The Distribution of Foreign Direct Investment and the Excluded Economies
The paper takes as its objective context the growing disparity in the distribution of Foreign Direct Investment (FDI) among the developing nations. While FDI in the developing world has grown fairly rapidly since the late 1980s, a disaggregated analysis demonstrates a considerable imbalance at the macro level. While China stands out as the largest recipient, the Sub-Saharan African (SSA) countries and the countries of Middle East and North Africa (MNA) are experiencing a continuous drying up of inbound FDI. The goal of this paper is to first develop a theoretical model of the economic determinants of FDI and then use the structutral model to identify empirically the causes of and suggest potential remedies for, the disparity in the distribution of inward FDI among the developing economies.
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