How Long Can USA Maintain their Dominance of The World Economy - In Terms of Inward & Outward FDI - Dissertation Example

FDI inward does intensify the local competition among the products and causes the availability of products to customers at cheaper rate with better quality. It also utilizes the under-utilized resources of country for example minerals, forests etc. Government of the country raises taxes from FDI. United States’ FDI inward in 2009 amounted to US$2.3 trillion and foreign firms in United States employ around 6.9 million people as in 2008 that is equivalent to 4.4% of US employment (D.H Rosen & Hanemann 2011 p 42).

Foreign investment outward is also at the core of modern economic model. Firms get resources and new market by investing in foreign markets and raise substantial profits that can be brought back into domestic economy benefitting its growth. United States accounts for largest FDI (both inward and outward) and dominate the world economy in FDI besides other variables of dominance of world economy. Impact of growing FDI on US dominance of world economy is what is debated commonly. FDI inward enables the foreign firms to control the market of country and there is no denying to the risk of exploitation in different ways.

Can US confront any such exploitation from foreign firms? Foreign firms can transfer important data and technology to their domestic country and can use it in their favor harming the country from which data and technology are transferred. Is US economy open to any such threat from its foreign investors? Foreign firms can also discriminate in job offerings and other perks between the workforce of the country and firms’ workforce from its own country. Does this happen or can it possibly happen in United States by foreign firms.

This dissertation will elaborate the above asked questions and will explore the impact, if. The intention of this study is the United States that abounds in the giant multinationals. It homes around 500 multinationals corporations (HRM practices in MNCs). Its technological growth, natural resources, educated masses and stable political environment has been the facilitating factors behind its economical growth. US has remained dominant over the world for past many decades consistently.US dominance of world economy is by no mean a miracle rather it traces back to around 230 years of commitment and effort.

US ability to better tape its natural resources, to achieve unprecedented heights in technological growth and to maintain a stable legal and political system are the major contributor to such a long period of dominance over the world economy. Sustainability of United States development has remained a major issue for many critiques mainly after the massive industrial development in the developing countries mainly Peoples Republic of China. A prominent economic historian, Naill Ferguson, said that US dominance is coming to an end and China is the emerging global leader.

Moreover, the recent financial crises and colossal trade deficit have intensified the concern on the possibility of United States dominance in the world economy in the future. United States of America is one of the three largest exporters of the world exporting machines industrial supplies and a very wide variety of consumer goods.