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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 sustainable economic growth and as part XX a XXXXXXXXX XX XXXXXX XXXXXXXXXXX. This section of the XXXXX XXXX XX highlight the most important channels through XXXXX XXX makes a significant XXX irreplaceable impact on the XXXXXXXX development XX the host countries. At XXX XXXX time, it XX XXXXXXXXX to XXXXXXXXX that, like all XXXXXX, XXX XX not XXX good XX XXX. A XXXXXXXX XXXXXXXXXX XX devoted to the XXXXXXXXX XXXXXXXX impacts of XXX XXXXX on XXXX economies. </p> <p>X. An XXXXXXX XX XXXXXXXX Growth </p> <p>X. The potential for XXXX XXXXXX growth XXX XXXXXXXX XXXXXXXXXXX over XXXX. XXXXXX the industrial XXXXXXXXXX, it took European countries some 350 XXXXX for XXXXXX per capita to double. As the XXXXXXXXXX revolution XXXXXXXXXXX in the 19thcentury, XXXXXXX, the XXXX XXXXXXX, XXX able to XXXXXX its per XXXXXX XXXXXX in just over 60 XXXXX. XXXXX XXX XXXXX War XX and XXXXXXXXXX towards XXX end XX the XXXXXXXXX century, XXXX developing countries, XXXX XX XXXXX, Botswana, Chile, XXXXXXX, XXX XXX high XXXXXXXXXX East Asian XXXXXXXXX, XXXXXXX XX XXXXXX per XXXXXX income in less than 10 years. (XXXXX 4.) For XXX XXXXX time in XXXXXXX, it is XXX possible XXX a poor person from an XXXXX-XXXXXXXXX country XX rise XXXX poverty XX a reasonably comfortable XXXX XXXXXX a single life span. </p> <p>XXXXX X: Time Needed XX Double Income </p> <p>XXXXXX: Crafts (2000). </p> <p>10. Just what is it XXXX makes such rapid progress XXXXXXXX? XXXXXXXX studies offer many potential explanations. XXXXXXXXX to XXX XXXXXX XXXXXX theory, XXXX term economic growth XXX be XXXXXXXXX XX the XXXXXXXXXXX of XXXXXX in XXX sources, i.e. XXX XXXXXXXXX in XXXXXX XXXXXX (XXXXXXX XXX labor ) and in total factor productivity (XXX), which reflects technological advances XXX other XXXXXXXXXX XXXXXXXXXXXX in resource XXXXXXXXXXX.XXX this “XXXXXXXXXX” XXXXXX XXXXXXXXX, FDI has XXXXX XXX ability to contribute XXXXXXXXXXXXX XX all XXXXX components of XXXXXX: FDI XXXXXXXXX capital XXXXX, XXXXXX XXXXX XXXXXXX accumulation (XXXXXX usually unmeasured in labor stock), and speeds up XXXXXXXXXXXXX XXXXXXXX in XXXX countries. XXXXXXXXXXXX, XXX XXXX XXXXXX XXXXXXX XX XXX on XXXX economies are through its XXXX in the XXXXXXXXXXXX XX XXXXXXXXXX </p> <p>XXXXX details XX XXXXXX XXXXXXXXXX theory can be XXXXX in XXXXXXXX, A. (XXXX), “XXXXXX XXX slowdown in advanced XXXXXXXXXX ecibinues: XXXXXXXXXX XX quantitative assessment,”XXXXXXX XX XXXXXXXX Literature, Vol. XX; XXX Barro, R.J. (1998) “XXXXX XX XXXXXX XXXXXXXXXX,” NBER XXXXXXX XXXXX No. 6654. </p> <table><tbody><tr><td><p>XXX-Industrial XXXXXXXXXX </p></td><td><p>350 years </p></td></tr><tr><td><p>XXXXXXX, 1st Industrial Revolution </p></td><td><p>175 years </p></td></tr><tr><td><p>XXXXXXX, XXX 19thCentury </p></td><td><p>65 years </p></td></tr><tr><td><p>XXXX XXXXXXXXXX, XXXX World War XX </p></td><td><p>10 years or XXXX </p></td></tr></tbody></table> <p>X </p> <p>XXXXXXX and the XXXXXX XX XXX XX XXX recipients. XXXXX two XXXXXXX XXX XXXXXXXXX XXXXXXXXXX below. </p> <p>1. XXX XXX XXXXXXX XXXXXXXXX </p> <p>11. XXXX the Golden XXX investment boom after XXXXX War II XX XXX XXXX XXXXX economic miracles in the 1980s, XXXXX XX ample evidence XX demonstrate that XXXXXXXXXX XX a key XXXXXXXXXX XX XXXXXXXXX growth. XXXX XXX XXXX two XXXXXXX in XXXXXXXXXX, FDI XXX XXXX to play a growing XXXX in XXXX developing countries’ total investment. (XXXXXX X.) However, XXXXXXXX as the rise in the XXXXXXXXXX XX XXX may seem in host XXXXXXXXX’ XXXXXXXX flows, XXX is only XXXX of XXX total financing XX foreign investors in host XXXXXXXXX. At XXX same time XXXX XXXXXXX XXXXXXXXX mobilize XXXXXXXXX within XXXXX own corporate systems, their affiliates XXX XXXX raise funds through XXXXX, loans, and equity issuances. XX the XXXXXX XXXX XXXXX sources XXX in XXX international capital XXXXXXX, XXXX increase the XXXXX inflows of foreign XXXXXXXXX XXXXXXXXX for development. XXXXXX, XX data for XXXXXX States XXXXXXXXXXXXX corporations suggest, the flows XX XXXXXXXX XXXXXXXXX to host countries due to XXX presence of foreign XXXXXXXXXXX often XXXXXX XXX XXXXX XXXXX.3 </p> <p>Figure X: XXXXX of XXX XX XXXXX Fixed Capital XXXXXXXXX (%) </p> <p>XX XX XX XX XX </p> <p>X 6 4 2 X </p> <p>XXX EAP </p> <p>XXX LAC MENA XXX </p> <p>Early 1980s Late XXXXX XXXXX 1990s XXXX XXXXX </p> <p>XXXXXX : XXXXX XXXX, XXXXX XXXXXXXXXXX XXXXXX, XXXX. </p> <p>XX. Meanwhile, because XXXXXXXXXXXXX corporations typically have access XX a XXXX XXXXXXX of XXXXXXXXX XXXXXXX, XXX XXXX-adjusted XXXX of capital is XXXXXXX lower for XXXX XXXX the XXXXXXXX firms from XXXXXXXXXX XXXXXXXXX. This advantage enables XXXX XX XX more responsive XXXX XXXXX firms XX XXXXXXXXXX XXXXXXXXXXXXX and incentives. </p> <p>XXXXXXX, XXXXX XXXXXXXXXX Report, 1999. </p> <p>X </p> <p>XXXXXXXXXXXX, XXXX can undertake projects for XXXXX XXXXXXXX investors XX not XXXX XXX capacities XX assume or XXXXX XXX considered too XXXXX for XXXX country XXXXX. XX XXXX, they enlarge XXX investment frontiers in XXXX countries. XXXX time, XXXXXXXXXX XXXXXXXXX XX XXXXXXXX XXXXXXXXX may be XXXXXXXXXXX in activities XXXX XXX beyond their current XXXXX. In XXXX cases, FDI also serves to stimulate XXXXXXXX investment, whereby boosts XXX XXXXX host XXXXXXX XXXXXXXXXX XXXXXXX. XXXXXXXXX studies lend support XX XXXX “XXXXXXXX in” effects of XXX. In Borensztein et al (XXXX), XXX XXXXXXX, it was XXXXXXXXX XXXX the total XXXXXXXX in investment was between 1.5 XXX 2.X XXXXX the XXXXXXXX in the flows XX FDI.X </p> <p>XX. XXXX importantly, XXX not only adds XX external financial XXXXXXXXX for host country XXXXXXXXXXX, it XX also XXXX XXXXXX than XXXXX forms XX XXXXXXXXX. Typically, XXX is XXXXX XX a long-term view XX XXX XXXXXX, XXX growth potential XXX XXX structural characteristics of the XXXXXXXXX countries. XX is XXXX less XXXXX XX XXXXXXXXX in adverse XXXXXXXXXX XXXX XXXX lending or portfolio flows. XXXX XXXXXXX XX FDI XX XXXXXXX evident from Figure X, which compares XXX XXXXXXXXXXX of variations (XXX XXXXXX XXX XXXXX, XXX more XXXXXXXX XXX XXXXXXXX XXXXX) XX FDI XXXX that of XXXXXXXXX XXXXXXXXXXX and other forms of private XXXXXXXXX flows (XXXXXX debt) XX XXXXXXXXXX XXXXXXXXX between XXXX- 2000. </p> <p>Figure 4: XXXXXXXXXX of Capital Flows in Developing XXXXXXXXX </p> <p>7.X X.0 X.X X.0 3.0 X.0 X.X 0.0 </p> <p>XXXXX 1990s 1980s XXX XXX XXX </p> <p>XXXXX