Integration into the production and marketing arrangements of multinational corporations may offer many benefits to transition economies that, after a long period of isolation, have liberalized trade and investment. The fragmentation of production offers a unique opportunity for producers in developing countries to move from servicing small local markets to supplying large firms abroad and, indirectly, their customers all over the world.

Integration into the production and marketing arrangements of multinational corporations may offer many benefits to transition economies that, after a long period of isolation, have liberalized trade and investment. The fragmentation of production offers a unique opportunity for producers in developing countries to move from servicing small local markets to supplying large firms abroad and, indirectly, their customers all over the world.Not until the end of the twentieth century, the quot;second globalization,quot; has the ratio of trade to GDP been comparable to that during the first globalization, which took place at the end of the nineteenth century and was interrupted by World War I. Technological progress has increased the importance of the international division of labor and of global production and distribution networks. Multinational corporations have been a driving force behind these developments. As a transition economy, Poland provides an interesting case for study, as its sudden opening to foreign investment after a long period of isolation allows the process of integration into global networks to be studied more clearly.Using Poland as a case study, Kaminski and Smarzynska study multinational corporations' role in integrating a host country into the increasingly international division of labor. They provide evidence that inflows of foreign direct investment are increasing Poland's participation in global production and distribution networks. They conclude that because of the large volume of foreign direct investment inflows expected in Poland in the near future, Poland's exports - driven by fragmented production - will continue to expand at even faster rates than observed there recently.This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study the effects of foreign direct investment on economic activity.

In 2010, the Latin American and Caribbean region showed great resilience to the international financial crisis and became the world region with the fastest-growing flows of both inward and outward foreign direct investment (FDI). The upswing in FDI in the region has occurred in a context in which developing countries in general have taken on a greater share in both inward and outward FDI flows. This briefing paper is divided into five sections. The first offers a regional overview of FDI in 2010. The second examines FDI trends in Central America, Panama and the Dominican Republic. The third describes the presence China is beginning to build up as an investor in the region. Lastly, the fourth and fifth sections analyze the main foreign investments and business strategies in the telecommunications and software sectors, respectively.

This book presents the results of a groundbreaking study on ‘spillovers’ of knowledge and technology from global value-chain oriented foreign direct investment (FDI) in Sub-Saharan Africa, and discusses implications for policymakers hoping to harness the power of FDI for economic development.

Macro statistics on foreign direct investment (FDI) are blurred by offshore centers with enormous inward and outward investment positions. This paper uses several new data sources, both macro and micro, to estimate the global FDI network while disentangling real investment and phantom investment and allocating real investment to ultimate investor economies. We find that phantom investment into corporate shells with no substance and no real links to the local economy may account for almost 40 percent of global FDI. Ignoring phantom investment and allocating real investment to ultimate investors increases the explanatory power of standard gravity variables by around 25 percent.

This document examines the global and regional evolution of Foreign Direct Investment (FDI) and offers recommendations so these flows can contribute to the region's productive development processes.