Are there benefits to the host country from multinational investments? Does potential value from these investments make active industrial policy worthwhile? We answer the first question affirmatively, having reviewed economic principles and evidence concerning the effects of projects locating in...

Foreign Direct Investment (FDI) can benefit host countries by facilitating access to sophisticated technologies, good management and global value chains. However, multinational firms have many alternative locations from which to choose. As a consequence, countries trying to attract inflows of...