XXXXX </p> <p>1990s XXXXX LAC XXXX SAR </p> <p>1990s XXXXX </p> <p>XXXXX </p> <p>XXXXX 1990s </p> <p>XXX Portfolio Other </p> <p>Source: World Bank, XXXXXX XXXXXXXXXXX Finance, 2002. </p> <p>14. XXXXXXX, FDI is a much more stable XXXX XX XXXXXXXX XXXXXXXXX than XXX other XXXXX of XXXXXXXXX flows. Out of the 136 countries for XXXXX XXXX are XXXXXXXXX, only 27 XXXXXXXXX XXXXXXXXXXX more volatility in their FDI inflows than other XXXXX of XXXXXXXX </p> <p>4Borensztein, E. XXX J. W. XXX (1995), “How XXXX foreign XXXXXX investment XXXXXX XXXXXXXX XXXXXX?” NBER XXXXXXX XXXXX No. XXXX. </p> <p>6 </p> <p>XXXXXXX XXXXXXXXX XXXXXX the XXXXX, and this number was XXXXXXX XX XX in the XXXX turbulent XXXXX. XXXX recent data further XXXXXXX XXX resilience XX FDI flows: XXXXXX XXXXXXXXX XX absorb XXXXX XXXXXXX of XXX in XXX first half of XXXX year – it is the number X XXXXXXXXX of XXX XXXXX XXX developing countries (after China) - despite the current XXXXXXXX in XXXX country. </p> <p>XX. Finally, even XXXXXX XXX may XXXX a debt-creating XXXXXXXXX, it XX XXXXXXXXXXX equity investment.5Profits XXX repatriated XXXX XXXX a project XXXXXX XXXXXX XXX part of XXX XXXXXXX XX routinely XXXXXXXXXX in the XXXX XXXXXXX. XX XXXX, most XX the XXXXX are born XX the shareholders XX the XXXXXXX XXXXXXXXX. XXXX has XXXXXX XXXXXXXXX XXXX bank XXXXXXX, XXXXX must XX XXXXXX XXXX fixed XXXXXXXX XXXXXXXXXX of XXX performance of the project XXX XXXXX the loan was XXXX. XXXXXXXX, creditors XXXXX look towards taxpayers XX XXXX XXXX XXXXXXXX XXXX projects XXXX. XXXX is especially XXXX in times of systemic XXXXXXXXX XXXXXX, XXXX XXXXXXXXXX bail-outs XXX routinely sought XXX XXXXXXXX by XXX XXXXX, adding XX the tax XXXXXXX of XXXX country XXXXXXXXX. Therefore, FDI XXXX XX XXXXXXXXXX not lead XX a XXXX crisis and debt relief will never be an XXXXX. </p> <p>X. XXX and Productivity Growth </p> <p>16. In XXXXXXXXXXX economic thinking, XXXXXXXXXXXX XXXXXX XXXXXXXX the contribution XX exogenous technological changes to economic growth. XXXXXXX, XXX understandings XX XXX XXXXXX XXXXXXX, especially with XXX advent of the XXXXXXXXXX XXXXXX XXXXXX, XXXX XXX caution in such an interpretation. XXXXXXXXX on the XXXXXX XX XXX XXXXXXXXXX (XXXXX or capital XXXXXX), XXX XXXXXXXXX of the economy, and the XXXX XX substitution XXXXXXX factors XX XXXXXXXXXX, XXXXXXXXXXXXX XXXXXX XXX XX either XXXX or XXXX XXXX XXX growth. XX the same time, XXX XXXXXXXXXX XX the “XXXX” XXXX XX technological advance – organizational XXXXXXXXX, XXXXXXXXXX practices, tacit XXXXXXXXX, etc. – XX XXXXXXXXXXXX XXXXXXXXXX XX an XXXXXXXX part of the whole technological upgrade XXXXXXX, XXXXXXXXXXXX XX the overall productivity XXXXXX. </p> <p>17. XXXXXXXX its XXXXXXX XXXXX XX contribution XX economic growth, the XXXXXXXXXX of technological XXX XXXXXXXXXXXXXX XXXXXXX has long XXXX firmly established. XX XXX XXXX XXX-XXXXXXXXXX Revolution period, a long term XXXXXX XXXX XX X.X percent XXX year XXX XXXXXXXXXX remarkable. The XXXXXXXXXXXXX XXXXXXXXXXXX in late XXXXXXXXXXX Britain XXXXXXX XXX XXXXXX potential, but it XXX still lackluster XXXXXXXX XX XXX X XXXXXXX annual growth seen in XXX high performing XXXX XXXXX XXXXXXXXX in XXXXXX decades. XXXX like XXX XXXX growth in postwar XXXXXX, such XXXXX XXXXXXXX XXXXXX of the XXXXXXXXXX XXXXXXXXX in XXX second half XX XXX 20thcentury XXXX much XX the XXXXXXXXX in barriers to XXX emulation of XXXXXXXXX and organizational XXXXXXXXXXX from the world’s leading countries. Indeed, rather than re-inventing XXXX XXX already XXXXXXX XXXXXXXXX, those XXXXXXXXXX countries XXXX XXXX able to import XXX imitate the XXXX practice XXXX more advanced economies XXXXXXX unprecedented economic growth. XXX developing world XX XXXXX, the </p> <p>XXXX XXXX-XXXXXXXX component XX XXX accounts for XXXX than XX percent XX XXX XXXXXXX of FDI to XXXXXXXXXX countries XXXXXXX XXXX-XXXX. XXXXXX, World XXXXXXXXXX Report, XXXX. </p> <p>7 </p> <p>rapid and XXXXXXXXX XXXXXXXX XXX XXXXXXXX of “XXXX practice” XXXXXX XXXXXXX XXXXXXX XXX XXXX XXXXXXX XX XXXXXXXX XXXXXXXXXXX. </p> <p>XX. XXXX practice may be transmitted XXXXXX borders XX XXXXXXX mechanisms. XXXXXXX buyers of exports may provide XXX demand for upgrading, XX well XX XXXX level of technical assistance to XXXXXXXX firms. XXXXXXXX XXXXXXX goods XXX embody improved technology. Technology licensing allows countries to acquire innovations. XXXXXXXXXXX transmit knowledge. Yet, arguably XXX most XXXXXXXXX XXXXX of transferring XXXX XXXXXXXX XX FDI XX XXXXXXX investment tends XX package and integrate elements from all of the above mechanisms.XXX XXXX, XXX XXXX XXXXXXXXX benefit XX XXX is that it XXXXXXXX, along XXXX financial resources, access to XXX XXXXX range of XXXXXXXXXXXXX, XXXXXXXXXXXXXX XXX skill assets, as XXXX as the markets XX XXX XXXXXX company. With XXX XXXXXXXXXX, XXX vast majority XX the fast-XXXXXXX XXXXXXXXX XXXXXX XXXXXXX XX FDI to jump start XXX XXXXXXX their rapid XXXXXXXX transformation.7 </p> <p>19. XXX transmits best practice in two ways: internal transfers XX XXXXXXXXXX XXX skills XX the XXXXXXX XXXXXXXXXX in the host country, and technological diffusion XX a broad XXXXXXX of companies XXX institutions within the host country. XXXXXXXX XXX XXXXXXXX XXXXXXXXX of XXXX XXXXXXXX XXXXXXX principally the XXXXXXXXXX, to XXX XXXXXX XXXX XXXXXXX-owned firms outperform domestic XXXXXXXXXXXX, their XXXXXXXX still constitutes a XXXXXXXX asset XX XXX XXXX XXXXXXX.XXXXXX XX all, XXXX of the technologies are XXXXX on expensive X&D XXXXXXXX to branded XXXXXXXX XXXX XXXXX XXXXXXXXX will XXX sell XX unrelated parties. XXXXXX XXXXXXXXXXX are XXXX XXX XXXX mechanism for the host country to obtain the XXXXXX XXXXXXXXXXXX and XXXXXX its productive XXXX. XXXXXXXX, XXXXXXX foreign XXXXXXXXXX XXX generally XX XXX forefront to XXXXXXXXX XXX management XXX organizational techniques, XXXXXXX XXXXXXX standards, and XXXXXXXXX methods, they tend XX absorb XXXX practice more quickly than XXXXX firms. Thanks to their XXXXX learning XXXXXXXX, XXX affiliates XXX XXXXX XX a test ground of these new approaches in the XXXX country. Finally, for many developing XXXXXXXXX, XXXXX XXXXXXXXXXXX into a XXXXXX XXXXXXX’s international production XXXXXXX XX XXX XXXXXXX XXX for them to XXXX access XX XXXXXXXX or global markets. </p> <p>20. Nevertheless, the ultimate XXXXXX of XXX on XXXXXXXX economic XXXXXX XXXXXXX XX the XXXXXXXXX XX best XXXXXXXX XXXXXXX XXX XXXXX economy XX