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The nexus between trade openness and foreign direct investment, amid structural economic vulnerability in developing countries
Date Issued:
2021
Author(s):
Nguyen, Quynh Chi
FSPPM
Abstract:
Foreign direct investment (FDI) is important to economic growth in developing countries, where capital, labor, technology, productivity materials and other production resources for development are usually lacking. FDI enhances access to missing economic resources and open opportunities for developing economies to engage in the globalizing free markets. It enhances trade intensity through imports for production inputs and exports of outputs, two main components of trade openness. Developing countries with small and medium-scaled economies usually attract more FDI inflows through trade openness or trade liberalization.