Does FDI work for Africa? Assessing local spillovers in a world of global value chains
Year: 2014
Type: book
Abstract: The extent to which developing countries benefit from foreign direct investment (FDI) depends on whether they are able to realize the productivity-enhancing benefits of knowledge and technology spillovers from foreign investors. To date, the experiences in Sub-Saharan Africa have been largely disappointing. This is perhaps not surprising, bearing in mind the complex interplay of factors needed for spillovers to emerge. On top of the challenges of supply side capacity and the host country’s policy environment, the willingness and capacity of foreign investors to support spillovers vary hugely across sectors and firms, and are shaped by the dynamics of the global value chains (GVCs) in which they operate. This note summarizes the main findings from the new World Bank book Making Foreign Direct Investment Work for Sub-Saharan Africa and discusses the implications for policy makers hoping to harness the potential of FDI for better devel-opment outcomes. FDI to low- and middle-income countries expanded 30-fold in the last 20 years, almost 6 times faster than in high-income countries and nearly 10 times faster than global gross domes-tic product (GDP). This rapid growth resulted partially from liberalization in global trade and investment regimes and par-tially from advances in transport and communications, which
DOI: 10.1596/44555
Authors: Thomas Farole, Deborah Winkler
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2115950229