This paper examines the interactions between Foreign Direct Investment (FDI), inequality, and growth, both from an empirical and a theoretical point of view. Using a panel of 119 developing countries, we observe that FDI promotes both inequality and growth, and tends to reduce the share of...

This paper examines the interactions between Foreign Direct Investment (FDI), inequality, and growth, both from a theoretical and an empirical point of view. We set up a growth model of a dual economy in which the traditional (agricultural) sector uses a diminishing returns technology, while FDI...