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Evaluating Investement Projects in the Presence of Sectoral Linkages, Economics of Transition

Abstract

In this paper we develop a framework to assess the economic impact of foreign investment projects. If investment projects interact with other industries in the host economy, either by buying inputs locally or by selling their own product to local downstream firms, they can create sectoral linkages. The expansion of upstream and downstream industries can feed back to the project's own industry leading to a further expansion of the local industry. We study the circumstances under which investment projects lead to the creation of sectoral linkages and characterise the factors that determine the project's welfare impact. We link analytical findings to case studies undertaken for the EBRD.

Type

Article

Author(s)

Niko Matouschek, Tony Venables

Date Published

2005

Citations

Matouschek, Niko, and Tony Venables. 2005. Evaluating Investement Projects in the Presence of Sectoral Linkages. Economics of Transition. 13(4): 573-603.

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