The SDG Effects of Inward FDI: How the Origin of Investors Shapes Societal Gains in Host Economies

Abstract Book of the 14th International Conference on Opportunities and Challenges in Management, Economics and Accounting

Year: 2026

[PDF]

The SDG Effects of Inward FDI: How the Origin of Investors Shapes Societal Gains in Host Economies

Francisco García Pérez, Robert Salomon

ABSTRACT:

Research on inward foreign direct investment (FDI) has to date documented substantial economic spillovers for host countries and their firms. Whether these effects extend to social and environmental progress of the economies receiving the investment remains, however, an open question. Positioning multinational enterprises (MNEs) as key actors in addressing grand societal challenges, this paper examines whether the contribution of inward FDI to host-country performance on the United Nations Sustainable Development Goals (SDGs) depends on the home country of the investors. We theorize that investment origin captures differences in, among others, regulatory standards, social values, business practices, and stakeholder expectations that condition both the magnitude and direction of social- and sustainability-related spillovers. Building on this theoretical rationale, we hypothesize that FDI coming from developed versus developing (or underdeveloped) economies may differentially affect SDG progress in host countries. By doing so, we address a relevant but, to the best of our knowledge, still unexplored boundary condition that may shape the effects of inward FDI on host country’s societal progress.

Keywords: FDI spillovers; Grand challenges; Investment origin; Inward FDI; Sustainable Development Goals