The foreign investments-growth nexus in underdeveloped countries: the state-of-art of research analysing a selected and recent empirical literature (2020-2022)

Abstract

Over the past few decades, foreign investments (FIs) have exerted a significant impact on the growth of both developed and underdeveloped countries. Although many studies have explored the FIs-growth nexus a state-of-art analysis is needed with reference to underdeveloped countries only.The article aims to analyse a selected and recent empirical literature from 2020 to 2022 relates to the FIs-growth nexus with evidence from developing and emerging economies, by providing indications on the state-of-art of research, as well as, by situating works to contribute to the analyses on this field and to be used by researchers, academics, and practitioners as a research agenda.By using a bibliometric approach based on the journal’s Impact Factor index over the previous two years (IF-2021), several research topic areas with the recent empirical studies have been discovered. Therefore, FIs are driven by: (i) economic efficiency, (ii) productivity and trade, (iii) sustainable development, (iv) Chinese economic expansionism. The analysis suggests that in underdeveloped countries the foreign investment effectiveness in stimulating growth mainly depends on the institutional and business environment of the host country. Sound governance and the technological gap emerge as the crucial drivers for development of countries, on which they should spend efforts and invest resources.