The Rise of Foreign Direct Investment in the Telecommunications Services of Developing Countries

The Journal of World Investment & Trade, Vol. 5, No. 5, pp. 811-832, October 2004

38 Pages Posted: 1 Apr 2007 Last revised: 5 Sep 2009

See all articles by Kalman Kalotay

Kalman Kalotay

United Nations Conference on Trade and Development (UNCTAD); UNCTAD

Abstract

Since the early 1990s, foreign direct investment has assumed a leading role in the provision of telecommunications services in developing countries. Host countries, having perceived telecommunications services as the backbone of a modern service economy, have deregulated their telecommunications industries and implemented privatization programmes open to foreign investors. Transnational firms, looking for survival in global competition, have responded to that opening up, making telecommunications one of the fastest growing industries worldwide. Foreign direct investment in telecommunications has a robust impact on economic growth. It leads to increased access to, and better quality of, services but often at a cost of some social groups or areas being left off the map of accessibility. These problems require policy intervention. In the near future, foreign direct investment in telecommunications is expected to grow rapidly in many developing countries in which demand for services is unlikely to be met by domestic resources only.

Keywords: foreign direct investment, transnational corporations, telecommunications, developing countries, competitiveness

JEL Classification: L96, F21, F23, K23

Suggested Citation

Kalotay, Kalman, The Rise of Foreign Direct Investment in the Telecommunications Services of Developing Countries. The Journal of World Investment & Trade, Vol. 5, No. 5, pp. 811-832, October 2004. Available at SSRN: https://ssrn.com/abstract=977476

Kalman Kalotay (Contact Author)

United Nations Conference on Trade and Development (UNCTAD) ( email )

Division on Investment, Technology and Enterprise
Palais des Nations
Geneva, 1211
Switzerland

UNCTAD ( email )

Division on Investment, Technology and Enterprise
Palais des Nations
Geneva, 1211
Switzerland

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