We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

The Influence of Foreign Direct Investment (FDI) on the Economic Growth of the Host Economies - Essay Example

Comments (1) Cite this document
Summary
This paper talks about complex relationship between foreign direct investment and economic growth in the host country. This relationship is not as unambiguous as it is believed to be. Positive effects of FDI on economic growth are often taken for granted. In reality this relationship is not simple…
Download full paperFile format: .doc, available for editing
Polish This Essay97.2% of users find it useful
The Influence of Foreign Direct Investment (FDI) on the Economic Growth of the Host Economies
Read TextPreview

Extract of sample
"The Influence of Foreign Direct Investment (FDI) on the Economic Growth of the Host Economies"

Download file to see previous pages ects of FDI on economic growth in host countries greatly depend upon the local conditions and contexts of doing business there: for example, human capital enhances the positive effects of FDI on host economies, while the existing technology gaps make it possible to implement even the simplest foreign direct investment reforms (Wang, Gu, Tse & Yim, 2012). Added to this is the role which market size plays in attracting FDI to host countries, whereas technology-absorptive abilities predetermine host returns from FDI (Li & Liu 2005; Blalock & Gertner 2008). These results have far-reaching implications for policy development and implementation, although all risks and factors changing the nature of FDI inflows to host countries need to be thoroughly considered. Even more interesting are the results of another study conducted in the three major countries-recipients of FDI. These include Malaysia, Chile, and Thailand (Chowdury & Mavrotas 2007). Again, the researchers confirm that the effects of FDI on economic growth are very heterogeneous and primarily depend upon the level of GDP in host countries (Chowdury & Mavrotas 2007). At least in Thailand and Malaysia, the relationship between GDP and FDI is very explicit (Chowdury & Mavrotas 2007). Again, these findings have far-reaching implications for policymaking, since understanding causality between FDI and economic growth is crucial for the creation of policies that encourage the inflow of investments from abroad in the developing world. Both studies confirm the importance of the FDI-economic growth causality but also imply that the nature of this causality and its direction should be placed under professional scrutiny. As long as the effects of FDI on economic growth in host countries are characterized by considerable...
This essay outlines the difficulties in establishing the functional relationships of FDI influence on economic growth in host countries. One of the greatest problems in this respect is the lack of sufficient empirical data. Another difficulty is the lack of organization and poor systematization of the existing knowledge.
Theoretically, FDI promotes economic growth through an increase in investment volumes, leading to increased efficiency of all economic and financial operations. Another theory suggests that economic growth is a direct result of the technological diffusions caused by FDI. Objectively, there is no single explanation to the effects of FDI on economic growth: numerous variables moderate the relationship between FDI and economic growth in host countries, and the current knowledge of financial markets and macro/microeconomics does not allow producing a comprehensive theory of FDI and its impacts on host countries’ economies.
In order to understand how and why FDI impacts host countries’ economic growth, the meaning of both terms needs to be clarified. For the goal of this paper, foreign direct investment is defined as “the process whereby residents of one country (the source country) acquire ownership of assets for the purpose of controlling the production, distribution, and other activities of a firm in another country.
FDI impacts economic growth through structural effects, skill and technology, and size effects. TNC play a huge role in the transfer of capitals and skills from one country to another. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The Influence of Foreign Direct Investment (FDI) on the Economic Essay”, n.d.)
The Influence of Foreign Direct Investment (FDI) on the Economic Essay. Retrieved from https://studentshare.org/business/1400282-the-influence-of-foreign-direct-investment-fdi-on-the-economic-growth-of-the-host-economies
(The Influence of Foreign Direct Investment (FDI) on the Economic Essay)
The Influence of Foreign Direct Investment (FDI) on the Economic Essay. https://studentshare.org/business/1400282-the-influence-of-foreign-direct-investment-fdi-on-the-economic-growth-of-the-host-economies.
