Some Alternative Catching Up Strategies for Developing Countries

Abstract

This paper identifies a couple recently very popular, alternative strategies for developing countries trying to catch up with rich countries. These include foreign direct investment in the forms of hosting multinationals’ offshoring activities and acquisition of internationally well-known brands through cross-border mergers. The logic behind these strategies is analyzed and some cases are studied. Possible side effects such as the widening of income inequality, environmental degradation and a lowering of labor standards are also examined. JEL Classification: F21, F23