FDI from Developing Countries A Vector for Trade and Development

• Main Author: Lee, Byung-Hwa
• Format: Publication
• Language: English
• Published: Paris OECD Publishing 2002
• Series: Development Centre Studies
• ISBN: 9264176020; 9789264176027
• DOI: 10.1787/9789264176027-en

This book illustrates Korea's experience with outward foreign direct investment (FDI) and shows that the ancillary benefits of such investment -- knowledge and management transfer, market acquisition and skills enhancement -- can be substantial for individual firms. Moreover, the resulting increased robustness of these enterprises contributes to the strength and stability of the economy as a whole. While it is true that inward FDI carries similar benefits, outward FDI -- driven by the prerogatives of the domestic company -- is integrated into existing business plans and strategies, and therefore constitutes a more active policy. No experience is directly transferable, but the Korean case shows that there is a large potential for other emerging economies to gain from FDI flows and that the initial costs from lost internal investment are largely outweighed by the medium-term benefits.