Respuesta :
Low wages and low-cost land in developing countries will not attract foreign investment in manufacturing facilities if the developing countries lack well-developed infrastructure.
According to the system GMM estimations, the growth rates for energy and transportation infrastructure are 0.09 percent and 0.06 percent, respectively, for every 1 percent upgrade. Furthermore, FDI only promoted growth when it interacted with infrastructure. Infrastructure and FDI together increase economic growth by 0.016 percent.
The findings imply that public investment in economic infrastructure lowers the production costs for international companies, encouraging further domestic investment to support economic growth. The findings also imply that when a certain degree of economic infrastructure is present, the effect of FDI on the economy is maximized.
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