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.
