In this thesis, I examine the relationship between foreign direct investment (FDI) in a host country and human development. Human development comprises the education, health, and income opportunities available to people in a particular country. I assert that FDI can potentially enhance human development through economic growth and higher income in a host country. However, alongside these benefits, FDI can also have negative effects by worsening a host country's income inequality. Given FDI's counteracting positive and negative effects on human development, I propose that FDI's net effect on human development takes the form of an inverted U-shaped relationship. I further predict that a host country's institutional maturity, defined as the degree of institutional development within a country, plays an important role in understanding which national contexts strengthen or weaken this relationship. I contend that the inverted U-shaped relationship between FDI and human development is moderated by a host country's institutions, and assess this moderation with respect to two dimensions: business sophistication and transparency. Business sophistication measures the extent to which a country possesses supplier networks, technology production, and advanced business practices (World Economic Forum, 2015). My results show that countries with low business sophistication have a pronounced inverted U-shaped relationship between FDI and human development, while countries with high business sophistication experience an attenuated effect (flattened inverted U-shaped). Similarly, transparency measures public-sector employees and executives' accountability and performance, as well as civil society's access to information about public affairs (World Bank, 2016). My results show that economies with low transparency have a steeper inverted U-shaped relationship between FDI and human development; by contrast, economies with high transparency exhibit a flatter inverted U-shaped curve. My study makes three core contributions to the field. First, it adds to development economics scholars' analysis of human development by proposing that income inequality is a key FDI cost. Therefore, while FDI can indeed enhance human development (as past studies have shown), it can also have a negative effect by worsening a host country's income inequality. Second, my study facilitates better knowledge of the relationship between FDI and human development by integrating the positive and negative effects of this relationship. Third, in line with studies that propose the contingent effects of FDI (Meyer & Sinani, 2009), my study contributes to understanding how a host country's institutional maturity in the private and public sectors affects the strength of FDI's curvilinear effect on human development.

The effect on developing countries of the arrival of foreign direct investment (FDI) has been a subject of controversy for decades in the development community. The debate over the relationship between FDI in developing countries and the progress of these countries towards human development is an ongoing and often heated one. Adopting an interdisciplinary perspective combining insights from international investment law, human rights law and economics, this book offers an original contribution to the debate. It explores how improvements ...

Provides a comprehensive review of the issues related to the impact of FDI on development as well as to the policies needed to maximise the benefits.

In the 1990s, foreign direct investment began to swamp all other cross-border capital flows into developing countries. Does foreign direct investment support sound development? In particular, does it contribute to poverty reduction?

We test the effect of foreign direct investment (FDI) on economic growth in a cross-country regression framework, utilizing data on FDI flows from industrial countries to 69 developing countries over the last two decades. Our results suggest that FDI is an important vehicle for the transfer of technology, contributing relatively more to growth than domestic investment. However, the higher productivity of FDI holds only when the host country has a minimum threshold stock of human capital. In addition, FDI has the effect of increasing total investment in the economy more than one for one, which suggests the predominance of complementarity effects with domestic firms.

The outbreak of the COVID-19 pandemic has helped accelerate the digitization of public services. The lockdown initiated by most governments to curb the spread of the coronavirus forced most public agencies to switch to online platforms to continue providing information and services to the public. It is widely recognized that information diffusion and communication technology play a large role in improving the quality of public services in terms of time, cost, and interface with the public, business, and other agencies. Potentially, e-government could enhance a country’s locational advantages and attract more Foreign Direct Investment (FDI) inflows. This hypothesis is tested empirically using an unbalanced panel data analysis for 178 host countries over the period 2003-2018. The results suggest that e-government stimulates the inflow of FDI.

Abstract: May 2000 - How much a developing country can take advantage of technology transfer from foreign direct investment depends partly on how well educated and well trained its workforce is, how much it is willing to invest in research and development, and how much protection it offers for intellectual property rights. Saggi surveys the literature on trade and foreign direct investment - especially wholly owned subsidiaries of multinational firms and international joint ventures - as channels for technology transfer. He also discusses licensing and other arm's-length channels of technology transfer. He concludes: How trade encourages growth depends on whether knowledge spillover is national or international. Spillover is more likely to be national for developing countries than for industrial countries; Local policy often makes pure foreign direct investment infeasible, so foreign firms choose licensing or joint ventures. The jury is still out on whether licensing or joint ventures lead to more learning by local firms; Policies designed to attract foreign direct investment are proliferating. Several plant-level studies have failed to find positive spillover from foreign direct investment to firms competing directly with subsidiaries of multinationals. (However, these studies treat foreign direct investment as exogenous and assume spillover to be horizontal - when it may be vertical.) All such studies do find the subsidiaries of multinationals to be more productive than domestic firms, so foreign direct investment does result in host countries using resources more effectively; Absorptive capacity in the host country is essential for getting significant benefits from foreign direct investment. Without adequate human capital or investments in research and development, spillover fails to materialize; A country's policy on protection of intellectual property rights affects the type of industry it attracts. Firms for which such rights are crucial (such as pharmaceutical firms) are unlikely to invest directly in countries where such protections are weak, or will not invest in manufacturing and research and development activities. Policy on intellectual property rights also influences whether technology transfer comes through licensing, joint ventures, or the establishment of wholly owned subsidiaries. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study microfoundations of international technology diffusion. The study was funded by the Bank's Research Support Budget under the research project Microfoundations of International Technology Diffusion. The author may be contacted at ksaggi@mail.smu.edu.

This book brings a completely new dimension into the study of determinants of international trade and foreign direct investment in the Central and Eastern European countries that recently joined the European Union. The main aim of the book is to shed a new light on the role of human development in the open economy context. The book challenges the conventional view that a country's success in the global economy is contingent on restricting expenditures on human development. On the contrary, it is argued that improvements in educational and healthcare systems stimulate international trade and direct investment, while the role of income and gender equality and degree of civil liberties is less clear-cut. The book offers an optimal blend of theory and empirical analysis with practical policy implications.