The increasing competition between governments to attract foreign direct investment (FDI) can be attributed to their prominent role in promoting knowledge-sharing, innovation and growth. The fact that Italy has always been a laggard in such initiatives has further blemished the country’s attractiveness to foreign investors. Based on the past experience of other nations and on the conceptual models advanced in the latest international literature, the paper suggests a design framework for general guidelines that may be of use to policymakers in formulating an effective policy to encourage FDI. The framework combines principles based on the country-specific competitive advantages and opportunities generated by international investments. Specifically, the paper identifies several policy measures and discusses their optimal mix with reference to the case of Italy.
Keywords: Multinationals, foreign direct investments, FDI attraction policy
Jel Code: F23, H76, O19