Foreign Direct Investment

The behaviour of multinational corporations and their affiliates, and the impact of foreign direct investment on host economies, vary between countries and industries in a systematic way. Multinational corporations (MNCs) select their strategies depending on the characteristics of their technologies and products, as well as the characteristics and policies of the host countries. Some host country governments try simultaneously to influence the behaviour of the foreign MNCs operating in their territory, either directly through regulations, or indirectly by affecting the environment in which the MNCs operate. The effects of foreign direct investment (FDI) on the host economy are determined by this intricate interplay of firm and host country strategies. This book summarizes more than a decade of research aiming to understand this interplay.
The analyses of MNC behaviour and the effects of FDI presented in this book are of interest to students of international business, economics and development, as well as to policy-makers in countries hosting foreign MNCs.

Magnus Blomstrom is Professor of Economics at the Stockholm School of Economics and the Director of the European Institute of Japanese Studies in Stockholm. He is also a Research Associate at the National Bureau of Economic Research (NBER) in the United States and a Research Fellow at the Centre of Economic Policy Research (CEPR) in Europe.