Kiel Working Papers, Kiel Institute for World Economics
No 1122:
Determinants of FDI in Developing Countries: Has Globalization Changed the Rules of the Game?
Peter Nunnenkamp
Abstract: There is a startling gap between, allegedly,
globalization-induced changes in international competition for foreign
direct investment (FDI) and recent empirical evidence on the relative
importance of determinants of FDI in developing countries. We show that
surprisingly little has changed since the late 1980s. Traditional
market-related determinants are still dominant factors. Among
non-traditional FDI determinants, only the availability of local skills has
clearly gained importance. As concerns the interface between trade policy
and FDI, we find that the tariff jumping motive for FDI had lost much of
its relevance well before globalization became a hotly debated issue.
Keywords: foreign direct investment, market size, cost factors, human capital, openness to trade, globalization; (follow links to similar papers)
JEL-Codes: F21; (follow links to similar papers)
44 pages, July 2002
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