Global institutional pressure and local receptivity to CSR
Institutional pressure and …show more content…
A corporate investment in healthcare could drastically reduce infant mortality rate, average life expectancy, just to mention a few. Furthermore, a corporate investment in education can increase the level of illiteracy which in the long run reduce the level of poverty in the country. Needless to say, FDI can contribute to the reduction in poverty. Given the increase importance of FDI as a source of capital for development in developing countries " (Jenkins R. n.d), and the emphasis of development agencies on poverty reduction as a prominent goal" the need for more study into the correlation between poverty and the direct impact of foreign direct investment on poverty reduction needs to be exploited.
FDI and growth
A study conducted by a Laura Alfaro of the Harvard Business school finds that
FDI flows into the different sectors of the economy (namely primary, manufacturing, and services) exert different effects on economic growth. FDI inflows into the primary sector tend to have a negative effect on growth, whereas FDI inflows in the manufacturing sector a positive one (Alfaro, L.,