Information Externalities Affecting the Dynamic Pattern of Foreign Direct Investment The Case of China

The dynamic pattern of foreign direct investment (FDI) in developing countries shows a three-phase pattern. Despite government policies that promote it, initially the inflow of FDI is sluggish, followed by a period of considerable fluctuation before finally entering the stage of rapid growth. The pa...

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Main Author: Shirai, Sayuri
Other Authors: Huang, Dongpei
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1994, 1994
Series:IMF Working Papers; Working Paper
Subjects:
Fdi
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Summary:The dynamic pattern of foreign direct investment (FDI) in developing countries shows a three-phase pattern. Despite government policies that promote it, initially the inflow of FDI is sluggish, followed by a period of considerable fluctuation before finally entering the stage of rapid growth. The paper explains the pattern through recourse to two concepts: the searching process of individual investors and the information externalities of investors in the aggregate. Policy implications that may serve to shift an economy of a developing country from small-scale FDI to one of rapidly expanding FDI are considered. As China is a clear example of this pattern, it has been selected to promote understanding of the process
Physical Description:28 p.
ISBN:1451974647
9781451974645