Internationalization of enterprises is an essential way for strengthening the competitiveness of developing country firms. Outward foreign direct investment (OFDI) is an important aspect of enterprise internationalization.
The rise in outward foreign direct investment from developing countries and economies in transition is an interesting phenomenon. It is not only large enterprises from developing countries that are investing abroad; SMEs are also doing so, to strengthen their competitiveness. These enterprises are investing abroad for various economic and corporate-specific reasons that can differ by nationality of firms, industry (manufacturing vs. services), size (large vs. SMEs) and types of OFDI (market-seeking vs. resource-seeking). Increasing cost, competition and saturated markets at home are among the key drivers of OFDI from developing countries. In addition, the need to enhance corporate competitiveness by accessing markets, technologies, brand names and natural resources and the desire to increase overall efficiency have motivated developing country enterprises to go abroad. Improvements in the OFDI policy environment and encouragement by home Governments have also played an important role in the process.
More countries are now paying closer attention to addressing their enterprise competitiveness through OFDI and are in turn becoming a growing source of FDI for other developing countries, thus strengthening South-South cooperation. In going abroad, developing country enterprises, large and small, face a number of key challenges. These challenges need to be addressed if developing country Governments want to use OFDI to enhance competitiveness of their enterprises through this means of internationalization.
The Expert Meeting is expected to bring together high-level experts from the public and private sectors, as well as academia and international organizations, to examine the above OFDI issues (trends, drivers, obstacles, best practices and impact), including identifying what policies and actions can be taken by Governments, the private sector and the international community to improve the competitiveness of developing country enterprises, especially SMEs, through the OFDI process.
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