May 18, 2022
Foreign direct investment (FDI) plays an important role in economies as it extends local economies the capital, skills, know-how, and innovation required to stay competitive in the global market. FDI that is channeled through global value chains offers even more potential in transforming developing economies into manufacturing-oriented centers. In this note, based on a policy brief on FDI and global value chains (GVCs) supported by the Hinrich Foundation, we focus on three economies – China, Indonesia, and Viet Nam – which exemplify the link between FDI inflows, participation of developing economies in GVCs, and the consequent economic upgrading that such participation in GVCs promotes.