Foreign direct investment (FDI) in emerging-market economies has tripled since 2001, and wherever it has gone, it has spurred economic growth. As the cases of the formerly socialist economies of Russia, China, and India show, FDI or “enterprise capital” now appears to be far more effective in generating growth in developing countries than foreign aid, loans from multinational development agencies, or national economic-development efforts.

Roy C. Smith is the Kenneth Langone Professor of Finance Emeritus at New York University Stern School of Business.
Defense and Foreign PolicyEconomyForeign AidFree Market EconomicsGlobal FinanceInternational Economics and DevelopmentTrade
Other Independent Review articles by Roy C. Smith
Winter 2019/20 Will Populism Kill Globalization?
Summer 2018 China’s Next Ten Years
Fall 2016 Is China the Next Japan?
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