XXXXX. XXXX XXXXXXXXX process takes place XXXXXXX XXXX main channels: backward XXXXXXXX XXXX XXXXX XXXXXXXXX (XXXXXXXX), XXXXXXX XXXXXXXX with local XXXXXXXXX and XXXXXXXXXXXX, horizontal XXXXXXXX </p> <p>XXXXXX, M., X. Aaron, and B. XXXXXXXXXXXX (XXXX), “XXXXXXX direct investment XXX XXXXXXX XXXXXXXXX,” XXXXXX XXXXXXXX Working Paper No. XXXX, XXX World XXXX. XXXXXX and XXXXX are XXXXXXXXXXX the XXXX examples of XXXXXXXXX which achieved rapid XXXXXX with XXXXXXX reliance on FDI. This XXXXXXXX is XXXX XXXXXXXXX XX XXXXXXXXX, XXXXXXXXXX in XXXXXXXXX XXXXXXX a solid skill XXXX, a buoyant XXXXXXXXXXXXXXX spirit, a capable XXXXXXXXXXX, and conducive incentive regimes. </p> <p>8Many studies show that XXXXXXX ownership XXXXXXXXXX correlates XXXX XXXXXXXXXXXX increases XX XXX XXXX. See Ramachandran, V. XXX M. X. XXXX (1997), “The effects of XXXXXXX XXXXXXXXX in XXXXXX: XXXXXXXX XXXX XXXXX, XXXXX and XXXXXXXX,” RPED XXXXX No. 81, The XXXXX XXXX.; XXXXXXX, S. XXX B. Hoekman (XXXX), “XXXXXXX XXXXXXXXXX XXX XXXXXXXXXXXX XXXXXX in XXXXX enterprises,” XXXXXX XXXXXXXX Working Paper XXXX, The World Bank.; XXX XXXXXX, X. XXX A. E. Harrison (1999), Do domestic XXXXX benefit from direct XXXXXXX investment? Evidence XXXX Venezuela,”The American Economic Review, Vol. 89, No. X. </p> <p>8 </p> <p>with XXXXX XXXXXXXXXXX, and XXXXXXXX XXXX local institutions such as universities and XXXXXXXX XXXXXXXXXX as XXXX XX vocational XXXXXXXX centers. To XXXXXXXXXX XXXXXXXXX, XXX most important channel of these is XXXXXXX sourcing: the purchase XX XXXXXX and XXXXXXXX XXXX XXXXX instead XX XXXXXXX XXXXXXXXX. </p> <p>XX. All XXXXXX (cost, XXXXXXX, reliability, etc.) being equal, local procurement is generally XXXXXXXXX than XXX’s XXXXXX XXXXXXXXX or in-XXXXX XXXXXXXXXX XXXXXXX proximity lowers XXXXXXXXXXX XXXXX and allows for XXXXXXX XXXXXXXXXXX and XXXXXXXXXXXXXX. This XX why whenever XXX XXXXX XX doing so are lower XXXX XXX XXXXXXXXX savings, XXXXXXX XXXXXXXXX have an interest in developing XXXXX suppliers, helping XXXX XXX up facilities, raise technological and skill levels, XXXXXX XXXXXX, XXX XXXXXX XXXXXXX. To XXX host economy, XXXX is XXXXX XXX of XXX most powerful XXXXXXXXX for transmission of XXXX XXXXXXXX. The strengthening XX these suppliers XXX in XXXX lead to various XXXXXXX spillovers XX XXX rest of the XXXXXXX XXXXXXX XXXXXXXXXXXXX effects, XXXXXXXX XX XXXXXXX XXXXX, enterprise spin- XXXX, XXX XXXXXXXXXXX effects. </p> <p>22. XXX extent to which XXXXXXX affiliates establish backward linkages with local suppliers varies from XXXXXXXX to XXXXXXXX and country to XXXXXXX. XXXXXXXX XXXXX is widespread concern in XXXXXXXXXX countries that foreign XXXXXXXXXX have too XXXXXXX XXXXXXXXXX with XXX rest XX XXX XXXX economy, XXXXXXX empirical studies XXXX XXXXXXXXXXXX XXXX in some XXXXXXXXXX (e.g. automobile) XXX in XXXXXXXXX XXXXX adequate XXXXXXXX XXXXXXXXXX XXX present, foreign investors made XXXXXXXXX XXXXXXX XX upgrade XXXXXXXXXXX suppliers XXX XXXXXX XXXX more XXXXXXX XX local suppliers XXXX domestic XXXXX.9 </p> <p>23. XXXXXXXXXX, XXX XXXXXXXXX of XXXX practice in the host country depends XX the way XXXXXXXX markets XXXX, XX XXXX as XXX XXXXXXXXXX XXXXXXXXXX of XXXXXXXX firms. XXXXX XXX XXXXXX incentive XXXXXXXXXX XXX XXXXXXXX distorted, FDI XXXXXXX will tend XX be XXXX exploitive and XXXX-XXXXXXX in nature, XXXXXXXX limited XXXXXXXX to XXX XXXX country. XXXXXXXXX, XXXX the domestic knowledge base is thin and XXXXXXXXXXX XX asymmetric, few XXXXXXXXX XXXXXXXX XXXX XX established for XXXXXXXXXXXX XXXX XXXXXXXX. </p> <p>X. A XXXXXXXXX for XXXXXX Advancement </p> <p>24. XX the XXXX XXXX XXXX XXX XXXXXX as a XXXXXXXX XXX rapid economic XXXXXX XX enabling XXXXXXXXXX countries to leapfrog XXXXXXXXXXXXX stages and to XXXXX XX XXXX advanced XXXXXXXXX, it XXXXXXXXXXX XXXX an XXXXXXXXX advocate for improved social norms. In this XXXXXXX, FDI plays a XXXXX XXXX in the XXXXXX development agenda XX XXX host XXXXXXXXX. XXXX, XXX XX XXX XXXX XXXXXX aspects XX development – XXXXXXXXXX XXX XXXXXXXXXXX - are XXXXXXXXX in XXXXXX. </p> <p>XXXX examples in XXXX, S. (1980), “XXXXXXXX interfirm XXXXXXXX in XXXX: an XXXXXXXXX XXXXX,”Oxford Bulletin XX Economics and XXXXXXXXXX, Vol 42, No. X. on India; UNCTAD (XXXX),World XXXXXXXXXX XXXXXXXX Argentina, Brazil and XXXXXXXX; Batra X. XXX H. Tan (XXXX),XXXXXXXXX XXXXXXXX and XXXXXXXXXXXX growth: evidence form Malaysian XXXXXXXXXXXXX, The World XXXX; and XXXXXX, J. XXX X. Kaplinsky (2000), “Globalization XXX the XXXXX of local firms? Automobile component XXXXXXX in XXXXX Africa. </p> <p>9 </p> <p>X. XXXXXXXXXX XXX Labor Standard </p> <p>XX. Increasing gainful and XXXXXX employment XXX always ranked XXXX as a XXXXXX objective for developing countries. XX is a principal means XX XXXXXXX an equitable distribution XX income XXX higher XXXXXXXX XX welfare for the XXXXXXXX of XXX population. XXXXXXX of the special features of foreign investments – they XXXX XX XX XXXXXX in size, with greater XXXXXXXXXXXXX XXXXXXXXXXXXXX, facing XXXX XXXXXXXXXXX pressures in XXXXX product markets, and having XXXX room of XXXXXXXX in XXXXX operations as compared to XXXXXXXX XXXXXXXXXXX – XXX XXXXX plays a XXXXXX role in XXXXXXXXXX creation XXX upgrading XX the XXXX countries. </p> <p>XX. There XXX three basic mechanisms for FDI to generate employment in XXX XXXXXXXXX XXXXXXXXX. XXXXX, foreign XXXXXXXXXX employ people in their domestic XXXXXXXXXX. Second, through backward and XXXXXXX XXXXXXXX, XXXXXXXXXX XX XXXXXXX in enterprises XXXX XXX XXXXXXXXX, subcontractors, or XXXXXXX XXXXXXXXX XX them. Third, as XXX-related industries expand XXX the XXXXX XXXXXXX XXXXX, XXXXXXXXXX XX XXXX created in sectors XXX activities XXXX XXX not XXXX XXXXXXXXXX XXXXXX XX XXX original FDI. </p> <p>XX. XXXXXXXXXXXXX data are absent XXXX XXXXXXX to the XXXXXXXXXX XXXXXXXXX XX FDI in XXXXXXXXXX countries. Estimates XXX XXX XXXXXX XXXXXXXXXX created by foreign affiliates at XXXX than two percent XX XXX labor force in most developing XXXXXXXXX, although the share would XX XXXXXX XXXX XXXX formal employment XX XXXXXXXXXX and it is often XXXXXXXXXXX in XXX modern XXXXXXXXXXXXX XXXXXX.XXXX Thailand, for example, XXX XXXXXXXX XXX XXXXX 17 XXXXXXX of the total XXXXXXXXXXXXX employment in XXX late 1980s, XX well XX a XXXXXXX XXXXX of new XXXXXXXXXX XXXXXXXXXX in the poorer provinces far away XXXX Bangkok.XXXXXXXXXX XXXXXXXXXX created by XXXXXXX XXXXXXXXXX, XX contrast, can XX XXXXX XXXXX the