Research On FDI From Developing Countries, Patterns Of Development And Summary Of Methodology

Since 1990s, the development patterns of foreign direct investment (FDI) from developing countries have been much more diverse than before. At the same time, research in this field is fruitful following those changes in global economy. Because there is no general theory as a basis for different researchers, FDI theory contains too many branches in its framework, including classical economics, theory of the firm, economic history, management theory and others. These approaches have no common concepts and continuing research path. Restructuring of theory framework is important for the further research work on FDI from developing countries.In this dissertation, the emergence and evolution of FDI, the role of FDI in modern world economy will be discussed firstly, as a basis for futher study on integration of different views. The integral framework comprises essential advancements in FDI research field since 1960s. Those special characteristics and trends of today's FDI will be analized by empirical test.Usually transnational corporations (TNCs) from developing countries are smaller than their competitors from developed countries. Some TNCs are even small enterprises in their own nations. These FDI investors go abroad without any visible monopoly advantage. Methods of explaining behavior of these small TNCs are complex and conflicting with each other. The determinants of FDI of big business and small business are quite different, the former are monopoly advantages and the latter is segemental advantages. The competence or the advantage resource of small business from developing countries is heterogeneous. TNCs emerging from less developed areas have unique management skills overcome difficulties in local circumstances.Besides the classical economic theory of FDI (for exmaple, the product cycle model of Vernon, the stages-of-development approach of Tolentino), this dissertation applies the industry theory and resource-based approach for distinguishing TNCs from developing or developed nations. The growth and evolution of TNCs is revisited under new economic perspective. The emphasis of this article is trying to answer these quesitons: (1)Why should TNCs of less developing nations go abroad; (2)Which kind of TNCs can obtain competitive advantage successfully; (3)How can these advantages be sustained and advanced. The improvement of science and technology of parent countries give an impetus to FDI from developing entities.Construction of effective capital market and social regulation system is the keypoint of these questions. The review of Investment Development Path (IDP) focuses on the present IDP's position of China. Also the determinants of FDI from China are retested using new statistical data. Both empirical tests draw different conclusions from some known research works.