We review a large body of literature dealing with the effects of Foreign Direct Investment(FDI) on economies during their transformation from a command economic systemtoward a market system. We report the results of a meta-analysis based on the literatureon externalities from FDI. The studies on...

In Africa’s least developed countries (LDCs), escape from poverty and convergence to livingstandards of more advanced economies depends critically on structural transformation and theemergence of productive entrepreneurship that would accelerate growth and job creation. So far,however,...

The principal argument for subsidizing foreign investment, especially in developing andtransition economies, is the assumed spillover of technology to local firms. Yet researchersreport mixed results on spillovers. To examine the phenomenon in a systematic way, wecollected 3,626 estimates from...

Does FDI affect productivity growth, innovation, and knowledge sourcing activities ofdomestic firms? This study employs detailed firm-level panel-data from Estonia’smanufacturing sector to investigate different channels through which FDI can affectdomestic firms. I use instrumental variables...

We extend agency theory to propose that structural reform positively impacts firm profitability indeveloping countries because the improvements in external monitoring that accompany structuralreform decrease the agency costs faced by firms. However, we also argue that not all firmsbenefit...