When does foreign direct investment lead to inclusive growth?

Foreign direct investment (FDI) is widely considered among the most effective instruments for promotion of economic development. However, not all FDI leads to inclusive growth, lifting welfare poorest groups. This paper examines conditions under which can effectively lead growth. By using a fixed effects regression with annual data 67 countries from 1990 2015, we find that has positive effect on growth when there sufficiently large manufacturing sector and infrastructure base in host country. We also indirectly country service sector. These very optimistic results emphasise critical importance country's absorptive capacity. A smaller technological or knowledge gap foreign firms required more linkages spillovers ultimately job creation poor. The cast doubt development strategies rely as sufficient policy