FDI from BRICs to LICs : Emerging Growth Driver?

Author/Editor:

Misa Takebe ; Montfort Mlachila

Publication Date:

July 1, 2011

Electronic Access:

Free Full text (PDF file size is 1343 KB).Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Despite the rapid increase in FDI flows to LICs, there have been relatively few studies that have specifically examined these flows. This paper attempts to partially fill the void by throwing light on one particularly dynamic aspect of global FDI-flows from Brazil, Russia, India and China (BRICs). The paper finds that official data sources undoubtedly underestimate the volume and scope of FDI flows as many small and medium-sized enterprises (SMEs) do not always register their investment. As a result, while it is difficult to estimate accurately the growth impact of BRIC FDI, there is case study evidence that it is increasingly significant. Second, while initial investment, mostly by state-owned companies, has often been destined for natural resource industries, over time, investment has been spreading to agriculture, manufacturing, and service industries (e.g., telecommunications). Third, FDI from BRICs flows into many non resource-rich countries in LICs and plays a significant role in growth in those countries.

Series:

Working Paper No. 11/178

Subject:

English

Publication Date:

July 1, 2011

ISBN/ISSN:

9781462311309/1018-5941

Stock No:

WPIEA2011178

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

31

Please address any questions about this title to publications@imf.org