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Friday, April 07, 2006 


Foreign Direct Investment, Development and Gender Equity: A Review of Research and Policy

Author(s): Elissa Braunstein
Programme Area:
Special Events
Paper No.: 12
Code: OPGP 12
Project Title:
Policy Report on Gender and Development: 10 Years after Beijing
No. of Pages: 51

This paper provides a summary of the empirical and policy-related literature on the multifaceted relationships between gender inequalities and foreign direct investment (FDI). The literature on gender and FDI is evaluated with reference to the broader literature on FDI and economic development, new research directions are identified, and the policy implications of managing FDI for development and gender equity are discussed.

The empirical literature on the relationship between FDI and growth and development is surprisingly mixed. The paper reviews the research on the impact of FDI on investment, productivity, trade, employment, wages and working conditions, and finds few of the straightforward conclusions that the popularity of FDI as a tool for development would seem to indicate. However, despite a number of open questions and seeming contradictions, two consistent issues repeatedly arise. First, very little is understood about the dynamic impact of FDI. Even where positive correlations between FDI and investment, employment or wages appear, there is little analysis of whether and how the impact is sustained – to what extent (and how) FDI impacts the process and trajectory of development. Second, the research in which there does seem to be an emerging consensus is on the importance of the economic and policy context for FDI in determining its eventual impact.

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