FDI from Emerging Countries: Motivations and Impacts

In the last decade, the share of Foreign Direct Investment (FDI) outflows from emerging countries (EOFDI) increased dramatically, and substantially changed the landscape of the world economy. This paper summarises the findings of the flourishing literature about the reasons and consequences of EOFDI. We first review the economic theories that explain emerging multinationals investments abroad, building on the conventional theory of FDI and the institutional theory. We also draw the conclusions emerging from empirical studies. In a second step, we provide an overview of the expected effects of EOFDI on the host. We also report the findings of the scant studies that recently attempted to assess these effects. Clearly, the institutional and economic home contexts contribute to shape firms advantages and in turn, their motivations to invest abroad and their location choice and finally, the impact of these investments. Thanks to recent studies, motivations and location choices are now better understood, but more research is needed to clarify the rest of the process, a promising area of research. In particular, the coverage of studies should be extended in several directions. The results would helpfully guide FDI promoting policies in the South and in the North.
Federico Carril Caccia and Juliette Milgram Baleix
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Sección Especial: 20 años de Economía Mundial

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