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Can the Neoclassical Model Explain the Distribution of Foreign Direct Investment Across Developing Countries?
Author:
Mr. Harm Zebregs
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Series:
IMF Working Papers
Volume/Issue:
Volume 1998: Issue 139
Language:
English
Publication Date:
01 Sep 1998
DOI:
https://doi.org/10.5089/9781451929607.001
ISBN:
9781451929607
ISSN:
1018-5941
Pages:
28
Keywords:
WP; FDI flow; FDI-GNP ratio; capital; GNP; Foreign Investment; Neoclassical Theory; flows to developing countries; FDI data; share parameter; Foreign direct investment; Capital flows; Capital productivity; East Asia
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Since the beginning of the 1990s, foreign direct investment (FDI) in developing countries has increased dramatically. The distribution of FDI flows across these countries, however, is highly uneven; only a small number attract comparatively large amounts of foreign capital. This paper investigates whether the pattern of FDI flows can be explained by the standard neoclassical model or by modified versions of this model that allow for differences in production technologies across countries. The results suggest that the standard neoclassical approach is not particularly useful if we want to understand FDI flows to developing countries.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund