ABSTRACT
This chapter makes the case for why a well-thought-through post-investment policy should be a key part of a comprehensive strategy of any investment promotion agency (IPA). The text starts by discussing well-established facts about the impact and importance of foreign direct investment (FDI) attraction, positive externalities and virtuous cycles of technological improvement, more and better jobs, and permanent increases in trade, all of which lead to economic growth and welfare improvement in local economies. Then, the chapter introduces post-investment support: all the types of support that are made available to foreign companies that are well-established in a country, as opposed to the assistance a company receives when it first lands in a new country. The rest of the chapter explains in detail the evolution of post-investment support in IPAs, in particular, the emphasis on attraction at the expense of retention and why this is an issue that must be addressed. The chapter closes by presenting the pillars of post-investment that help develop a virtuous relationship between the investor and the host economy, thereby maximising the benefit that host economies can obtain from FDI.
