Pattern of foreign direct investment in developing economies: a comparative analysis of China and India

Abstract

Qualitative information and data show significant differences in the magnitude and type of foreign direct investment inflows among developing economies. An explanation of these differences requires an analysis of market institutional factors as well as an analysis of the supply and demand side conditions. This paper adopts the approach that different the configurations of supply and demand and that market institutional factors explain the type of investment flows into developing economies. The argument is illustrated through a comparative study of China and India.