erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

FDI: The Toggle with Trade and Finance

Hosein Piranfar (Schiller International University)
Ali Shamsavari (Kingston University, UK)

Abstract

The rapid growth of FDI in developing countries during the late 1980s induced UNCTAD to praise FDI as the engine of growth in its1992 edition of World Investment. FDI has continued its rapid growth through the 1990s with a few exceptions, and even has pulled through the Asian Crisis. The beneficial role of productive FDI is beyond doubt. However, its inadequacies manifest in recent financial crises has not been fully explored due to FDI's fluid boundaries with portfolio investments and its close connection with international trade. The paper calls for a re-examination of the pure theory of international trade and investment.

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Middle East Technical University
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