Revisiting economic geography and foreign direct investment in less developed regions

Abstract

This article focuses on the long-term effects of foreign direct investment (FDI) in less developed regions (LDRs). It identifies different types and mechanisms of FDI in more developed regions (MDRs) and LDRs, which lead to different regional development outcomes. It critically evaluates the most important approaches to FDI in LDRs developed in economic geography, namely the branch plant economy and truncation, new regionalism, new international division of labor and spatial divisions of labor, and global production networks. In the long run, FDI tends to benefit MDRs more than LDRs. The article calls on economic geographers to continue the research on FDI in the context of uneven development.