Third, purely domestic UK firms reap positive spillovers from British multinationals but negative spillovers from foreign multinationals. This book tackles the question at different levels of aggregation: from broad cross-country level analysis to a more detailed firm level investigation. What is the effect of Foreign Direct Investment (FDI) on Economic Growth. My research reveals three key findings: First, the cross country investigations reveal that less developed countries with a highly skilled workforce have the greatest potential to attain positive growth effects from FDI. Second, the sectoral allocation of FDI matters for economic growth.