foreign direct investment The paper goes onto talk about the effect of geographical clusters and outward foreign direct investment also termed as Outward Direct Investment (ODI). The paper talks about what geographical clusters are, i.e., they are anomalies in terms of high incidence of a certain factor, element or activity in a geographical area. The paper talks about how clusters of highly productive areas can attract higher levels of FDIs and such clusters in a different country can push higher ODIs. ODIs are basically investments by domestic firms in foreign countries and is just the flip side of FDI in a certain way. An increase of FDIs due to highly productive clusters can fuel even higher productivity levels in that area thereby siphoning in more FDI and fuelling even more productivity. It also talks about how clusters can be termed as a firm specific advantage which goes beyond the conventional notion of, there being existing institutions that can fuel productivity rather than the productivity fuelling FDI inflow cycling back to productivity higher productivity levels. This paper goes onto show how important productivity is in terms of attracting FDIs and ODIs fora country and an area and how that affects productivity in turn.
Torfinn Harding and Beata SmarzynskaJavorcik (2011) Roll the red carpet and they
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