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Communications Networks and Foreign Direct: Investment in Developing Countries

Author

Listed:
  • Lydon, Reamonn
  • Williams, Mark

Abstract

It is widely accepted that investment is essential for the long-term economic growth of developing countries. There is some evidence that Foreign Direct Investment (FDI) in developing countries provides spill-over benefits through technology and skills transfer. Understanding the determinants of FDI inflows into developing countries is therefore an important policy objective. This paper shows that average FDI inflows into developing countries are greater in countries that have better telecommunications networks. In more recent years, this relationship can also be detected between FDI and mobile networks. The analysis has been refined to take account of countries' endowment of natural resources and the an attempt has been made to deal with the problem of endogeneity.

Suggested Citation

  • Lydon, Reamonn & Williams, Mark, 2005. "Communications Networks and Foreign Direct: Investment in Developing Countries," MPRA Paper 2492, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:2492
    as

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    File URL: https://mpra.ub.uni-muenchen.de/2492/1/MPRA_paper_2492.pdf
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    References listed on IDEAS

    as
    1. David W Loree & Stephen E Guisinger, 1995. "Policy and Non-Policy Determinants of U.S. Equity Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(2), pages 281-299, June.
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    3. Robert E. Lipsey, 1999. "The Location and Characteristics of U.S. Affiliates in Asia," NBER Working Papers 6876, National Bureau of Economic Research, Inc.
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    5. Morisset, Jacques, 2000. "Foreign direct investment in Africa : policies also matter," Policy Research Working Paper Series 2481, The World Bank.
    6. Barry P. Bosworth & Susan M. Collins, 1999. "Capital Flows to Developing Economies: Implications for Saving and Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 143-180.
    7. Asiedu, Elizabeth, 2002. "On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?," World Development, Elsevier, vol. 30(1), pages 107-119, January.
    8. Sebastian Edwards, 1990. "Capital Flows, Foreign Direct Investment, and Debt-Equity Swaps in Developing Countries," NBER Working Papers 3497, National Bureau of Economic Research, Inc.
    9. Reynolds, Taylor & Kenny, Charles & Liu, Jia & Qiang, Christine Zhen-Wei, 2004. "Networking for foreign direct investment: the telecommunications industry and its effect on investment," Information Economics and Policy, Elsevier, vol. 16(2), pages 159-164, June.
    10. Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August.
    11. Nagesh Kumar, 1994. "Determinants of Export Orientation of Foreign Production by U.S. Multinationals: An Inter-Country Analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(1), pages 141-156, March.
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    More about this item

    Keywords

    Africa; capital flows; foreign direct investment; investment risk; developing; countries and telecommunications;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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