Foreign Direct Investment Behaviour in Low and Middle Income Countries

This project will examine the impact of foreign direct investment (FDI) on economic efficiency, poverty and inequality in low- and middle-income countries. It will seek to answer such questions as the following. Does FDI actually stimulate growth and development in low-income countries? Do the benefits of FDI, such as new technology and improved productivity, accrue to low- and middle-income countries to the same extent? Are policies and institutional structures equally effective in attracting FDI to low- and middle-income countries? Does FDI help reduce poverty and inequality and if so, under what circumstances? Researchers will carry out firm-level surveys in South Africa and Viet Nam, and analyze the flow and impact of different types of FDI. They will undertake a cross-country regression analysis that will address the macroeconomic policy and institutional determinants of FDI in groups of developing countries that share key features such as income level or economic structure. The project is expected to shed light on why FDI concentrates in certain types of developing countries, and to yield policy recommendations for inducing larger volumes of FDI flows and developmental impacts.

Project ID


Project status


Start Date

Friday, March 10, 2006

End Date

Saturday, January 10, 2009


24 months

IDRC Officer

Melesse, Martha

Total funding

CA$ 391,200


Canada, North and Central America, Far East Asia, Viet Nam, South Africa, North of Sahara, South of Sahara, South America, Central Asia, South Asia


Employment and Growth

Project Leader

Dr Stephen Gelb


EDGE Institute (Association incorporated under Section 21)

Institution Country

South Africa

Institution Website

Project Leader

Dr Nguyen Thang


Centre for Analysis and Forecasting

Institution Country

Viet Nam

Project Leader

Dr Rodney Schmidt


North South Institute

Institution Country


Institution Website