interaction between XXX XXX XXX XXXXX economy is XXXXXXX. Based XX a series of XXXXX case studies in both XXXXXXXXX and developing XXXXXXXXX, XXX study estimated that when XXXX XXX indirect employment XXXXXXXXX XX backward and XXXXXXX linkages XXX XXXXXXXXXX, 1.X jobs XXXX created indirectly XXX XXXX XXX created directly by a XXXXXXX affiliate.XX </p> <p>XX. XXXXX thequantityof employment XXXXXXXX XXXXX XXXX in XXX policy XXXXXX XX XXXXXXXXXX XXXXXXXXX, XXXXXXXXXXXX XXX XXXX created through XXX preoccupies the XXXXXX makers with equal XXXXXX. Despite XXX popular XXXXXX that foreign investors are attracted to XXXXXXXXXX XXXXXXXXX XXXXXXXXXXX, or even XXXXXX, by the low XXXXX XXXXX, XXXXXXXXX XXXXX to the opposite. In XXXX, XXXXX XX XXXXXXX agreement that XXXXXXXXXXXXX XXXXXXXXX provide XXXXXXXXXX XX conditions XXXX, XX the whole, compare favorably with XXX XXXXXXXXXX </p> <p>10UNCTAD,XXXXX XXXXXXXXXX XXXXXX, XXXX. 11Brimble, P. XXX X. Sherman (1998). “the XXXXXXX XXXXXXX of foreign XXXXXX investment XX economic development in Thailand: corporate responses.” XXXXX prepared XXX High XXXXX XXXXXXXXXX XX XXX and XXX XXXXXX XX Poverty Alleviation, XXXXXXXX XXXX. 12Dupuy, X and X. XXXXXX (XXXX). “XXX effets XXXXXXXXX XXX XXXXXXXXXXX XXXXXXXXXXXXXXX XXX l’XXXXXX des XXXX d’accueil. » XXX XXXXXXX XXXXX No. XX. </p> <p>10 </p> <p>practices in host XXXXXXXXX. XX particular, well-established XXXXX multinational XXXXXXXXXXX XXX XXXX likely XX XXXXXX XXXX XXXXXXXXXXXXX labor standards XXX employ good labor practices. XXXXXX, because of their size, technological XXXXXXXXXXXXXX, the need to meet high XXXXXXX XXXXXXXXX, and XXXXXXXX XX international XXXXXXXX, foreign affiliates have XXXX XX XX XXXXXXXX XX XXXXX higher XXXXXXXXXXXX, XXXXXXXX XXXXXXX XXXXXXXXXX, and more skill XXXXXXXXX XXXXXXXXXXXXX to XXXXX XXXXXXX than XXXXXXXX XXXXX. </p> <p>29. In parallel to technological XXXXXXXXXX, XXXX employment practices XXX be transferred XX XXXX XXXXXXXXX XXXX the foreign affiliates are well XXXXXXXXXX XXXX XXX local economy. In XXXX respect, the XXXXX-border diffusion XX XXXXXX organizational XXX managerial XXXXXXXXXX XXX XXX most impact XX the XXXXXXX XXXXXXXXXX and human XXXXXXXX development styles XX XXX receiving countries. By XXXXXXXX a XXXX efficient and more XXXXXXXXXX XXXX pattern, XXX XXXXX XX XXX new XXXXXXXXXX XXXXX and higher XXXXX standards in the XXXXXXXX industries XXX localities. XX XXXXX, for XXXXXXX, it was through foreign XXXXXXXXXXX XXXX a new XXXX of labor-contract system XXX first introduced in XXX early XXXXX, which XXXXXX remuneration and bonuses XX labor XXXXXXXXXXXX. XXX new reward system was so successful that it eventually led to XXX country-wide XXXX and XXXXX market reforms. </p> <p>XX. Finally, XX XXXX of XXX XXXXX-border transfer of XXX XXXXX resource XXXXXXXXXX XXXXXXXXX, XXX also brings XXXX it XXX kind of modern XXXXXXXXXX XXXXXXXXX XXXX are prevalent in advanced XXXXXXXXX.13In general, XXXXXXX XXXXXXXXX adapt their XXXXXXXXXX relations XXXXXXX XX XXX XXXXXXXXXXXX XXX XXXXXXXXX XX their host XXXXXXXXX. In doing so, their XXXXXXXX to management-labor relations XX influenced XX XXX attitudes of XXX host XXXXXXX XXXXXXXXXXX. XXX XXXXXX XXXXXXXXX XX XXX, however, suggests XXXX large foreign XXXXXXXXX may XXXXXX practices XXXX differ in some respects XXXX XXXXX XX XXXXXXXXXX XXXXXXXXXXX in a host country. XXXXXXXXXXXXXXX, XXXXX is a broad trend XXXXXXX XXXXXXXXX communication XXXXXXX XXXXXXXXXX and workers. As XXXXXXXXXXXXX XXXXXXXXXXXX XXX typically firms XXXX XXXXXX in XXXXX XXXXXXXXX and deal XXXX workers’ organizations with a view towards XXXXXXXXXXXX an effective XXXXXXXXXXXX, XXXXXXXXXX XXXXXXXXX XXXXXXXXXXXX XX not arise XXXX XXXXXXXXXX in XXXXXXX XXXXXXXXXX XXXX in XXXXXXXX XXXXX. Conversely, to the extent that their XXXXX XXXXXXXXX XXX XXXX consultative in XXXXXX XXXXX XX their XXXXXXXXXXXXX experiences, XXXXX XXXXXXX XX industrial XXXXXXXXX often becomes a model XXX domestic firms XXX XXXX part XX XXX labor force that is not organized. </p> <p>X. XXXXXXXXXXXXX XXXXXXXXX </p> <p>XX. XXX environmental degradation in developing countries is XXX combined XXXXXXXXXXX of the XXXXXXXXXX XXX consumption patterns XXXX XXXXXX the countries XXX in XXXXX XXXXXX XXXXXXX. XX a XXXXXXXXXX XXXXX economy, XXX impact of XXXXX XXXXXX are XXXXXXXXX, with FDI serving as another XXXXXXX. Nonetheless, XXXXX it XX undeniable that there have XXXX cases where XXXXXXXX XXXXXXXXX relocate polluting production XX XXXXXXXXX or XXXXXXX out of considerations XX weak environmental XXXXXXXXX, XXXXX XX no conclusive XXXXXXXX XXXX this is the rule. Overall, XXX flows XX XXXXXX where XXX net </p> <p>XXXXXX is most XXXXXXXX for XXXXXXXXX XXXX XXXX XXXXXXXX countries. </p> <p>11 </p> <p>XXXXXXXXXXXXX is XXXXXXX, not where XXXXX are XXXXXX. XXXX is XXX not XXXX XXXX of XXX XXXXX’s FDI XXXXX to developed XXXXXXXXX, XXXXX factor costs XXX higher XXX XXXXXX XXXXXXXXX XXXX XXXXXXXXX, available data XXXX XXX XXXXXX States show XXXX the XXXXX XX XXXXXXXXX-intensive production is the highest in XXXXXXXXX XXXXXXXXX XX XXXX.XXXXXXXXXXX, there XX no XXXXXX evidence to support XXX argument that XXX XX XXXXXXX XXXXXXXX on developing countries XX XXXXX XXXXX XXXXXXXXXXXXX standards so XX not XX XXXX investment XXX jobs. </p> <p>32. There have been several studies XXXX attempt XX test the “XXXXXXXXX haven” XXXXXXXXXX. XXXX the correlation approach, which examines the relationship XXXXXXX XXXXXXX XXX and environmental standards of host countries, and XXX XXXXXXXX choice approach, XXXXX XXXXXX environmental XXXXXXXXXX as a XXXXXXXXXXXX XXX FDI flows, XXXX to XXXXXXX XXXX hypothesis.15 XXXX in selected XXXX studies XXXX XXXXXXXX XXXXX to XXXXXXX XXX notion XXXX environmental standards XXXX a factor in FDI location decisions. However, it should XX pointed out that XXXXX XXXX XXXXXXX XXXXXX from selection XXXX XXXXXXX XXXX firms that XXXX actually shifted location were documented.XX </p> <p>XX. Essentially, XXXXXXXXXXXXX XXXXXXXXX XXX an XXXXX into XXX production process. XXX impact XX industrial XXXXXXXXXX on the environment is XXXX XXXXXXX linked to the XXXXXXXXXX efficiency XX firms XXX their XXXXXXXX to XXXXXX environmental risks. Environmental damage XXXXX to XX greatest in low XXXXXXXXXXXX XXXXXXXXXX XXXX employ obsolete XXXXXXXXXX, outdated XXXX methods, XXXX XXXXX XXXXXXXX XXXXXXXXXX techniques, and XXXXXXXXXXX XXXXXX use. XX this context, XX XXXXXXX of XXX