Communications Networks and Foreign Direct: Investment in Developing Countries

Lydon, Reamonn and Williams, Mark (2005): Communications Networks and Foreign Direct: Investment in Developing Countries. Published in: International Journal of Digital Economics No. 58 (June 2005): pp. 43-60.

Abstract

It is widely accepted that investment is essential for the long-term economic growth of developing countries. There is some evidence that Foreign Direct Investment (FDI) in developing countries provides spill-over benefits through technology and skills transfer. Understanding the determinants of FDI inflows into developing countries is therefore an important policy objective. This paper shows that average FDI inflows into developing countries are greater in countries that have better telecommunications networks. In more recent years, this relationship can also be detected between FDI and mobile networks. The analysis has been refined to take account of countries' endowment of natural resources and the an attempt has been made to deal with the problem of endogeneity.

• Item Type: MPRA Paper
• Institution: Communications & Strategies
• Language: English
• Keywords: Africa; capital flows; foreign direct investment; investment risk; developing; countries and telecommunications
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; L - Industrial Organization > L4 - Antitrust Issues and Policies > L43 - Legal Monopolies and Regulation or Deregulation; L - Industrial Organization > L4 - Antitrust Issues and Policies > L41 - Monopolization ; Horizontal Anticompetitive Practices; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications