FDI from BRICs to LICs: Emerging Growth Driver?

 
Author/Editor: Mlachila, Montfort ; Takebe, Misa
 
Publication Date: July 01, 2011
 
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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(s): Foreign investment | Capital inflows | Low-income developing countries | Angola | Brazil | China, People's Republic of | India | Liberia | Russian Federation | Sudan | Zambia

Author's Keyword(s): FDI | BRICs | low-income countries
 
English
Publication Date: July 01, 2011
Format: Paper
Stock No: WPIEA2011178 Pages: 31
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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