Foreign Direct Investment and Multinational Firms in Developing Countries

Foreign Direct Investment and Multinational Firms in Developing Countries

Year: 2018-2019
Course code: ECON4014
Course credits: 15
Taught: Semester 2
Course co-ordinator: Dr Céline Azémar
Entry requirements: Normally admission to an honours programme in Economics.
Available to visiting students:Yes
Contact for more informationGillian Weir

Course description

The aim of this course is to provide students with an up-to-date knowledge on a major dimension of international economics: foreign direct investment (FDI).  The first part of the course defines FDI and multinational firms, and explains why firms become multinationals, and how the latter organise their production.  The second part of the course analyses the FDI attractiveness of host countries and investigates the potential positive and negative impacts of FDI in the host country and in the home country.  Since attracting FDI is considered a development priority by developing countries, as they wish to benefit from the growth opportunities that accompany these capital flows, this course also emphasises the key issues of FDI in developing countries.  By the end of this course, students should be able to: define FDI, and discuss measurement issues and trends; critically analyse why firms choose to serve foreign markets through FDI; discuss the organisational production of firms (outsourcing strategies); explain what the determinants of FDI are; analyse the potential impacts of FDI in host and home countries; and discuss the impact of incentives to attract FDI.

Learning and teaching methods

20 hours of lectures (10 x 2 hours) combining lectures and class discussion, Wednesday, 09.00-11:00

Course texts

Navaretti, G-B. and Venables, A.J. (2004). Multinational Firms in the World Economy, Princeton University Press.

The textbook Navaretti and Venables (2004) covers one-third of the course. For the remaining of the course,  various  journal articles will be suggested.  Please see the course page for the lecture schedule and the suggested reading lists.


An essay of 1500 words (30%)
A 2-hour degree exam (April/May) (70%)