Evaluating investment projects in the presence of sectoral linkages

Niko Matouschek*, Anthony J. Venables

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Scopus citations


In this paper we develop a framework to assess the economic impact of foreign investment projects. If investment projects interact with other industries in the host economy, either by buying inputs locally or by selling their own product to local downstream firms, they can create sectoral linkages. The expansion of upstream and downstream industries can feed back to the project's own industry leading to a further expansion of the local industry. We study the circumstances under which investment projects lead to the creation of sectoral linkages and characterize the factors that determine the project's welfare impact. We link analytical findings to case studies undertaken for the EBRD.

Original languageEnglish (US)
Pages (from-to)573-603
Number of pages31
JournalEconomics of Transition
Issue number4
StatePublished - Oct 2005


  • Economic development
  • Foreign investment projects
  • Sectoral linkages

ASJC Scopus subject areas

  • Economics and Econometrics


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