FDI in LDCs: Facts, theory and empirical evidence

One of the most striking signs of globalization is the strong growth in foreign direct investment (FDI) during the last two decades, and particularly since the second half of the 1980s. The present paper describes recent trends, with emphasis on issues related to developing countries. It explains what motivates firms may have to undertake FDI, and analyses how FDI may affect host country welfare.