WTO Regime, Host Country Policies and Global Patterns of MNE Activity

While in general it is admitted that host governments' policies may play an important role in extracting the benefits of FDI for development, a more exact analysis of the relative role of different policy measures in shaping the magnitudes and quality of FDI inflows is not available. Such an analysis has become even more important now in the context of the new international trading regime under the aegis of the WTO which covers issues which have an important bearing on the ability of national governments in regulating the patterns of FDI inflows. This paper presents some findings of a comprehensive attempt to quantitatively analyse the role of structural, geographical and policy factors in shaping the patterns of MNE activity. The focus is on the role of host government policies and on the implications of the emerging WTO regime in their light.