Over the past thirty years, foreign direct investment (FDI) growth has far outstripped output growth and trade growth. Over this period, policy makers in transition and developing countries have placed a great deal of emphasis in attracting FDI, expecting that FDI flows would bring new technologies, know-how and thus contribute to increasing competition and productivity of the domestic industry. FDI has also assumed an importance in the resource-constrained transition economies of central and Eastern Europe in their efforts to upgrade the existing infrastructure to assist the privatisation process initiated in the early 1990s. However, very little is understood about the extent to which host or home country institutions mitigate (or enhance) the effects of FDI on host countries. Despite some initial efforts, our knowledge about the impact that institutions can have in determining the beneficial effects of FDI (for example in terms of productivity growth or competition) remain rather unexplored. This proposal aims to fill in this gap of the literature.

Start date
30 March 2008
End date
29 June 2010
Grant holder
Professor Nigel Driffield
Professor Tomasz Mickiewicz
Dr Sarmistha Pal
Grant amount
Grant reference
Management & Business Studies
Management and Business Studies
Grant type