Title: Capability development and the geographic destination of outbound FDI by developing country firms

Authors: Helena Barnard

Addresses: Gordon Institute of Business Science, University of Pretoria, P.O. Box 787602, Sandton, 2146, South Africa

Abstract: This paper uses UNCTAD data to relate the destination of FDI from developing countries to their capability development. It expands the Investment Development Path (IDP) and the flying geese model to include the destination of outward FDI. Investments from developing into developed countries are predominantly in low and medium research-intensive (often considered |sunset|) industries where investors have established strengths in their home base. Developing countries play an active role in knowledge-intensive services in especially the developing world. Even though the developing-country knowledge-intensive firms are not global leaders, their intra-regional FDI enables capability development in emerging industries.

Keywords: outward FDI; developed countries; developing countries; low research intensity; knowledge-intensive services; investment development path; IDP; flying geese model; foreign direct investment; capability development; geographic destination; outward investment; sunset industries.

DOI: 10.1504/IJTG.2008.016186

International Journal of Technology and Globalisation, 2008 Vol.4 No.1, pp.39 - 55

Published online: 08 Dec 2007 *

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