Fdi And Poverty Reduction: A Critical Reappraisal Of The Arguments
AbstractOver the last two decades, enormous efforts have been made by developing countries to attract Foreign Direct Investment (FDI). It is commonly agreed upon that, by accelerating economic growth, FDI is a determining feature in poverty reduction. This paper argues that this view needs to be qualified by considering the stylistic facts and existing empirical evidence on the contribution of FDI to growth and poverty reduction. Echoing work by trade economists on the impact of trade on poverty reduction, a simplified framework is suggested which breaks down the influence of FDI into its "growth enhancing" and "distributional" effects. Contrary to the (now) conventional wisdom, little evidence is found that FDI is a major instrument for poverty reduction.
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Bibliographic InfoArticle provided by Region et Developpement, LEAD, Universite du Sud - Toulon Var in its journal Region et Developpement.
Volume (Year): 20 (2004)
Issue (Month): ()
FOREIGN DIRECT INVESTMENT; POVERTY REDUCTION; LEAST DEVELOPED COUNTRIES; MULTINATIONALS;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
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