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Inward FDI in Israel and its policy context

Aharoni, Yair

In the first four decades of its existence, Israel was not successful in attracting inward foreign direct investment (IFDI) despite attempts to do so. In the past two decades, Israel have become a haven for multinational enterprises (MNEs) that have taken advantage of its unique assets -- among them a skilled, educated workforce and cutting-edge research-and-development (R&D) capabilities "“ by establishing production lines or R&D centers and acquiring dozens of successful start ups. Israel's IFDI stock sharply increased from US$ 4.5 billion in 1990 to US$ 71.3 billion in 2009. It is expected that IFDI will further accelerate following Israel's accession to the OECD in May 2010 and as more firms from emerging market economies, including China and India, will come to appreciate its characteristics as an ideal locational choice. Israel also weathered the global economic crisis well, even though IFDI declined sharply. Israel actively encourages IFDI, mainly in high technology areas. In 2010, the Government also created special incentives to attract research centers of financial institutions.

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Academic Units
Vale Columbia Center on Sustainable International Investment
Publisher
Vale Columbia Center on Sustainable International Investment
Series
Columbia FDI Profiles
Published Here
June 30, 2011
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