Policy Briefs

Is Promoting Foreign Direct Investment Worthwhile? Learning from the East Asian Experience

By Dionisius NARJOKO

ERIA Policy Brief 2009-05

Posted: November 2009


East Asia presents a new model of industrialization that aggressively utilizes the dynamics of multinational corporations (MNCs). The model puts networks of production into practice, and such networks improve domestic capability and contribution to national output. Promoting foreign direct investment (FDI) is therefore warranted to ensure the sustainability of the production-network model. For this reason, FDI should always be promoted even when demand is less supportive, such as at this moment during the current global economic crisis.


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