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Foreign direct investment and economic growth in developing countries

With 189 member foreign direct investment and economic growth in developing countries, staff from more 170 countries, and offices in over 130 locations, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries. The World Bank Group works in every major area of development. We provide a wide array of financial products and technical assistance, and we help countries share and apply innovative knowledge and solutions to the challenges they face. We face big challenges to help the world’s poorest people and ensure that everyone sees benefits from economic growth.

Data and research help us understand these challenges and set priorities, share knowledge of what works, and measure progress. The World Bank Group surveyed hundreds of executives at multinational companies to find out what drives decisions around foreign direct investment. The results show that investors value a business-friendly regulatory environment as well as stable macroeconomic and political conditions. Story Highlights Investor survey of multinational corporations shows that political stability, security, and regulatory environment are leading factors driving decisions to invest in developing countries. 40 percent and 20 percent respectively. Policies and actions by developing country governments play a key role in ensuring that FDI creates better-paying jobs and increases competitiveness of the host economies. VIENNA, Austria, October 25, 2017—Reducing risk in developing countries is key to spurring investment and growth.

The question examined in the report is when and under what circumstances are these benefits of FDI most likely to occur. 2018, launched today at an international investment forum, combines a survey of 750 multinational investors and corporate executives with detailed analysis and recommendations concerning FDI in developing countries. The analysis examines the ability of developing countries not only to attract private investment but to retain and leverage it for inclusive and sustainable growth. A country’s investment competitiveness goes beyond attracting FDI. It is determined by the country’s ability to bring in, retain, and leverage private investment for inclusive and sustainable economic growth.