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This paper analyzes the forward linkages of a multinational's investment in a resort that kicks off tourism activity in a less developed country. We show that, under quite natural assumptions, overnight stays are increasing in the number of differentiated tourism-related goods and services. These goods and services, if supplied by the local community, represent forward linkages of FDI in tourism. We investigate the multinational's incentives to promote, reduce or eliminate these forward linkages and the effectiveness of some policy instruments available to a local government to leverage on the presence of FDI and to stimulate domestic entrepreneurship. [ABSTRACT FROM AUTHOR]

The authors attempt to highlight the effects of the recent surge of FDI in the enlargement states on domestic investment and growth. A similar analysis is carried out for the EU-15 in order to ascertain whether this type of capital inflow has a differential impact in these two regions of the European Union. Empirical analysis, based on dynamic panel data models, suggests the existence of a positive contribution of FDI to greater domestic investment and economic growth in the new member states. The evidence obtained for the EU-15 old member countries confirms the FDI-growth nexus but does not suggest a positive impact of FDI on domestic investment, which would be consistent with these capital inflows being of a different nature for these more advanced economies. [ABSTRACT FROM AUTHOR]

Investigates the relationship between foreign direct investment and economic growth in China. Transfer of foreign technology as a key determinant of economic growth; Influence of economic growth on the inflows of foreign capital; Use of simultaneous-equation model based on a sample of Chinese provinces from 1985 to 1996.