Abstract
The recent surge in FDI flows to developing countries has been attributed to liberalisation efforts. Using data on World Bank structural adjustment lending for a sample of developing countries, this study looks at the impact of the design and outcome of structural adjustment programs on multinational firms' investments. An important finding is that there are considerable changes before and after reforms regarding the characteristics which attract FDI, with an increased importance of the economic environment of host countries. While we find no convincing relationship between the results of reforms and an increase in FDI inflows, there is evidence that countries that undertook consecutive reform programs experienced higher growth in FDI.