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Foreign direct investment from developing countries: a systematic review

By Tiju Prasad Kodiyat

Abstract

The privileges of integration with the global economy have led developing countries to embark on a path of liberalisation and globalisation. This resulted in rapid growth of inward and outward foreign direct investment from developing countries. In the last two decades there is an increasing trend of outward FDI from developing countries to both developed and developing countries. This dissertation focuses on exploring the literature on outward FDI from developing countries, and internationalisation process of developing country multinationals which are considered to be carriers to investment across international borders. The study has examined the two main strands of literature on outward FDI from developing countries – determinants of outward FDI and internationalisation process. Findings of the systematic review show that there is a dearth of studies in this area of research. Except a number of studies on China and countries of East and South East Asia, there is very limited evidence on outward FDI from developing countries. There is a set of studies on Africa that examine South-South investment flows. Studies on other major developing countries are either non-existent or lack in comprehensiveness. Some studies resulted in contradictory findings about the determinants of outward FDI. This raises the question of sensitivity of variables across geographical locations and time periods, which has not been researched before. Studies on outward FDI also do not make a clear distinction between South-South and South-North FDI flows. Other aspects like sovereign wealth funds and commodity price boom have been ignored in the literature. It is important to investigate outward FDI flows from the major developing economies because of its sheer scope to contribute to academic literature, its policy implications, and also because of its potential to bring development to some of the most impoverished parts of the world

Topics: Outward foreign direct investment, developing country, south-south FDI, south-north FDI, developing country multinational enterprise, internationalisation
Publisher: Cranfield University
Year: 2009
OAI identifier: oai:dspace.lib.cranfield.ac.uk:1826/6576
Provided by: Cranfield CERES

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