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Microeconomic consequences and macroeconomic causes of foreign direct investment in southern African economies / Lederman, Daniel
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Lederman, Daniel
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Advanced economies.
- Debt Markets.
- Demographic.
- Developing countries.
- Economic development.
- Economic Theory & Research.
- Emerging Markets.
- Finance and Financial Sector Development.
- Financial intermediaries.
- Firm performance.
- Foreign capital.
- Foreign Direct Investment.
- Foreign firms.
- Foreign ownership.
- Growth rates.
- Human capital.
- Income.
- Institutional environment.
- International Economics and Trade.
- Investment and Investment Climate.
- Investment climate.
- Macroeconomics and Economic Growth.
- Private Sector Development.
- Regional integration.
- Sales growth.
- Technology transfer.
- Track record.
- Local Subjects:
- Advanced economies.
- Debt Markets.
- Demographic.
- Developing countries.
- Economic development.
- Economic Theory & Research.
- Emerging Markets.
- Finance and Financial Sector Development.
- Financial intermediaries.
- Firm performance.
- Foreign capital.
- Foreign Direct Investment.
- Foreign firms.
- Foreign ownership.
- Growth rates.
- Human capital.
- Income.
- Institutional environment.
- International Economics and Trade.
- Investment and Investment Climate.
- Investment climate.
- Macroeconomics and Economic Growth.
- Private Sector Development.
- Regional integration.
- Sales growth.
- Technology transfer.
- Track record.
- Physical Description:
- 1 online resource (34 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2010
- System Details:
- data file
- Summary:
- The causes and consequences of foreign direct investment (FDI) in developing countries remains a subject of debate among researchers and policymakers alike. The authors use international data and a new micro-data set of firms in thirteen Southern African Developing Countries (SADCs) to investigate the benefits and determinants of FDI in this region. FDI appears to have facilitated local development in the SADC region. Foreign firms tend to perform better than domestic firms, tend to be larger, are located in richer and better-governed countries and in countries with more competitive financial intermediaries, and they are more likely to export than domestic firms. They also exhibit positive spillover effects to domestic firms. Relying on a standard model to predict the country-level FDI inflows per capita, the authors find that SADC is attracting their expected level of FDI inflows, at least relative to its income level, human capital, demographic structure, institutions, and economic track record. There are some differences between SADC and the rest of the world in FDI behavior: in SADC, the income level is less important and openness more so. The authors use two comparison groups to compare with SADC to shed light on why other regions have attracted more FDI per capita than SADC. The factors that explain SADC's low FDI inflows are economic fundamentals (e.g., previous growth rates, average income, phone density, and the adult share of population).
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