CONCLUSION
The main objective of this paper was to find the volume and determinants of
FDI in developing countries. The analysis showed domestic investment,labour force, external debt and trade openness as the significant determinantsof the flow of FDI among the upper and lower middle-income countries andurbanization, market size, standard of living, inflation, current account
balance and wages for the lower income countries. In fact, the upper middle income group of the sample countries has received higher flow of FDI than other groups by virtue of its comparatively better internal and external balances, high level of CGDP, DI, trade openness and large market size. Incontrast, the countries belonging to the lower income group received the lower FDI inflows than other groups during the selected period mainly because of large deficit in current account, lower wages, low level of GDP
and standard of living. The message of the analysis is that the countries interested in attracting increasing flow of FDI on a sustained basis must adopt suitable policies. The government in these countries should provide incentives and undertake efforts for greater trade openness, higher domestic investment and low debt. Further, effective steps should also be taken to reduce the internal as well asexternal imbalances. Last but not the least, there seems to be no substitute for improved political environment to attract FDI.