Abstract
In the context of globalization, the increasing interconnection of markets and the geographical burst of the production chain can represent an opportunity for developing countries to join the world economy to enhance their growth. The resilience of foreign direct investment (FDI) during financial crises may lead those countries to consider it as the best sources of foreign capital flows and favor FDI over other inflows, following a trend that started many years ago. But, is this preference over other forms of private capital inflows justified? Their drastic growth over the past fifteen years revived the debate concerning potential gain and loses they can incur. How beneficial are actually FDI for developing countries? While there is substantial evidence that they benefit to host countries, potential impacts have to be carefully and realistically assessed.
