The Growth of FDI in services and its implications

Foreign direct investment is increasingly shifting towards services. Service industries that, until recently, were largely national, are becoming transnational. All countries are affected by the rise of services FDI and the broad-based growth of service TNCs. What does this mean for the development prospects of host countries? FDI in services, as in manufacturing, has the potential to enhance, directly and indirectly, the efficiency, productivity and supply capacity of host-country industries, thereby benefiting the economy as a whole. But it can also entail risks and costs against which the benefits need to be weighed carefully.

Related Subject(s): International Trade and Finance
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