Foreign direct investment plays a critical and growing role in the global economy. For a host country, FDI promises a source of new resources and new technologies that could spur economic growth and development. For multinational firms, FDI offers the promise of new markets and less expensive production facilities. But there are clearly risks involved as well as legitimate concerns about the extent to which potential benefits are appropriately shared.
This tenth issue of the Brookings Trade Forum examines a variety of dimensions of FDI. On balance, have developing countries benefited from FDI inflows? To what extent has FDI played an important role in China's impressive economic performance? How do tax and productivity differences between source and host countries affect bilateral FDI flows? How have profits been shared between multinational corporations and host country governments in resource-rich economies? Why do U.S. investors appear to earn substantially higher returns on their investment abroad than foreigners earn on their investments in the United States?
Contributors: Laura Alfaro, Barry Bosworth, Gabriel Chodorow-Reich, Mihir A. Desai, Beata Smarzynska Javorcik, Nicholas R. Lardy, Margaret McMillan, Theodore H. Moran, Assaf Razin, Efraim Sadka, Deborah Swenson, Cédric Tille, Andrew R. Waxman, Shang-Jin Wei, John Whalley, Wing Thye Woo, Xian Xin