Competition Policy and FDI: A Solution in Search of a Problem?

This paper reviews a variety of documentary evidence to find evidence of the impact of private practices in discouraging inward foreign direct investment (FDI). Outside of a few countries, there is little documentary evidence that this is indeed a problem. Sectoral data on inward FDI from the United States and Japan are then analyzed econometrically. The regression results reinforce the impression gleaned from the document review: barriers to FDI are more likely to take the form of general economic conditions or specific policies facilitated by private practices than systematic aspects of industrial structure.