Recent research indicates that FDI is a compliment to rather than a substitute for
trade and that relationship is confirmed in this study. Countries that were more open to
trade before the start of the period were more likely to liberalize FDI during the decade in
question. That appears reasonable from a number of perspectives. First, trade openness
indicates a general predisposition to an economic openness, a belief that growth and
development are enhanced by linkages to world economy. Thus, trade openness should
be an indicator of a belief that FDI and TNCs are a net contributor to development