XXXXXXXX technological and XXXXXXXXXX XXXX, FDI is actually XXXXXX positioned to XXXXXX higher environmental standards XXXX their domestic counterparts. There is XXXXXX XXXX evidence to show that the majority of XXXXXXX XXXXXXXXX rarely XXXXXX worse than is the XXXXXXX XXXXXXXX in the recipient county. Rather, they XXXX to XXXXXXX XXXXXX XXXXXXXXXXXXX practices XXX contribute to an XXXXXXXXXXX of local XXXXXXXXXXX.17 </p> <p>XX. Therefore, instead of XXXXX feared as a XXXXX XXX the “race to the bottom” in XXXXXXXXXX countries’ effort XX generate XXXXXX, XXX should XX XXXXXX XX a XXXXX XX bring about better environmental standards. XXXXXXX of XXXXX XXXXXXXXXXX to the developed XXXXX, where affluent XXX environmentally XXXXXXXXX markets call XXX stringent XXXXXXXXXXXXX regulations XXX environment-XXXXXXXX products, FDI XXX XXXXXX a conduit for transferring clean XXXXXXXXXX XXX XXXXX environmental XXXXXXXXXX XXXXXXX. </p> <p>14UNCTAD,World Investment Report, 1999. 15See XXXXX X. (1997), “Environmental policy and XXXXXXXXXXXXXXX in a XXXXXXXXXX XXXXXXX: conceptual issues and a review of the XXXXXXXXX evidence”, in OECD Globalization and Environment: Preliminary XXXXXXXXXXXX; and XXXXXXXX X. XXX X. XXXXXXXX (1997), “XXXXXX to XXXXXXX XXXXXXXX? XXXXXXXXXXXXX and the XXXXXXXXX haven hypothesis” The World XXXX, XXXXX. XXXXXXXX op. cit. XXXXX XXXXXXX, X. (XXXX),Multinational XXXXXXXXXXXX, XXX environment XXX XXX third XXXXX, North XXXXXXXX: XXXX XXXXXXXXXX Press; Leonard, D. (1998),Pollution and the struggle XXX XXX XXXXX XXXXXXX, XXXXXXXXX: Cambridge XXXXXXXXXX Press; Gentry, B. (ed.), (1998),Private XXXXXXX XXXXX XXX XXX XXXXXXXXXXX: lessons from XXXXX XXXXXXX,Cheltenham: Edward Elgar Publishing; and Wheeler , D. (XXXX), “XXXXXX to XXX XXXXXX? XXXXXXX XXXXXXXXXX XXX XXX pollution in XXXXXXXXXX XXXXXXXXX,” mimeo, XXX XXXXX Bank. </p> <p>12 </p> <p>C. XXXXXXXXX Negative XXXXXXX of FDI </p> <p>XX. As XXXXXXXX in XXXXXX in XXX discussions above, XXX XXX a XXX XXXX XX play in XXXX countries’ economic development. This XXXX XXX mean, however, that XXX XXX never XXXX XX undesirable outcomes XXXXX all circumstances. XXXXXX, even XXXX the XXXX XX XXXXXXXXXX, XXX may sometimes produce XXXXXXXXXXXXX results XXXX XXX harmful XX host developing XXXXXXXXX. It XX XXXX XXXXXXXXXX XXXX, rare XXXXXX XXXX are, some XXXXXXX XXXXXXXXXXX XXX XX XXXXXXXXXX in XXXXXX and XXXX XX XX properly regulated. Some XX the negative impacts XX FDI are reviewed in the following XXXXXXX. As will be seen, in XXXX cases, these negative XXXXXXX XXX a reaction XX XXX XXXXXXXXXXX XXX XXXXXXXXXXXXXX in the domestic markets. Therefore, XXXX XXX essentially XXXXXXXXX XXXX appropriate policy tools and a sound regulatory XXXXXXXXX. </p> <p>X. The “Crowding Out” XXXXXX XX XXX </p> <p>XX. XXXXXXXXXXXXXXX XXX empirical XXXXXXXX XXXX XXX XXXXXXX results in proportionally more investment than what XXX be XXXXXXX for by FDI XXXXX, there is the XXXXXXXXX concern that foreign XXXXXXXXXXX may take away the XXXXXXXXXX opportunities XX XXXXXXXX firms, thereby driving them out XX XXXXXXXX. Such a XXXXXXXXX may XXXXX in either XXXXXXXXX XXXXXXX or XXXXXXX XXXXXXX. If the foreign investor finances XXX project by XXXXXXXXX XXXX XXX XXXX country XXXXXXXXX XXXXXX XXXXX conditions XX scarce resources, domestic XXXXXXXX rates may rise as a result, which may make XXXXXXXXX unaffordable XXX XXXX XXXXXXXX XXXXX. Precisely XX XXXXXXX XXXX from happening, Chile, a country XXXX generally liberal XXXXXXXX XXXXXXX XXX, has retained XXX XXXXX to limit XXX access of XXXXXXX XXXXXXXXX XX XXXXXXXX XXXXXXX system. Even though the XXXXXXXXX has never XXXX invoked, XXX XXXX XXXXXXXXX XXXXXXXXX to XXX unease among XXXXX XXXXXXXXXX XXXXXXXXX XXXX such potential problems.18 </p> <p>XX. XX FDI XXXXXX the XXXXXXX in XXXXXXXXXX in XXXXX XXXXXXXXX XXXXXXXX XXXXX XXXXXXX XXXXX, XXX XXX XXXX XXXXXX XXXXXXXX XXXXXXXXXXX that XXXXX XXXX been XXXXXXXXXX by domestic producers. XXXX in XXX activities beyond XXX XXXXXXX XXXXX XX domestic investors, XXX XXX XXXXXXX investments XX XXXXXXXX XXXXX XXXXX, with proper XXXXXXXXX, XXXXX XXXXX XXX XXXXXX XXXXXXXXXXXX. XXX XXXXXXX XXXXXXX XXX XXX XXXX XXXXX if the foreign XXXXXXXXXX XXXXXXXXXXXX XXXX predatory practices XX force competitors out XX XXXXXXXX, or XX XXXXXX XXXXX establishment. Especially in places XXXXX the host XXXXXXXXXXX lack XXXXXXXXX competition XXXXXX tools XXX skills XX keep such XXXXXXXX in XXXXX, a XXXXXX XXX XXXXXXXX may XXXXXXX the development of XXXXX capacities. XX most cases, crowding out XX XXX XXXX not necessarily XXXX an absolute reduction in total investment, XXX rather that the XXXXXXXX is not XXXXXXXXXXXXX XX XXX inflows. </p> <p>XX. XXXX world XXXXXXXX suggests XXXX while crowding in or neutral effects of XXX prevails, XXXXXXXX out is XXX XXXXXXXX XXXXXX. Much depends XX the XXXXXXXX market </p> <p>18UNCTAD XX. cit. </p> <p>13 </p> <p>XXXXXXXXX. In an XXXXXXXXXXX exercise XXXXXXX out XX investigate XXXX XXXXX, it was XXXXX that XXXXXXX XXXXXXX dominated in XXXX XX the countries, XXXXX XXXXXXXX in and crowding out XXXXXXXX XXXX XXXXX XXXXXXXXX, taking place in 25 percent of XXX countries each.19A general conclusion XX that XXXXXXX the XXXXXXXXX of crowding out XXXXXX be XXXXX out, it does XXX appear XX be XXX general case. Equally XXXXXXXXXXXX XXX XXX policy XXXXXXX XX mend the XXXXXXX. XX Korea, for XXXXXXX, XXX XXXXXX XX XXXXXXXX foreign investments in certain industries XXXXXX XXX to the XXXXXXXXX of successful XXXXXXXX producers. In Brazil, XXXXXXX, the same XXXXXX XXXXXXXXXXXX in the XXXXX XXXXXX to XX not XXXX XXXXXX but with XXXXXXXXX XXXXXXX. XXX XXXXXXX is XXXX XXXX instead XX XXXXXX XX XXXXX the XXXXXXX XXXXXXX “restriction”, i.e. prohibiting FDI XXXX entering XXXXXXX sectors, efforts should XXXXXXXXXXX on enforcing XXXXXXXXXXX competition policies and XXX related XXXXXXXXXXX so as XX prevent XXXXXXX XXXXXXXXX in XXX XXXXXXXX XXXXXXX. </p> <p>2. The Balance of Payment Problem XX a Result XX XXX </p> <p>39. XXXXXXX wide-XXXXXX concern regarding FDI is that XX XXX XXXXXX XXXX profits XXX repatriated, they XXXXXXXXXX a XXXXXXXXX XXXXXXX XXXX XXX XX XX set against XXX XXX XXXXXX XXXXXXXXXXXX XX XXX XXXXXXX XX a XXXX country’s XXXXXXX of payment. This XXXXX XXX of considerable XXXXXXXX in XXX XXXXX 1970s, when a XXXXXXXX XX XXXXXXXXXX countries XXXXX XXXXXXXXX foreign XXXXXXXX XXXXXXXXXXX. With XXXXXXXXX XXXXXXX XXX capital XXXXXXXX liberalizaton in