Purpose: The author would like to thank all researchers and institutions whose empirical studies and theoretical contributions have shaped the understanding of FDI determinants in developing countries. Appreciation is also extended to the academic databases and journal publishers that provided open access to critical literature.

Research methodology: This study employs a qualitative analytical approach grounded in an extensive review of empirical and theoretical literature on foreign direct investment (FDI), with a focus on the OLI paradigm and the Knowledge-Capital Model. Data were drawn from 40 peer-reviewed articles published between 2020 and 2024, selected from reputable academic databases using targeted keywords related to FDI determinants. Thematic analysis was conducted to identify key variables such as market size, institutional quality, and infrastructure, highlighting regional patterns and sectoral distinctions.

Results: The OLI paradigm remains a key framework for understanding FDI, with recent studies showing that host-country factors such as market size, GDP growth, and skilled labor availability play crucial roles in attracting investment. While low labor costs can drive FDI in manufacturing, high-tech sectors prioritize productivity and human capital. Tax incentives and natural resources can also influence FDI, but their effectiveness depends on broader institutional and regulatory conditions. Additionally, strong intellectual property rights are essential for securing investment in innovation-driven industries.

Conclusions: In developing countries, FDI determinants have shifted from reliance on natural resources and low-skilled labor to a greater emphasis on skilled labor, digital infrastructure, and institutional quality. To attract high-value FDI, scholars emphasize the need for a balanced strategy that includes improving education systems, advancing digital readiness, and fostering innovation ecosystems.

Limitations: This study is limited by its reliance on secondary data and qualitative analysis, which may not fully capture dynamic, country-specific investment behaviors.

Contribution: The study contributes to FDI literature by synthesizing recent empirical findings to highlight the evolving importance of institutional quality, digital infrastructure, and human capital in developing countries.