Abstract
With China’s reform and opening up, the relationship between foreign direct investment and economic development gradually attracts attention. Professor Dunning first developed this theory, which describes the division of net outward direct investment into four distinct stages of a country’s economic development, and later increased it to five. The theory has been developed for 40 years, and whether it can survive and still play a guiding role in national development is the focus of people’s concern. Based on the previous studies of scholars, this paper conducts an empirical study on “individual” countries. Thus it is concluded that the theory in its net foreign direct investment and economic development of the important relationship of the original is still valid, but from the cross section, the measures to be improved, and the theory of the fifth stage of the development of a new understanding
Highlights
According to IDP theory (Theory of Investment Development Path), the per capita GNP standards of each stage were reclassified and summarized in the above figure 1 with Dunning's theory.[i]
Among them, "(inverted) U-shape" can be fitted by quadratic function, but it is difficult to carry out empirical study in the first and fifth stages
Large multinational companies represented by the world's top 500 plan to increase their direct investment in emerging countries such as China, India, Brazil and Russia in the future
Summary
According to IDP theory (Theory of Investment Development Path), the per capita GNP standards of each stage were reclassified and summarized in the above figure 1 with Dunning's theory.[i]. The fourth and fifth stages present an "inverted U shape". Among them, "(inverted) U-shape" can be fitted by quadratic function, but it is difficult to carry out empirical study in the first and fifth stages. The empirical methods used below mainly include the quadratic model and the quintic model to fit the net foreign direct investment (NOIS) and per capita GNP (GNPPC). According to the fitting objects, the empirical analysis is divided into three parts: major developing countries, major developed countries
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