Networking for foreign direct investment: the telecommunications industry and its effect on investment

It is increasingly recognized that the level and quality of infrastructure may have an important causal relationship with inflows of foreign direct investment (FDI). In recent literature, information infrastructure has been singled out as a potentially significant source of productivity increases and economic growth, in part through its role in attracting investment and increasing the returns to that investment. This paper examines the empirical relationship between FDI flows and the level of telecommunications infrastructure present in host countries, and finds preliminary evidence of a significant link. (C) 2003 Elsevier B.V. All rights reserved.