Trends and Determinants of Foreign Direct Investment in South Asia

World Bank

Washington, DC

关键词: FDI;    FDI GROWTH;    FDI POLICIES;    FOREIGN DIRECT INVESTMENT;    INFLOWS;   

RP-ID  :  ACS4846

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Like many other developing countries,South Asian nations have been experiencing increased ForeignDirect Investment (FDI) inflows over the past decade asdeveloping countries get a larger share of cross-borderinvestments once sent to developed countries. Nonetheless,South Asia's FDI inflows remain the lowest relative toGross Domestic Product (GDP) among developing countryregions. Over the next 20 years, more than one million newworkers will be entering the South Asian labor market eachmonth as the region's youth bulge matures and seeksemployment. To absorb these workers and provide higherliving standards and reduce poverty, South Asian countrieswill have to rely on more than just public investment. Thisreport looks into the historical patterns of FDI in SouthAsia, examines its sectoral composition, and evaluatescurrent policies and policy options that may help create anenvironment for increasing FDI flows. The launching pointfor this study is the substantial empirical literature thatsuggests that FDI is associated with growth, development,and productivity enhancement. The goal of the study ismodest in that it does not seek to estimate the size of FDIspillovers on productivity growth, or address whethergovernments should actively subsidize FDI inflows overdomestic investment as a means to enhance growth, but ratherto understand whether the level of FDI flows as a share ofGDP, its sectoral composition, and intra-regional flows arecomparable to other developing regions and, if not, whatmight be some of the impediments to these flows. While FDIflows have increased over the past decade to South Asia,particularly from developed countries to South Asian servicesectors, it has lagged in other sectors and remainsrelatively low overall. Overall, positive changes have takenplace over the past few decades, while restrictions on FDIdiffer substantially among countries in South Asia.India's progress on FDI promoting policies hasaccelerated in recent years to make FDI policies moretransparent, predictable, and simpler. Many other countrieshave also taken steps to improve transparency in regulationsand reassure investors about the security of theirinvestments in the country. Finally, the paper examines thedeterminants of FDI growth in South Asia.