Publication:
Does a Country Need a Promotion Agency to Attract Foreign Direct Investment : A Small Analytical Model Applied to 58 Countries

dc.contributor.author Morisset, Jacques
dc.date.accessioned 2014-05-09T19:55:08Z
dc.date.available 2014-05-09T19:55:08Z
dc.date.issued 2003-04
dc.description.abstract Establishing an investment promotion agency has become a central part of most countries' development strategies. Today there are more than 150 investment promotion agencies worldwide. Yet very little is known about what these agencies have been really doing, notably in emerging countries, and whether they have been effective in influencing investors' decisions. Using data from a new survey on 58 countries, Morisset shows that greater investment promotion is associated with higher cross-country foreign direct investment (FDI) flows, on top of the influence of the country's investment climate and market size. But this result has to be qualified on several counts. First, the effectiveness of the agency depends on the country's environment in which it operates. An agency in a poor investment climate is less effective at attracting investment. Second, the scope of activities that an agency undertakes influences its performance. Morisset's empirical analysis indicates that agencies devoting more resources on policy advocacy are more effective because such activity is not only beneficial to foreign investors but also to domestic investors. In contrast, investment generation or targeting strategies appear expensive and risky, especially in countries with poor investment climates. Finally, certain internal characteristics of the agencies are associated with greater effectiveness. The agencies that have established reporting mechanisms to the country's highest policymakers (the president or prime minister) or to the private sector have been systematically more efficient at attracting foreign direct investment. Such institutional links are crucial because they contribute to strengthen the government's commitment as well as reinforce the agency's credibility and visibility in the business community. en
dc.identifier http://documents.worldbank.org/curated/en/2003/04/2329622/country-need-promotion-agency-attract-foreign-direct-investment-small-analytical-model-applied-58-countries
dc.identifier.uri http://hdl.handle.net/10986/18230
dc.language English
dc.language.iso en_US
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 3028
dc.rights CC BY 3.0 IGO
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject CONCEPTUAL FRAMEWORK
dc.subject CONDITIONALITY
dc.subject DEBT
dc.subject DEVELOPMENT STRATEGIES
dc.subject DIMINISHING MARGINAL UTILITY
dc.subject ECONOMIC DEVELOPMENT
dc.subject ECONOMIES OF SCALE
dc.subject ELASTICITY
dc.subject EMPIRICAL ANALYSIS
dc.subject EQUILIBRIUM
dc.subject EXCHANGE RATE
dc.subject EXPENDITURES
dc.subject EXPORTS
dc.subject FDI
dc.subject FIXED COSTS
dc.subject FOREIGN DIRECT INVESTMENT
dc.subject FOREIGN INVESTMENT
dc.subject FOREIGN INVESTORS
dc.subject FUTURE RESEARCH
dc.subject GDP
dc.subject GDP PER CAPITA
dc.subject GENERAL EQUILIBRIUM MODEL
dc.subject GOOD INVESTMENT CLIMATE
dc.subject HOST COUNTRY
dc.subject INCOME
dc.subject INDUSTRIAL COUNTRIES
dc.subject INTERNATIONAL INVESTMENT
dc.subject INTERNATIONAL INVESTORS
dc.subject INVENTORIES
dc.subject INVESTMENT CLIMATE
dc.subject INVESTMENT DECISIONS
dc.subject INVESTMENT PROMOTION
dc.subject INVESTMENT PROMOTION AGENCIES
dc.subject INVESTMENT PROMOTION AGENCY
dc.subject IPA
dc.subject IPAS
dc.subject LABOR COSTS
dc.subject LDCS
dc.subject MACROECONOMIC CONDITIONS
dc.subject MARKET SIZE
dc.subject MERGERS
dc.subject MIDDLE INCOME COUNTRIES
dc.subject POLICY ENVIRONMENT
dc.subject POLICY MAKERS
dc.subject POTENTIAL INVESTORS
dc.subject PRIVATE SECTOR
dc.subject PRODUCTIVITY
dc.subject PRODUCTIVITY GROWTH
dc.subject PROGRAMS
dc.subject PUBLIC GOOD
dc.subject REGRESSION ANALYSIS
dc.subject TAXATION
dc.subject TECHNOLOGY TRANSFERS
dc.subject UNEMPLOYMENT
dc.subject UTILITY FUNCTION FOREIGN DIRECT INVESTMENTS
dc.subject INVESTMENT PROMOTION
dc.subject BUSINESS ENVIRONMENT
dc.subject INVESTMENT ENVIRONMENT
dc.subject DOMESTIC INVESTMENT
dc.subject GOVERNMENT COMMITMENTS
dc.subject UTILITY FUNCTION
dc.title Does a Country Need a Promotion Agency to Attract Foreign Direct Investment : A Small Analytical Model Applied to 58 Countries en
dspace.entity.type Publication
okr.doctype Publications & Research :: Policy Research Working Paper
okr.doctype Publications & Research
okr.docurl http://documents.worldbank.org/curated/en/2003/04/2329622/country-need-promotion-agency-attract-foreign-direct-investment-small-analytical-model-applied-58-countries
okr.globalpractice Transport and ICT
okr.globalpractice Governance
okr.globalpractice Trade and Competitiveness
okr.identifier.doi 10.1596/1813-9450-3028
okr.identifier.externaldocumentum 000094946_03051404103335
okr.identifier.internaldocumentum 2329622
okr.identifier.report WPS3028
okr.language.supported en
okr.pdfurl http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2003/05/23/000094946_03051404103335/Rendered/PDF/multi0page.pdf en
okr.topic International Economics and Trade :: Foreign Direct Investment
okr.topic Economic Theory and Research
okr.topic International Terrorism and Counterterrorism
okr.topic Public Sector Development :: Decentralization
okr.topic Environmental Economics and Policies
okr.topic Payment Systems and Infrastructure
okr.topic Information and Communication Technologies :: ICT Policy and Strategies
okr.unit Foreign Investment Advisory Service
okr.volume 1
relation.isSeriesOfPublication 26e071dc-b0bf-409c-b982-df2970295c87
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