Search

Foreign direct investment (FDI) holds a substantial and rapidly growing presence across every region of the world. However, our understanding of how foreign capital impacts economic growth in receiving and investing countries remains in question, despite nearly five decades of research. Our study contributes to this long-standing debate by (1) applying social network analysis to the FDI-growth literature, (2) utilizing recently available bilateral data for a global sample of countries during the post-2000 period, and (3) examining the impact of both inward and outward foreign capital on economic growth. While conventional measures of FDI typically focus on investment volume, we argue that the network structure of investment relations may be equally—or more—important. We construct a global network of FDI during the 2001–2017 period, bringing together two data sets: (1) the United Nations Conference on Trade and Development's Bilateral FDI Statistics, and (2) the International Monetary Fund's Coordinated Direct Investment Survey. We then calculate network centrality scores that reflect each country's level of inward and outward embeddedness in the global FDI network. Drawing from a sample of 1,467 observations across 137 countries during the 2001–2017 period, we estimate two-way fixed effects models to examine the effect of FDI centrality on economic growth. Net of other predictors, we find that inward and outward centrality are positively—and independently—associated with growth, while more conventional measures of foreign capital display weaker and inconsistent effects. [ABSTRACT FROM AUTHOR]

This article explores the impact of foreign investment on development from an organizational perspective, by examining the role of foreign subsidiaries in the economic growth of less developed countries between 1970 and 2000. Two aspects of foreign subsidiaries are considered. The first is the total number of foreign subsidiaries located in a given country. The second dimension is 'foreign subsidiary concentration', the percentage of foreign subsidiaries located in a given country owned by corporations headquartered in a single country. Several findings emerge from structural equation models of 41-70 less developed countries between 1970 and 2000. First, overall growth of foreign subsidiaries between 1970 and 2000 has a positive effect on economic growth in less developed countries. Second, relatively high levels of foreign subsidiary concentration in 1970 inhibit this expansion of foreign subsidiaries. Two other aspects of foreign investment, foreign investment concentration and foreign capital dominance, also retard the expansion of foreign subsidiaries. Further analyses suggest that political corruption may, in part, mediate these relationships. [ABSTRACT FROM AUTHOR]

This study explores the impact of macro-level processes of the global economy on international migration. The authors utilize a cross-national panel regression analysis to examine the effect of foreign direct investment on the level of emigration from 25 less-developed countries between 1985 and 2000. The findings indicate that the stock of foreign direct investment increases net emigration over time, while trade integration lessens these movements. The level of economic development exerts no independent effect on out-migration once other factors are controlled. The results are discussed in the context of contemporary development and migration theories. [ABSTRACT FROM AUTHOR]