, XXXX. </p> <p>XXXXXX, J. and R. XXXXXXXXX. “XXXXXXXXXXXXX and the XXXXX of local firms”. XXXXXXXXXX XXXXXXXXX section in XXXXX XXXXXX, XXXX. </p> <p>XXXXX, X.X. “Notes on growth XXXXXXXXXX,” XXXX Working XXXXX No. XXXX, XXXX. XXXXX G. and X. XXX.Interfirm XXXXXXXX and productivity XXXXXX: evidence </p> <p>XXXX XXXXXXXXX XXXXXXXXXXXXX,mimeo, XXX World XXXX, XXXXXXXXXX, D.C., 2000. Borensztein, X. XXX J. X. XXX. “How does XXXXXXX XXXXXX investment XXXXXX XXXXXXXX </p> <p>XXXXXX?”, NBER XXXXXXX XXXXX No. 5057, 1995. </p> <p>XXXXXXX, P. XXX J. Sherman. “XXX Broader impacts XX XXXXXXX direct XXXXXXXXXX XX XXXXXXXX development in Thailand: XXXXXXXXX XXXXXXXXX”, 1998. </p> <p>Djankov, S. XXX X. XXXXXXX. “Foreign XXXXXXXXXX and XXXXXXXXXXXX growth in Czech enterprises”, XXXXXX Research Working Paper XXXX, The World Bank, Washington, X.X., XXXX. </p> <p>XXXXX, X and X. XXXXXX. “XXX XXXXXX indirects XXX entreprises XXXXXXXXXXXXXXX sur l’XXXXXX XXX pays d’XXXXXXX”, XXX XXXXXXX XXXXX No. 72, XXXX. </p> <p>XXXXXXXX G. XXX A. Harrison. “XXXXXX XX greener pastures? Multinational XXX XXX evidence XXXX XXXXX, XXXXX XXX XXXXXXXX,” RPED XXXXX No. 81, XXX XXXXX Bank, XXXXXXXXXX, D.C., XXXX. </p> <p>XXXXXX, X. (ed.).Private capital flows and the environment: XXXXXXX XXXX Latin XXXXXXX,XXXXXXXXXX, XXXXXX XXXXX XXXXXXXXXX, XXXX. </p> <p>XX </p> <p>XXXXXX, E. H. “Foreign XXXXXX XXXXXXXXXX in XXX world XXXXXXX.” IMF Working XXXXX WP/95/XX, 1995. </p> <p>Klein, X., X. Aaron, XXX X. XXXXXXXXXXXX. “XXXXXXX direct XXXXXXXXXX XXX XXXXXXX Reduction”, Policy XXXXXXXX Working XXXXX No. 2613, The XXXXX XXXX, Washington, D.C., XXXX. </p> <p>Lall, S. “Vertical XXXXX-firm XXXXXXXX in LDCs: an empirical XXXXX,”Oxford XXXXXXXX of XXXXXXXXX and XXXXXXXXXX, Vol. 42, No. 3 on XXXXX, 1980. </p> <p>XXXX, S. and P. Streeten.XXXXXXX investment, transnational and developing XXXXXXXXX, XXXXXXXX XXXXX, XXXX. </p> <p>XXXXXXX, D.Pollution and the struggle for XXX world XXXXXXX, Cambridge, Cambridge XXXXXX, Routledge, XXXX. </p> <p>XXXXXXXX, A. “Growth and slowdown in advanced XXXXXXXXXX XXXXXXXXX: techniques of XXXXXXXXXXXX assessment”,Journal XX Economic Literature, Vol. 25, 1987. </p> <p>Paper XXXXXXXX for XXXX Level Roundtable XX XXX and its XXXXXX XX Poverty XXXXXXXXXXX, December 1998. </p> <p>XXXXXXX, C.Multinational XXXXXXXXXXXX, the XXXXXXXXXXX and the XXXXX XXXXX, North XXXXXXXX, Duke XXXXXXXXXX XXXXX, XXXX. </p> <p>XXXXXXXXXXXX, X. XXX X. K. XXXX. “XXX effects XX XXXXXXX XXXXXXXXX in XXXXXX: evidence XXXX XXXXX, XXXXX and Zimbabwe”, RPED XXXXX No. 81, The World Bank, XXXXXXXXXX, X.C., 1997. </p> <p>XXXXX, X. and X. X. Warner. “Natural resource abundance XXX XXXXXXXX growth.” XXXX XXXXXXX Paper </p> <p>XXX United XXXXXX Charter, 1944. </p> <p>XXXXXX,World XXXXXXXXXX XXXXXX, XXXX. </p> <p>UNCTAD,World XXXXXXXXXX XXXXXX, XXXX. </p> <p>XXXXXX.XXXXX Investment XXXXXXXX XXXXXXXXX, Brazil XXX XXXXXXXX, XXXX. </p> <p>XXXXXXX , X. “Racing to XXX XXXXXX? Foreign XXXXXXXXXX XXX XXX XXXXXXXXX in developing XXXXXXXXX”, XXXXX, XXX XXXXX XXXX, XXXXXXXXXX, X.X., XXXX. </p> <p>21 </p> <p> </p>">
