Publication Type
Working Paper
Version
publishedVersion
Publication Date
2-2010
Abstract
This paper builds a dynamic model of catching up to examine the policy stance of developing countries in attracting inward FDI. We show that the observably evident risk of FDI failure sets a minimum threshold on the South's technology capacity and furthermore creates a limit on the technology content of inward FDI. We provide economic foundations for the determinants of the FDI risk and formalize how the risk factor evolves over time as the South moves up its technology ladder. The model offers an insightful and tractable framework for empirical studies with a dynamic content, and reconciles many relevant empirical observations and policy implications.
Keywords
Foreign Direct Investment, Technology, Risk, Learning by Doing, Dynamic
Discipline
International Economics
Research Areas
International Economics
First Page
1
Last Page
42
Publisher
SMU Economics and Statistics Working Paper Series, No. 30-2010
City or Country
Singapore
Citation
CHANG, Pao Li and LU, Chia-Hui.
Risk, Learning, and the Technology Content of FDI: A Dynamic Model. (2010). 1-42.
Available at: https://ink.library.smu.edu.sg/soe_research/1163
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.