Qualitative information and data show significant differences in the magnitude and type of foreign
direct investment inflows among developing economies. Explanation of the differences requires
analysis of market institutional factors as well as the supply and demand side conditions. This paper
adopts the approach that different configurations of supply, demand and market institutional factors
explain the type of investment flows into developing economies. The argument is illustrated through
a comparative study of China and India.
Key Words: Developing Economies; Foreign Direct Investment; China, and India
JEL Classification: F23, P52