Developing Economies and International Investors : Do Investment Promotion Agencies Bring them Together?

Harding, Torfinn ; Javorcik, Beata Smarzynska

World Bank, Washington, DC

关键词: ADVERTISEMENTS;    AFFILIATED ORGANIZATIONS;    AGGLOMERATION EFFECTS;    ALTERNATIVE INVESTMENT;    BANK POLICY;   

DOI  :  10.1596/1813-9450-4339
RP-ID  :  WPS4339

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Many countries spend significantresources on investment promotion agencies in the hope ofattracting inflows of foreign direct investment. Despite theimportance of this question for public policy choices,little is known about the effectiveness of investmentpromotion efforts. This study uses newly collected data onnational investment promotion agencies in 109 countries toexamine the effects of investment promotion on foreigndirect investment inflows. The empirical analysis followstwo approaches. First, it tests whether sectors explicitlytargeted by investment promotion agencies receive moreforeign direct investment in the post-targeting periodrelative to the pre-targeting period and non-targetedsectors. Second, it examines whether the existence of aninvestment promotion agency is correlated with higherforeign direct investment inflows. Results from bothapproaches point to the same conclusion. Investmentpromotion efforts appear to increase foreign directinvestment inflows to developing countries. Moreover, agencycharacteristics, such as the agency's legal status andreporting structure, affect the effectiveness of investmentpromotion. There is also evidence of diversion of foreigndirect investment due to investment incentives offered byother countries in the same geographic region.