Postgraduate taught 

Economic Development (with Finance & Policy Pathways) MSc

Foreign Direct Investment And Development ECON5013

  • Academic Session: 2021-22
  • School: Adam Smith Business School
  • Credits: 20
  • Level: Level 5 (SCQF level 11)
  • Typically Offered: Semester 1
  • Available to Visiting Students: No
  • Available to Erasmus Students: No

Short Description

Foreign direct investment (FDI) has been among the fastest growing economic activities around the world. In parallel, over the past two decades, attracting FDI has been considered a development priority by developing countries as they wish to benefit from the growth opportunities that accompany these capital flows.


One 2-hour lecture each week for 10 weeks.

Excluded Courses





■ Coursework: essay (25% of final grade for course)

■ Examination: two-hour end-of-course examination (75% of final grade for course).

Main Assessment In: December

Course Aims

The aims of this course are:

■ to review the theories and empirical analyses that explain FDI and their impacts on economic development.

■ to provide students with an up-to-date knowledge on FDI and their key issues for developing countries.

Intended Learning Outcomes of Course

By the end of the course, students should be able to:

■ Define FDI, discuss their measures, and analyse their trends.

■ Critically analyze why firms choose to serve foreign market through FDI.

■ Discuss the organisational production of firms (sourcing strategies).

■ Explain what are the determinants of FDI by distinguishing their motives (vertical versus horizontal FDI), their ownership structure (joint-venture versus wholly-owned ventures), and their location (developing versus developed countries).

■ Analyse the impacts of FDI in developing countries in terms of growth, technology transfer, job creation, financial volatility, tax evasion.

■ Discuss the impact of incentives to attract FDI, and more specifically, mitigate the effects of fiscal incentives on FDI in developing countries.

Minimum Requirement for Award of Credits

Students must submit at least 75% by weight of the components (including examinations) of the course's summative assessment.