Trends and Determinants of Foreign Direct Investment in South Asia
Like many other developing countries, South Asian nations have been experiencing increased Foreign Direct Investment (FDI) inflows over the past decade as developing countries get a larger share of cross-border investments once sent to developed co...
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| Format: | Other Poverty Study |
| Language: | English en_US |
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Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2013/06/17939544/trends-determinants-foreign-direct-investment-south-asia http://hdl.handle.net/10986/16522 |
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okr-10986-165222021-04-23T14:03:31Z Trends and Determinants of Foreign Direct Investment in South Asia World Bank FDI FDI GROWTH FDI POLICIES FOREIGN DIRECT INVESTMENT INFLOWS INVESTMENT SECURITY POVERTY REDUCTION PRODUCTIVITY ENHANCEMENT TRANSPARENCY Like many other developing countries, South Asian nations have been experiencing increased Foreign Direct Investment (FDI) inflows over the past decade as developing countries get a larger share of cross-border investments once sent to developed countries. Nonetheless, South Asia's FDI inflows remain the lowest relative to Gross Domestic Product (GDP) among developing country regions. Over the next 20 years, more than one million new workers will be entering the South Asian labor market each month as the region's youth bulge matures and seeks employment. To absorb these workers and provide higher living standards and reduce poverty, South Asian countries will have to rely on more than just public investment. This report looks into the historical patterns of FDI in South Asia, examines its sectoral composition, and evaluates current policies and policy options that may help create an environment for increasing FDI flows. The launching point for this study is the substantial empirical literature that suggests that FDI is associated with growth, development, and productivity enhancement. The goal of the study is modest in that it does not seek to estimate the size of FDI spillovers on productivity growth, or address whether governments should actively subsidize FDI inflows over domestic investment as a means to enhance growth, but rather to understand whether the level of FDI flows as a share of GDP, its sectoral composition, and intra-regional flows are comparable to other developing regions and, if not, what might be some of the impediments to these flows. While FDI flows have increased over the past decade to South Asia, particularly from developed countries to South Asian service sectors, it has lagged in other sectors and remains relatively low overall. Overall, positive changes have taken place over the past few decades, while restrictions on FDI differ substantially among countries in South Asia. India's progress on FDI promoting policies has accelerated in recent years to make FDI policies more transparent, predictable, and simpler. Many other countries have also taken steps to improve transparency in regulations and reassure investors about the security of their investments in the country. Finally, the paper examines the determinants of FDI growth in South Asia. 2014-01-07T23:23:20Z 2014-01-07T23:23:20Z 2013-06-16 http://documents.worldbank.org/curated/en/2013/06/17939544/trends-determinants-foreign-direct-investment-south-asia http://hdl.handle.net/10986/16522 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC Economic & Sector Work :: Other Poverty Study Economic & Sector Work South Asia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
FDI FDI GROWTH FDI POLICIES FOREIGN DIRECT INVESTMENT INFLOWS INVESTMENT SECURITY POVERTY REDUCTION PRODUCTIVITY ENHANCEMENT TRANSPARENCY |
| spellingShingle |
FDI FDI GROWTH FDI POLICIES FOREIGN DIRECT INVESTMENT INFLOWS INVESTMENT SECURITY POVERTY REDUCTION PRODUCTIVITY ENHANCEMENT TRANSPARENCY World Bank Trends and Determinants of Foreign Direct Investment in South Asia |
| geographic_facet |
South Asia |
| description |
Like many other developing countries,
South Asian nations have been experiencing increased Foreign
Direct Investment (FDI) inflows over the past decade as
developing countries get a larger share of cross-border
investments once sent to developed countries. Nonetheless,
South Asia's FDI inflows remain the lowest relative to
Gross Domestic Product (GDP) among developing country
regions. Over the next 20 years, more than one million new
workers will be entering the South Asian labor market each
month as the region's youth bulge matures and seeks
employment. To absorb these workers and provide higher
living standards and reduce poverty, South Asian countries
will have to rely on more than just public investment. This
report looks into the historical patterns of FDI in South
Asia, examines its sectoral composition, and evaluates
current policies and policy options that may help create an
environment for increasing FDI flows. The launching point
for this study is the substantial empirical literature that
suggests that FDI is associated with growth, development,
and productivity enhancement. The goal of the study is
modest in that it does not seek to estimate the size of FDI
spillovers on productivity growth, or address whether
governments should actively subsidize FDI inflows over
domestic investment as a means to enhance growth, but rather
to understand whether the level of FDI flows as a share of
GDP, its sectoral composition, and intra-regional flows are
comparable to other developing regions and, if not, what
might be some of the impediments to these flows. While FDI
flows have increased over the past decade to South Asia,
particularly from developed countries to South Asian service
sectors, it has lagged in other sectors and remains
relatively low overall. Overall, positive changes have taken
place over the past few decades, while restrictions on FDI
differ substantially among countries in South Asia.
India's progress on FDI promoting policies has
accelerated in recent years to make FDI policies more
transparent, predictable, and simpler. Many other countries
have also taken steps to improve transparency in regulations
and reassure investors about the security of their
investments in the country. Finally, the paper examines the
determinants of FDI growth in South Asia. |
| format |
Economic & Sector Work :: Other Poverty Study |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Trends and Determinants of Foreign Direct Investment in South Asia |
| title_short |
Trends and Determinants of Foreign Direct Investment in South Asia |
| title_full |
Trends and Determinants of Foreign Direct Investment in South Asia |
| title_fullStr |
Trends and Determinants of Foreign Direct Investment in South Asia |
| title_full_unstemmed |
Trends and Determinants of Foreign Direct Investment in South Asia |
| title_sort |
trends and determinants of foreign direct investment in south asia |
| publisher |
Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2013/06/17939544/trends-determinants-foreign-direct-investment-south-asia http://hdl.handle.net/10986/16522 |
| _version_ |
1764434077625090048 |