FOREIGN DIRECT INVESTMENT INCENTIVES
FOREIGN DIRECT INVESTMENT INCENTIVES

Summary/Abstract: The aim of this paper is to examine whether international investment incentives can be justified on the host country effects of foreign direct investments. In particular, we discuss whether the externalities from the operations of foreign multinational corporations are strong and systematic enough to justify subsidizing foreign investment with various fiscal and financial incentives. We also discuss some alternative policy measures available for governments to benefit from inward foreign investment Based on the current knowledge of spillovers, we try to see whether investment incentives can be justified or not, and discusses the design of incentive policies.

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