Foreign Direct Investment, Trade in Services and Economic Growth: An Introduction
Foreign direct investment (FDI) is an important vehicle of technology transfer from developed countries to developing countries. At the same time, trade in services is not only important for its own sake, it also facilitates the efﬁ cient production of and trade in goods. Trade in services and FDI ﬂ ows may have a causal relationship to each other. In principle, causality can run in either or both directions, from FDI inﬂ ows to services trade and, conversely, from services trade to inward FDI. The impact of trade in services and FDI on economic growth and development has received prominence in the process of globalisation. However, the signiﬁ cance of the impact varies across countries depending on the level of human capital, structure and pattern of FDI and trade in services, its relation with domestic investment, infrastructure, economic stability and macroeconomic policies.