Foreign Direct Investment and Development

by Moran, Theodore H.

• ISBN13: 9780881322583
• ISBN10: 088132258X
• Format: Paperback
• Copyright: 1998-09-01
• Publisher: Peterson Inst for Intl Economics

Author Biography

Theodore H. Moran, Visiting Fellow, is the Director of the Pew Economic Freedom Fellows Program and is the Karl F. Landegger Professor of International Business Diplomacy at Georgetown University

Table of Contents

Preface	xi	(3)
Acknowledgments	xiv
Introduction and Synopsis	1	(14)
I FDI in Developing Countries and Economies in Transition: Opportunities, Dangers, and New Challenges	15	(14)
Introduction	15	(4)
1 The Impact of FDI on Host-Country Development: The Heritage of Theory and Evidence	19	(10)
The Benign Model of FDI and Development	19	(1)
The Malign Model of FDI and Development	20	(1)
Theory and Evidence about Market Structure and FDI	21	(3)
Three Earlier Net Assessments of the Impact of FDI on Development	24	(5)
II Host-Country Policies to Shape Foreign Investor Activities: Investment Promotion, Domestic-Content Requirements, and Export-Performance Requirements	29	(88)
Introduction	29	(2)
2 Theoretical Considerations about Host-Country Intervention in Investment Promotion, Domestic-Content Requirements, and Export-Performance Requirements	31	(6)
3 Foreign Firms and Host-Country Investment Promotion	37	(4)
4 FDI and Domestic-Content Requirements	41	(8)
Evidence about Domestic-Content Requirements	41	(2)
Reasons for the Adverse Impact of Domestic-Content Requirements	43	(2)
The Adverse Political Economy of Domestic-Content Requirements	45	(4)
5 FDI and Export-Performance Requirements	49	(36)
FDI and Exports in the Automotive Sector: Mexico, Brazil, and Thailand	51	(10)
Export-Performance Requirements for Foreign Investors and Global Sourcing in the Automotive Sector: A Preliminary Assessment	61	(2)
FDI and Exports in the Petrochemical Sector	63	(8)
FDI and Exports in the Electronics/Computer Sector	71	(10)
Export-Performance Requirements and the Globalization of the Automotive, Petrochemical, and Electronics/Computer Sectors	81	(4)
6 Comparative Advantage and the Globalization of Manufacturing Industries: The Struggle to Tilt the Playing Field for International Investment	85	(32)
Market Failure Rationales for Host-Country Intervention	86	(8)
Second-Best Rationales for Host-Country Intervention	94	(8)
Strategic-Trade Struggles and the Intersection between Trade Protection and Investment Diversion	102	(11)
Policy Implications for Using Foreign Investors to Penetrate International Markets: The Dilemmas of Passivism, Escalation, and Playing for a Draw	113	(4)
III Host-Country Policies to Constrain Ownership on the Part of Foreign Direct Investors: Joint-Venture Mandates and Technology-Licensing Requirements	117	(22)
Introduction	117	(2)
7 FDI and Joint-Venture Requirements	119	(8)
Joint-Venture Requirements and Technology Transfer	121	(2)
Joint-Venture Requirements and Export Performance	123	(2)
Joint-Venture Requirements and Backward Linkages to the Domestic Industrial Base	125	(2)
8 FDI and Technology-Licensing Requirements	127	(12)
Mandatory Technology Licensing and Technological Deepening	128	(3)
Technology-Licensing Requirements and Industrial Deepening	131	(2)
Technology-Licensing Requirements and Enhanced Control over National Champions	133	(1)
Technology-Licensing Requirements and National Security	134	(5)
IV Host-Country Policies toward Natural-Resource and Private-Infrastructure Investment	139	(14)
Introduction	139	(2)
9 Structural Vulnerability, Imperfect Contracts, and "Political Risk" in Natural-Resource and Private-Infrastructure Projects	141	(12)
Structural Vulnerability and the Obsolescing Bargain	142	(3)
Multilateral Mechanisms to Enhance the Stability of Investment Agreements	145	(4)
A Balance between Stability and Flexibility	149	(4)
V Findings, Conclusions, and Policy Implications	153	(16)
Introduction	153	(2)
10 Incorporating FDI into the Development Process: From Traditional Concerns to a New Agenda for Action	155	(14)
Market Failures, Market Interventions, and the Struggle for International Corporate Operations	157	(2)
A New Policy Agenda toward FDI	159	(2)
Tactics for Pursuing the New FDI Agenda: Following a Path of Unilateral Restraint	161	(2)
Tactics for Pursuing the New Agenda toward FDI: Negotiating a Grand Bargain within a Broadened and Revised MAI	163	(5)
Leadership, Vision, and a New North-South Dialogue	168	(1)
References	169	(12)
Index	181