Developing country FDI and development: the case of the Chinese FDI in the Sudan

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This paper examines the development implications of Chinese
investment in the Sudan to enable a better understanding of the
impact of foreign direct investment (FDI) from developing countries.
By examining China’s early investment in the Sudan by the Chinese
National Oil Corporation (CNPC) and the consequent cascade effect
on the Sudan’s significant economic growth during the decade between
1997 and 2007, this paper highlights how progress was achieved through
interaction between Chinese FDI and host institutions. It demonstrates
that developing country FDI can make positive contributions to
development particularly in developing countries, due not only to its
capacity appropriate for developing countries, but also to its strategies
and mindset more adaptable to the development needs and institutional
environment in the host country. While extant research often emphasizes
how institutions make FDI’s impact on host countries differ and how
institutions in developing countries should be improved in order to
attract FDI, this research indicates that proactive adaptation of strategy
by transnational corporations (TNCs) to fit local needs and institutions
may be more effective for improving institutions and consequently the
development in host countries.
Original languageEnglish
Pages (from-to)49-80
Number of pages31
JournalTransnational Corporations
Issue number3
Publication statusPublished - Dec 2010


  • foreign direct investment (FDI), development, transnational

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