Although empirical literature offers rich insights on the relationship of FDI and economic growth, it provides mixed evidence on the existence of productivity externalities in the host country generated by foreign multinational companies. A branch of literature suggests that the positive impact...

Attracting FDI has become an integral part of the national development strategies in many economies, as it is generally believed that the benefits from foreign direct investment (FDI) outweigh its drawbacks. The UNCTAD in its World Investment Report (2006) highlights that there were 205 FDI...