FOREIGN DIRECT INVESTMENT AND SUSTAINABLE DEVELOPMENT IN RESOURCE-DEPENDENT ECONOMIES: A SYSTEMATIC REVIEW OF THE LITERATURE

Abstract

The following research is contradictory with regard to the impact of FDI on sustainable development in resource-based economies. Mediators of such heterogeneity in economic, social, and environmental repercussions are summarized in crucial intermediary variables like the quality of institutions and the absorptive capacity of host countries. The present study is conducted in order to carry out a systematic synthesis of the existing academic research on the FDI-sustainable development nexus in order to identify knowledge gaps. Unlike quantitative studies, this paper uses a qualitative analytical methodology that is focused on a review and an analysis of peer-reviewed academic material and international organizations' documentation. The study concludes that the FDI-sustainable development nexus is not deterministic, rather it depends mostly on quality of institutions and governance in host country. The paper highlights three main gaps in knowledge: the relative underattention to the social dimension of urban development, the geographic bias toward certain regions and a lack of comparative sectorial analysis. The study gives primacy to the necessity of moving towards policies not only for attracting investments but also governing and orienting them strategically to meet national development purposes. It proposes a forward-looking research agenda that aims to concentrate on the social dimension, extend the geographical reach and carry out detailed sectoral analyses in order for these gaps to be overcome.