many developing countries, XXXX is less of a XXXXXXX. However, XX there are still a XXXXXX of XXXXXXXXX XXXX various degrees of XXXXXXX XXXXXXXX XXXXXXXX, XXX XXXXXXX XX XXXXXXX XXXXX remains XXXXXXXX. </p> <p>40. Nevertheless, XXX gravity XX XXX problem appears to XX restrained. Comparisons XX repatriated earnings and FDI inflows during the 1990s show XXXX even in Africa, where the repatriation ratio was the highest (an annual XXXXXXX of XX XXXXXXX), there XXX never a negative external balance as a result of XXX. Moreover, several indirect effects XXXX to be taken into consideration XXXX assessing the balance XX payment impacts of FDI. XX is XXXXX the XXXX, FDI in trade XXXXXXXXXX generates foreign XXXXXXXXX through XXXXXXX, XXXXX XXXXXXX the financial outflows XX repatriated XXXXXXX. Even with projects in XXX-XXXXXXXX activities, XXX can XXXXXXX the XXXXXXXXXXXXXXX XX tradable activities, thus XXXXXXXXXXXX to the XXXXXXX XXXXXX performance XX the host XXXXXXX. Therefore, in the XXXX XXX, XXX XXXXXX XXX XX a cause for XXX XXXXXXX XX XXXXXXX problem, except in countries with seriously XXXXXXXXXX XXXXXXX XXXXXXXX regimes. XX this case, XXX XXXX solution XX not restricting XXX, XXX rather addressing XXX XXXXXXX XXXXXXXX constraints of the economies. </p> <p>X. XXXXXXX XXXXXXXXX Created XX XXX </p> <p>XX. XXX XXXX voiced concern XXXX XXXXXX to FDI XX undoubtedly XXXX such XXXXXXXXXXX are XXXXXXXX XXXXX, XXXX XXXXXXX XXXXXXX impact on the XXXXXXXXX XXXXXXXXX, XXX benefiting XXXX a small XXXXX XX the XXXXXXXXXX. Such anxieties are XXXX exemplified by XXX mining and other XXX XXXXXXXX extraction XXXXXXXX, which XXX typically XXXX capital intensive XXX </p> <p>XXXX cit. </p> <p>14 </p> <p>employ a small fraction XX the XXXXXXXX workforce. XXXX means that XXX linkages, either backward or forward, XXXXX with the host XXXXXXXXX, XXXXXX their indirect effects on XXX domestic economy XXXXXXXXXX. To make things worse, XXXXXX XXXXX inflows XX XXXXXXX exchange XXXX to raise XXX XXXX XXXXXXXX rate of the host XXXXXXX XXX thus XXXXXX XXXX XXX-XXXXXXXXXX activities unprofitable (XXX XXXXX XXXXXXX). XXXXXXXX, XXXX projects often display low revenue retention for XXXX XXXXXXXXX XXXXXXX a XXXXX XXXXXXXX XX export earnings XXXX immediately XXXXXXXX XX XXXXXXX XXX foreign XXXXXXX XXXXXXXXXX.20 </p> <p>XX. Another example of XXX enclave XXXXXXXXX XX XXX XXXXXX Processing Zones (XXXX), XXXXX XXXX XXXXXX a XXXXXXX XXXXXXXX in XXXXXXXXXX countries to foster XXXXXXX XXX to XXXXXXX XXXXXXXXXX. XXXX XXX XXXX range of exemptions XXX XXXXXXX privileges granted to investments XXXXXXX in XXX XXXX, XXXX too exhibit XXXX limited linkage with the local economies at large. XX particular, XXX labor costs XXX avoidance of XXXXXX rules XXX regulations XXX XXXXX the main advantages sought by XXX FDI in XXXX locations, XXX also XXXX to XX XXXXXXXXX XXX have little XXXXXXXXX XX XXXXXXXX XXXXXX or technologies. Consequently, even XXXXXX XXX immediate export and employment XXXXXXXX are XXXXXXXXXX, XXX XXXX-XXXX XXXXXXXXXXXXXX and economic XXXXXXX XX these zones are less XXXXXXX. </p> <p>43. XXXXXXX, XXXXXXX the XXXXXXX XXXXXXXX XX mining projects and EPZs XXXXXXX XXXXXXX XXXXXXXXX, XXXX does not XXXX to XX the case and it XX not XXXXXX enough for developing XXXXXXX XXXXXXXXXXX XX shun XXXX XXX foreign investments into XXXXX activities. What they XXXX XX XX XX XX XXXXXX the right XXXXXXXXXX XXX XXXXXX environment XXX such investors XX XXXXXXX the XXXXX of XXXXX activities. In the mining and natural resource projects, XXX example, XXXXX have XXXX successful examples of XXXXXXXXX XXXXX XXXXXXX XX use XXXXXXX XXXXXXXXXXXXX XXXXXXXX XX XXXXX against XXXXXXXXX XXXXXXXX rate appreciation and sound regulations XX XXXXXXXX XXX XXXXXXXXXXXXX of XXXXXXXX XXX corruption and to use the XXXXXXXX gains XXX poverty XXXXXXXXXXX.XXXX many XXXXXXXXXX countries, some of the XXXX XXX XXXXXXX XXXX “XXXXX” XXXXX with a number XX strategies to XXXXXX broader technology and XXXXXX XXXXXXXX XXXX XXXXXX and XXXXXXX XXX XXXXX. </p> <p>XXX. XXX XXXXXXXXXXXX XX XXX Location </p> <p>44. With XXX XXXXXX XXXXXXXXXX XX FDI in world XXXXXXX, numerous XXXXXXXX have been XXXX XX isolate XXX XXXXXXX that explain XXX XXXX and location. As XXXXXXXX XX Agarwal (XXXX), “The growth XX foreign XXXXXX XXXXXXXXXX has XXXX XXXXXXXX XX XXX growth XX XXXXXXXXXXXX specially XX XXX determinants of XXXXX XXXXXXXXXXX.”22From every XXXXX and for both developed XXX developing countries, XXXXXXXXXXX XXXX examined </p> <p>20See Auty, X. X. (1993),Sustaining development in XXXXXXX XXXXXXXXX: XXX XXXXXXXX curse XXXXXX, London: XXXXXXXXX; XXX Sachs, X. XXX A. M. XXXXXX (XXXX). “Natural XXXXXXXX abundance XXX XXXXXXXX XXXXXX.” NBER Working Paper XXXX. 21Such XXXXXXXX include Botswana, Chile, XXXXXXXXX, Malaysia, Mauritius, XXXXXX XXX XXXX. XXXXXXXXX, X.P. (1980). “Determinants of foreign direct XXXXXXXXXX: a survey,”XXXXXXXXXXXXXXXXXXXX XXXXXXX, Vol. XXX. </p> <p>XX </p> <p>XXXXXXXXX, economic, XXXXXX, XXX policy variables in their search for “XXX most XXXXXXXXX” determinants of XXX flows. The discussion below synthesizes the results of XXXX vast literature and summarizes XXX basic elements XX XXXXXXXXXXXXXX XXXX XXXX XXXXXXX investors XX a country. </p> <p>45.XXXXXX demand. XXX flows XX FDI is XXXXXXXXXX influenced by XXX XXXX of a country’s XXXXXX XXXXXX as XXXXXXXX by GDP XXX XXXXXX. XXXX confirms XXX XXXXXX observation that most XXX XXXXX to affluent XXXX countries and it is XXXXXXXXXXXX true XXXX market-XXXXXXX XXXX of XXX. Even in XXXXXXXXXX XXXXXXXXX, where FDI inflows XXXX XX be XXXX XXXXX-XXXXXXX, a XXXXXXX’s XXXXXXX development level still has a strong XXXXXXX on how much FDI it XXXXXXXX. </p> <p>XX.Growth rate. FDI XXXXX to XXXXX fast economic XXXXXX has XXXX recorded. A XXXXXXXX circle is observed XXXX: XX same time XXXX XXX contributes significantly to XXXXXXXX growth, XXXXXX XXXXXXXX growth attracts more FDI XXXXXXX it XXXXXXXXX foreign investors’ XXXXXXXXXX in the economy, which in XXXX pushes the growth XXXX even higher. In the least developed XXXXXXXXX, studies XXXX shown that FDI in XXXX XXXXXXX, not XXXXXXXX, XXXX initial growth or XX XXXXX XXX promise XX growth. </p> <p>47.Political stability. Quite understandably, incidences of XXXXXXXXX coups, assassinations, riots, or armed conflicts XXX exert a XXXXXXXX negative influence XX foreign XXXXXXXXX’ XXXXXXXXXX decisions. XXXXXX, frequent XXXXXXX XX XXXXXXXXXXX and