From Announcement to Completion: Tracking Big FDI Projects in LICs

Although many studies have analyzed the drivers and impact of foreign direct investment, less is known about its determinants at different stages of the investment planning and implementation cycle. Meanwhile, researchers are increasingly relying on data tracking announcements of FDI projects, rather than traditional balance-of-payments information, which reflects actual investments. What share of announced projects is completed, and what factors can derail an investment’s progress after a decision is announced? This paper examines the implementation outcomes of all large announced greenfield FDI projects in low-income countries between 2011 and 2020 and explores some of the factors associated with greater likelihood of implementation. It finds that less than half of the projects in the sample were completed or remained on track. Implementation outcomes vary considerably across sectors and source countries. Based on a systematic analysis of publicly available information reported by companies and the media, the most frequently reported barriers to project realization seem to be policy, regulatory, and administrative constraints, as well as financing difficulties and investor-related challenges. Moreover, econometric results indicate that stronger post-announcement economic growth increases the likelihood of project completion, whereas larger projects are less likely to become operational. Among completed projects, the average time from announcement to operation is about three years; timelines vary across business activities but show little relationship with project size.