Given the important role of multinational enterprises (MNEs), attracting foreign direct investment is a key concern for countries keen to join value chains. This paper explains why increasing the foreign services share of gross exports, implementing trade facilitation measures and signing on to deep trade agreements, particularly with neighbouring countries, can be beneficial. It also highlights some practical constraints that MNEs face in host countries with respect to limited access to foreign exchange, infrastructure and on-the-ground services gaps and corruption. Local firms and SMEs also suffer as a result of corruption, complex processes and poor infrastructure.
This paper is part of the Global Value Chain Policy Series.