the resultant policy XXXXXXX XXX XXXXXX an XXXXXXXX’s assets XX zero overnight. XX XXX XXXXXXX of significant XXXXXXXX of nonrenewable XXXXXXX XXXXXXXXX (e.g. XXX), rarely would any foreign XXXXXXXXX XXXXXX XXXXXXX XXXXXXXXX risks or frequent XXXXXX XXXXXXXXX. </p> <p>48.XXXXXXXXXXXXX XXXXXXXXX. A XXXXXXX’s overall macroeconomic XXXXXXXXXXX, XXXX as low XXXXXXXXX XXXX and XXXXXXXX fiscal account, XX a XXXXXXXXXXXX significant XXXXXX in XXXXXXX the decision XXXXXX of foreign XXXXXXXXX XXXX assessing XXXXXXXXXX XXXXXXXXX. Because XXXXXXXXXXXXX XXXXXXXXXXX XXXXX it difficult XXX XXXXXXXXX XX evaluate the XXXX costs and returns of XXXXX XXXXXXXXXXX, only in rare XXXXX XXXXX FDI flows XX places where there is XXXXXXXXXXXXXX or severe XXXXXXXXXX in their internal XXX external positions. </p> <p>49.XXXXXXXXXXXXXX. With regards XX XXX, infrastructure encompasses XXXX XXXXXXXX (e.g. XXXXX and power) XXX XXXXXX (e.g. health XXX education) concepts. XX has XXXX repeatedly XXXXX around XXX XXXXX XXXX a well-developed infrastructure network XXX a well-XXXXXXX XXXXX XXXXX XXX XXXXX elements of XXXXXXXXXXXXXX to foreign XXXXXXXXX. XXXX XX especially XXXX XXXXX XXXX XXXXXXX XXX (e.g. long-XXXX XXXXXXXX XX advanced XXXXXXXXXX) is concerned. </p> <p>50.Regulatory XXXXXXXXXXX. XX is increasingly XXXXXXXXXX XXXX XXX XXXXXXXXXXXXXX and XXXXXXXXXX environment of a country XXX XXXX a significant influence on the level of XXX XXXXX. XXXXX large XXX powerful XXXXXXXXX may XX able to endure cumbersome XXX XXXXXX procedures, they XXX XXXXX fatal to the XXXXX XXX growth XX small XXX XXXXXX enterprises. XXXXXXXX, arbitrary, XXXXXXXXXXXXXX, XXX non-transparent regulations often XXXX to corruption, XXXXX XXX been shown to be a XXXXX deterrent to FDI. </p> <p>XX </p> <p>51.Investment XXXXXXXXX. XXXX a XXXXXXX XXX XXXXXXXXXXX a XXXXXXXXXX XXXXXXXXX XXXXXXXXXX climate, how XXXX FDI it XXXX XXXXXXX XXXX XX XXX XXXXXXXXX XXXXXXX XX attract foreign investment. XXXXXXX, no amount of promotion can XXXXXXXXXX for a XXXXX XXXXXXXXXX-friendly XXXXXXXXXXX, XXX when other factors XXX XXXXXXX – XX it XXXX in XXXXXXXXX XXXXXX attained a XXXXXXX level XX XXXXXXXXXXX – XXXXXXXXX efforts XX XXXX a difference. </p> <p>52. XX this XXXXXXX, mention should XX XXXX XX the XXXXXX XXXXXXXXX XXXXXXX XXXX XXXX governments XXXXX feel XXXXXXX to XXXXX in order XX attract XXX. There have XXXXXX be XXXXXXXX of XXXX “XXX heavens” XXXXX XXX highly XXXXXXXXXX XXXX mobile multinational XXXXXXXXX. Most economic studies and surveys of XXXXXXXXXXXXX XXXXXXXXX, XXXXXXX, have XXXXXXXXXX shown that XXXXX XXXXXXXXXX are not nearly XX influential in the location XXXXXXXXX of XXXXXXX investors XX it XX XXXXXXX XXXXXXXX. That XX, XXXX XXXXXX XXX investors would XXXX XXX lowest tax liabilities when it is possible – just XXXX they would XXXXXX low XXXXXX XXXXX XXXX XXX other conditions are equal - the various XXXXXXX XXXXXXXXX XXXXX XXX XXX more important in XXXXX XXXX XXXXXXXXXX XXXX XXXXXXX fiscal incentives. Whether XXXXXXXXXX XXXXXXXXXX are needed for a XXXXXXX XX XXXXXXX XXX and what types of XXXXXXXXXX XX XXX depend XXXXXXX XX XXX XXXXXX of XXX prospective investors’ activities, XXXXX XXXXXXXXXX XXX XXXXXXXXX abroad, XXXX XXXX XXX XXXXXXX XXXXXXX XX competing for XXXXX XXXXXXXXX, XXX if XXX XXXXXXX XXX XXX XXXXXX capacity to swallow the revenue XXXXXX and the administrative XXXXXXXX XX manage XXX XXXXXX XXXXXXXXX XXXXXXX. Overall, XXXXXX companies XXXX more importance XX XXX simplicity XXX stability XX a country’s tax XXXXXX than XXXXXXXX XXX rebates. </p> <p>IV. XXXX Do the States XXXX To Do? </p> <p>XX. The XXXXXXXX discussions XXXXXXXXX the role XX XXX in XXXXXXXX development – XXXXX not a panacea, it XX a XXXXXXXX ingredient to XXX XXXX XXXX sustainable growth. For developing XXXXXXXXX, it presents XXX most effective way XX enhance productivity and to develop an internationally competitive XXXXXXX XXXXXX; it XXXXXXX employment XXX XXXXXX opportunities; XXX it provides an XXXXXXXXX vehicle XX XXXXX environmental and social standards. XXXX developing XXXXXXXXX XXXX XXXXXX XXXXX XXXXXXXX. XXX neither FDI XXX all its benefits XXXX automatically. XXXXXXX XXXXXXXXX are XXXXXXXX people whose first and foremost XXXXXXXXX for investing anywhere is to maximize XXXXX XXXXXX profits, with or XXXXXXX benefits to host countries. XXXXXXXXXXX XXXX XXXXXX business principle, it XX XXXXXXXX to XXXXX out XXX good sides of XXX and XXXXX XXX negative aspects. </p> <p>54. Moreover, XXXXXXX XXX tremendous potential of FDI in economic XXXXXXXXXXX, it XXXX not XXXXXXX answers XX all XXXXXXXXXXXXX XXXXXXXX. For XXXXXXX, XXXXX XXX helps XXXXXXX XXXXXX XXXXXX, it XXXXXX automatically XXXXXX existing inequalities XXX can even XXXXXXXXXX XXXX in XXX short XXX XX putting a premium on people XXXX higher skills. Public XXXXXXXX need to XX in XXXXX XX XXXXXXX the XXXXXX XXXXXXXX XX XXXXXXX. The role of XXX in this XXXXXXX is, by XXXXXX of its impact XX XXXXXXXXXXXX and XXXXXX, to generate XXX </p> <p>XX </p> <p>resources XXXXXX to fund XXX XXXXXXXXXX-led XXXXXXXX XXXX XXXXXXX social safety XXXX and provide basic XXXXXX services. Moreover, the XXXXXXXX of social XXXXXXXX XX the XXXX – from XXXXXXXXX XXXXXXX to XXXXXX XX XXXXX XXXXXXXX XXXX XX water and energy – can also benefit XXXX XXXXXXXX on XXXXXXX investors. It XX thus imperative XXX the XXXXXXXX XXXXXXXXXXX XX XXXXXX XXX XXX-conditions for XXX to flow in XXX work XXX wonders. </p> <p>XX. The XXXX XXXXXXXXXXX XXX- XXXXXXXXXX XXX XXX are XXXXXXXXXX in the previous section. XXX XXXXXXXXXXX need XXXX to provide (i) XXXXX political XXX macroeconomic XXXXXXXXX XXXX XXXXXX XXXXXXXXXX predictability so XXXX investors XXX make XXXXXX business XXXXXXXXX; (ii) a XXXXX-XXXXX legal XXX XXXXXXXXXX environment XXXX facilitates XXXXX XXXXXXXX rather than harassing it; (XXX) an XXXXXXXX XXXXXXXX and XXXXXX XXXXXXXXXXXXXX that XXXXXX the XXXXXX XXXXXXXXXXX of the market and transferring XX knowledge; XXX (iv) XXXXXXXXXXX XXXXXXXXXX promotion efforts XXXX disseminate information about the XXXXXXXXXX site and XXXXXXX existing and potential XXXXXXXXX. </p> <p>56. Beyond XXXXX XXXXX XXXXXXXXXX, XXX XXXXXXXXXXX XXXX XXXX need XX XXXXXXX several XXXXXXXX issues in order to XXXXXX the realization XX XXX XXXXXXXX of FDI. XXXX XXXXXXX:XX </p> <p>XX.XX XXXX XXX XXXXXXXXXXX XXXXXXX field.The XXXXXXXX XX FDI tend XX XX XXXXXXXXX when XXXXXXX XXXXXXXXX XXXXXXX on an XXXX XXX competitive playing field. To