This volume investigates whether Foreign Direct Investment (FDI) acts as a genuine mechanism for integrating the global economy by narrowing the gap in per capita incomes between nations. Ashoka Mody, a recognized authority in international economics, synthesizes current research to evaluate the impact of FDI on global development. He argues that while FDI flows are robust, they are primarily driven by favorable investment climates and herd behavior among investors rather than a systematic reduction in international income inequality. The text provides a critical framework for understanding the limitations of FDI as a tool for global economic convergence.

Experts identify this volume as a critical resource for international and development economists seeking to understand the limitations of capital flows. Readers frequently note the academic rigor and the clear, evidence-based approach Mody employs to challenge common assumptions about global economic integration.