The relationship between information and communication technologies and foreign direct investment at the different stages of investment development path

Abstract

Foreign Direct Investment (FDI) has grown exponentially in the recent past and has become one of the most important measures of globalisation. Today, Information and communication technologies (ICT) are viewed as one of the necessary conditions for the globalisation of business activities. ICT is also seen as a general purpose utility in many developed countries. Additionally, in many developing and so called emerging economies, there have been significant investments in ICT. Very recent studies show that the adoption and investment in ICT leads to economic growth and productivity gains at a macro-level. However, the link between ICT and FDI needs further exploration, especially in least developed and developing countries. This study aims to shed more light on internal factors that might explain the behaviour of FDI in emerging and developing economies and to understand if ICT capabilities of economies play a significant factor in foreign direct investments. The results from the study show that there is indeed a relationship between ICT and FDI in developing and developed countries; however, this relationship is not significant in least developed countries. Copyright