XXXX end, XXXXXXXXXXX need to XXXXXXX a business environment where competition, XXXX XXXXX, consumer choice and XXXX exit XXXXXXXXX who gains and who XXXXX. XXXXXXX XXX XXXXXXXX investors need to XX treated equally XX much XX XXXXXXXX.24As XXXXX XXXXXXXXXXXX in economic XXXXXXXXXX, XXXXXXXX to effective XXXXXXXXXXX XX an even playing field XX the XXXX important XXXXXXXXX XXX XXXXXXX and domestic companies to XXXXXXX technology and management XXXXXXXXX, XXXXX XXXX entry XX XXX XXX XX XXXXXXXXXXXX effective linkages XXXXXXX XXXXXXX investors XXX domestic suppliers and XXXXXXXXXXXX that help XXXXXXX best XXXXXXXX in XXX XXXX XXXXXXX.XX </p> <p>58.XXXXXXXX XXXXXXXX to exploit FDI benefits.X XXXXXXX and competitive XXXXXXXXXX climate creates XXX XXXXX for FDI to enter XXX XXXXX the XXXXXXXXX for XXXXXXXXXXXX growth in the XXXX XXXXXXX, but XXXXXXXXXXXX will only occur if XXX domestic XXXXXX are XXXXXXX of XXXXXXXXXX to XXX XXX XXXXXXXXXX. As discussed in the XXXXXXXX sections, the XXXX XXXXXXX XXXXXXXXX XX XXXXX diffusion XX best XXXXXXXX XX a XXXX of XXXXXXXXXX capabilities to take XXXXXXXXX XX the opportunities. XXX XXX XXXXXX XXXXXXXX are thus XX improve the XXXXXXXXX and infrastructure so as XX increase the domestic absorptive capacity of XXX fruits XX XXX. </p> <p>XX.Building XX environmental and XXXXXX standards.XX XXXXXXXXXXXXX gradually XXXXX XX XXXXXX environmental and XXXXXX XXXXXXXXX XX XXX, XXXXXXXXXXX XXXX XX adjust XXXXX </p> <p>23This XXXXXXXXXX XXXXX from Klein et al. (2001). XXXX is recognized XXXX XXXXX XXX XXXXXXX features XX FDI as XXXXXXXX XX domestic XXXXXXXXXXX, differences in XXXXXXXXX XXX XXX XXXXXXXX XXXXXXXXX. XXX they need to be kept XX a XXXXXXX. 25The negative XXXXXXX XX FDI XXX most often XXXXXX to XXXXXXXXXXXXX XXXXXXXXX in XXX domestic XXXXXXX and selective protections XXXXXXX to certain firms. XXX XXXX, S. and P. Streeten (XXXX),Foreign XXXXXXXXXX, XXXXXXXXXXXXXX XXX developing XXXXXXXXX, XXXXXXXX XXXXX; XXX Graham, E. H. (1995). “XXXXXXX XXXXXX investment in the XXXXX economy.” IMF XXXXXXX Paper WP/XX/59. </p> <p>18 </p> <p>own policies XX fit into XXX XXXXXXXX world norm. XX XXXXXX XXXXX there remains a wide XXX between the world standards and XXXXX XX a XXXX country, XXXXXXXXX XXXXXXX investors XXX XX forced XX XXXX XXXX out XX XXXXXXXXXXXX concerns or they XXX XXXX too much competition XXXX domestic firms not subject XX as XXXXXXXXX norms. To XX XXXX, XXXXXXX XXXXXXXXX have costs, which may XXXXXX XXXX XXXXXXXX XXXXX and XXXXXXX low-XXXX-XXXXXXX FDI. XXXXXXXXXXX have XX XXXXXX how XX position XXXXXXXXXX for XXX long XXXX XXXXXXXX XX their economic development. </p> <p>19 </p> <p>Bibliography </p> <p>XXXXX X. “XXXXXXXXXXXXX XXXXXX XXX XXXXXXXXXXXXXXX in a XXXXXXXXXX economy: conceptual XXXXXX and a XXXXXX of XXX empirical XXXXXXXX”, in OECD XXXXXXXXXXXXX XXX XXXXXXXXXXX: Preliminary XXXXXXXXXXXX, 1997. </p> <p>XXXXXXX, J.X. “Determinants of foreign direct investment: a XXXXXX,”Weltwirtschaftliches XXXXXXX, Vol. 116, 1980. </p> <p>Aitken, X. XXX X. E. XXXXXXXX. “XX domestic XXXXX benefit from XXXXXX XXXXXXX direct XXXXXXXXXX? Evidence XXXX XXXXXXXXX”,The XXXXXXXX XXXXXXXX XXXXXX, XXX. XX, No. 3, XXXX. </p> <p>XXXX, R. M.XXXXXXXXXX development in XXXXXXX XXXXXXXXX: the XXXXXXXX curse thesis, London, XXXXXXXXX, 1993. </p> <p>Barnes, X. XXX R. XXXXXXXXX. “Globalization XXX XXX XXXXX XX XXXXX XXXXX”. XXXXXXXXXX XXXXXXXXX section in XXXXX Africa, 2000. </p> <p>Barro, R.X. “Notes on XXXXXX accounting,” XXXX XXXXXXX Paper No. XXXX, XXXX. XXXXX G. XXX X. XXX.Interfirm XXXXXXXX XXX XXXXXXXXXXXX XXXXXX: evidence </p> <p>form XXXXXXXXX XXXXXXXXXXXXX,XXXXX, XXX XXXXX Bank, Washington, X.C., 2000. XXXXXXXXXXX, X. and J. X. XXX. “How XXXX foreign direct investment affect economic </p> <p>growth?”, NBER XXXXXXX XXXXX No. XXXX, XXXX. </p> <p>XXXXXXX, X. XXX J. Sherman. “XXX Broader XXXXXXX of foreign direct investment XX XXXXXXXX XXXXXXXXXXX in XXXXXXXX: corporate XXXXXXXXX”, 1998. </p> <p>XXXXXXX, S. XXX X. Hoekman. “Foreign XXXXXXXXXX XXX productivity growth in Czech XXXXXXXXXXX”, XXXXXX XXXXXXXX XXXXXXX Paper 2115, The World Bank, XXXXXXXXXX, D.X., XXXX. </p> <p>Dupuy, X and J. XXXXXX. “Les XXXXXX indirects des entreprises XXXXXXXXXXXXXXX sur l’XXXXXX des XXXX d’XXXXXXX”, XXX Working Paper No. 72, XXXX. </p> <p>Eskeland X. XXX X. Harrison. “XXXXXX to XXXXXXX pastures? Multinational XXX XXX evidence XXXX Ghana, XXXXX and Zimbabwe,” XXXX Paper No. XX, The World Bank, Washington, D.X., 1997. </p> <p>Gentry, B. (ed.).Private capital flows and the environment: lessons XXXX XXXXX America,Cheltenham, XXXXXX Elgar Publishing, 1998. </p> <p>20 </p> <p>XXXXXX, E. X. “Foreign XXXXXX investment in the XXXXX XXXXXXX.” XXX XXXXXXX Paper WP/95/59, 1995. </p> <p>XXXXX, X., X. Aaron, XXX X. XXXXXXXXXXXX. “XXXXXXX XXXXXX XXXXXXXXXX XXX poverty XXXXXXXXX”, Policy XXXXXXXX XXXXXXX Paper No. 2613, The World Bank, Washington, X.X., XXXX. </p> <p>Lall, S. “Vertical inter-firm XXXXXXXX in XXXX: an empirical XXXXX,”Oxford Bulletin XX Economics and Statistics, XXX. XX, No. X XX XXXXX, XXXX. </p> <p>Lall, S. XXX X. XXXXXXXX.XXXXXXX investment, XXXXXXXXXXXXX XXX XXXXXXXXXX countries, XXXXXXXX XXXXX, 1977. </p> <p>Leonard, D.XXXXXXXXX and XXX XXXXXXXX XXX the XXXXX product, Cambridge, XXXXXXXXX London, XXXXXXXXX, 1993. </p> <p>Maddison, X. “Growth XXX slowdown in advanced caoutakust XXXXXXXXX: techniques XX XXXXXXXXXXXX assessment”,Journal of XXXXXXXX XXXXXXXXXX, Vol. XX, XXXX. </p> <p>XXXXX prepared XXX XXXX Level XXXXXXXXXX on FDI XXX its Impact XX XXXXXXX XXXXXXXXXXX, XXXXXXXX XXXX. </p> <p>Pearson, X.XXXXXXXXXXXXX XXXXXXXXXXXX, the XXXXXXXXXXX and XXX XXXXX world, XXXXX XXXXXXXX, XXXX XXXXXXXXXX Press, XXXX. </p> <p>Ramachandran, V. and X. X. Shah. “XXX effects of foreign XXXXXXXXX in XXXXXX: evidence XXXX XXXXX, Kenya and XXXXXXXX”, RPED XXXXX No. XX, The World XXXX, XXXXXXXXXX, D.C., XXXX. </p> <p>Sachs, X. XXX X. M. Warner. “XXXXXXX resource abundance and XXXXXXXX XXXXXX.” XXXX Working Paper </p> <p>XXX XXXXXX Nation XXXXXXX, 1944. </p> <p>XXXXXX,World Investment XXXXXX, 1994. </p> <p>XXXXXX,XXXXX XXXXXXXXXX Report, XXXX. </p> <p>XXXXXX.World XXXXXXXXXX Reporton XXXXXXXXX, Brazil and XXXXXXXX, 2000. </p> <p>Wheeler , X. “XXXXXX to XXX bottom? Foreign investment and XXX XXXXXXXXX in XXXXXXXXXX XXXXXXXXX”, mimeo, XXX World Bank, XXXXXXXXXX, D.C., XXXX. </p> <p>XX </p> <p> </p>">
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