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Foreign direct investment and economic development: Opportunities and limitations from a developing country perspective

This paper analyses the benefits for acquiring countries of transfers of technology through foreign direct investment (FDI). This paper focuses on the conditions (or their absence) under which the impact of FDI for economic and technological development are most beneficial for acquiring economies.

The authors assert that FDI does not necessarily have a positive impact on economic development and productivity growth. This is due to the fact that acquiring countries cannot draw on the largest part of the benefits deriving from FDI in the absence of a certain level of domestic absorptive capacities.