Abstract

In the emerging debate on improving the institutional framework and reviewing the role of public intervention in advanced industrialized economies, foreign investment screening mechanisms represent one of the few areas characterised by significant changes. Several countries have implemented or enhanced screening regimes for foreign investment, including in reaction to the economic upheaval resulting from the ongoing Covid-19 pandemic. Basing on the literature on the economics of foreign direct investment, this article examines the evolution of foreign investment screening policies with the aim of bringing out the relevant relations with industrial policies. In a context of trade openness, investment policies and the related exercise of special powers should revolve around a clearly articulated industrial policy in supporting those activities deemed strategic as they are able to preserve and develop the ability of a country to generate value.