CHEN Jianxun, ZHAI Chunxiao:Investment Development Cycle: An Empirical Test and Extension on the Basis of Emerging Market Countries

Abstract：Foreign direct investment in emerging market countries is playing an increasingly important role in the world economy.However, research focusing on the investment development path of emerging markets is relatively rare.This paper challenges the investment development cycle theory, and adopts the emerging market countries samples to validate and expand the investment development cycle.Using 13 emerging market countries data from 1993 to 2012, this paper finds that emerging market countries are in the first three stages of the investment development cycle.Nevertheless, with regard to development trend, the inward and outward FDI in emerging market countries shows a U-shaped relationship while the net FDI shows an inverted U-shaped relationship.In the first three stages of investment development cycle, foreign investment of emerging market countries proceeds is ahead of their economic development level, which is different from what traditional theory of investment development cycle has revealed.This paper tries to make theoretical explanation.Finally, based on the research conclusion of this paper, we put forward relative policy suggestions and future research direction.

Key words： Emerging Market Countries    Investment Development Path Theory    International Direct Investment   GNP Per Capita

source:Finance & Trade Economics ,No.2,2015