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FDI from BRICs to LICs: Emerging Growth Driver?
Author:
Mr. Montfort Mlachila
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and
Ms. Misa Takebe
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Series:
IMF Working Papers
Volume/Issue:
Volume 2011: Issue 178
Language:
English
Publication Date:
01 Jul 2011
DOI:
https://doi.org/10.5089/9781462311309.001
ISBN:
9781462311309
ISSN:
1018-5941
Pages:
31
Keywords:
WP; SSA country; FDI flow; natural resource; Chinese FDI; FDI; BRICs; low-income countries; China FDI outflow; headline FDI number; economic zone; LIC government; FDI inflow; FDI data; FDI firm; Foreign direct investment; Natural resources; Mining sector; Infrastructure; Economic cooperation; Africa; Sub-Saharan Africa; Global; Middle East; Asia and Pacific
Legal-disclaimer:
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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Despite the rapid increase in FDI flows to LICs, there have been relatively few studies that have specifically examined these flows. This paper attempts to partially fill the void by throwing light on one particularly dynamic aspect of global FDI-flows from Brazil, Russia, India and China (BRICs). The paper finds that official data sources undoubtedly underestimate the volume and scope of FDI flows as many small and medium-sized enterprises (SMEs) do not always register their investment. As a result, while it is difficult to estimate accurately the growth impact of BRIC FDI, there is case study evidence that it is increasingly significant. Second, while initial investment, mostly by state-owned companies, has often been destined for natural resource industries, over time, investment has been spreading to agriculture, manufacturing, and service industries (e.g., telecommunications). Third, FDI from BRICs flows into many non resource-rich countries in LICs and plays a significant role in growth in those countries.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund