Attracting Quality Foreign Direct Investment in Developing Countries

Foreign direct investment (FDI) in developing countries has a bad reputation. In some discussions, it is presented as tantamount to postcolonial exploitation of raw materials and cheap labour. However, recent data shows that FDI in developing countries increasingly flows to medium and high-skilled manufacturing sectors, involving elevated income levels. What’s more, many emerging economies have built their growth on FDI flows. The trick is to attract “quality FDI” that links foreign investors into the local host country economy.