Foreign direct investment, local development and poverty reduction: the sustainability of the salmon industry in Southern Chile

Abstract

The rate of Foreign Direct Investment (FDI) has risen dramatically during the past three decades; developing countries’ inward stock of FDI amounted to about 30 per cent of their GDP in 2009, compared to just 12 per cent in 1980 (UNCTAD 2011). This has led to a great deal of optimism that FDI can provide a potential for economic development and poverty reduction. However, this potential depends on how FDI interacts with the environment in which the investments take place (Lall and Narula 2004, Moran et al. 2005). To discuss these types of interaction, we propose an analytical framework approaching FDI as consisting of capital, actors and knowledge, or what we call the capital–actor–knowledge complex.