“The Influence of Foreign Direct Investment (FDI) on the Economic Essay”, n.d. https://studentshare.org/business/1400282-the-influence-of-foreign-direct-investment-fdi-on-the-economic-growth-of-the-host-economies.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
ar
aryannacollier added comment 2 months ago
Student rated this paper as
I had an issue with a essay types of works. All until I came across this website and this particular document. Even though "The Influence of Foreign Direct Investment (FDI) on the Economic Growth of the Host Economies" is far from my studies, the structure is so great that I use it all the time as an example for my own works.
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Foreign Direct Investment can have both positive and negative impacts on both the host and home country
Foreign Direct Investment is generally defined as investment of funds in a company of one country (host country), by a company of another country (home/investing/source country). A few years back, these funds were defined as direct investments in the form of buildings, machinery and equipment, but now with the changed and increased role of technology; the definition has been broadened to include investments in the form of acquisitions of management interest in an entity outside the investor’s home country.
10 Pages(2500 words)Essay
Estimating and Measuring Foreign Direct Investment (FDI)
Federal Reserve Bank of St. Louis Review 91(2), pp. 61-78. Dimelis, S. and Louri, H. Foreign Direct Investment and Technology Spillovers: Which Firms Really Benefit? [Online]. Available at: http://www.aueb.gr/imop/papers/DP149.pdf [Accessed on: 04 January 2013].
12 Pages(3000 words)Essay
The impacts of foreign direct investment on host country economies
Gradually, the foreign direct investment, or else the FDI, as this activity has been characterized, see also the next section, has become a common phenomenon in countries worldwide.
11 Pages(2750 words)Essay
Why is the UK the TOP Destination for Foreign Direct Investment (FDI) in the European Union
Why is the UK the TOP destination for Foreign Direct Investment (FDI) in the European Union? In light of this, to What Extent do Government Agencies (Both National and Local) Need to Actively Attract this Investment? Introduction: The United Kingdom remains the one of the most attractive and top destinations in European Union for “Foreign Direct Investment” (Definition of Foreign Direct Investment (FDI) 2010) with almost 728 projects, which are up by 7% than the year of 2009.
7 Pages(1750 words)Essay
Foreign Direct Investment (FDI)
FDI can also be defined as an investment of a company in a foreign country by building a factory within the host country. It is through a company’s direct investment in machinery, building and equipment in another country that foreign direct investment is made possible.
10 Pages(2500 words)Essay
To what extent does inward Foreign Direct Investment (FDI) alleviate poverty in Sub Saharan Africa (SSA)
It can be defined as the purchasing of commodities from a domestic economy by a foreign entity or an investment from an overseas enterprise into another in a distant business or economy. Regardless of the development of commodities and trade with India and China, Sub Saharan Africa’s (SSA’s) economic performance has been quite poor in comparison with East Asia or South East where FDI has played significant role in economic development (Bartels, Kratzsch, and Eicher, 2008, p.1).
24 Pages(6000 words)Essay
Foreign Direct Investment Essay
Some of these countries became full European Union (EU) members in May 2004. They also experienced a significant increase in foreign direct investment (FDI). As a consequence, the ratio of inward FDI stock to the 12 CEE countries studied here in total world inward FDI stock increased more than three-fold, from 0.81% in 1994 to 2.89% in 2004.
6 Pages(1500 words)Essay
Factors that affect Foreign Direct Investment
Factors that affect foreign direct investments inflow and outflow are wide and relate to both domestic and international levels of economies. Objectives of FDIs are mostly to
60 Pages(15000 words)Essay
3.Define foreign direct investment (FDI). Discuss and evaluate five different effects (positive and negative) that FDI can have on host country economies
foreign entity, which receives the investment, Foreign Direct Investment is capable of providing a source of products, processes, new technologies, capital, management skills and organizational technologies. Foreign Direct Investment significantly contributes to economic growth
4 Pages(1000 words)Essay
Social Media Plan
As the paper stresses the entire social media marketing plan. It will include a thorough assessment of both the external and internal factors. It will provide a better understanding by creating an overview of Sun Peaks Resort. On average 76 percent of Sun Peak’s Resort is generated between December 16th and April 2nd. 
7 Pages(1750 words)Essay
Let us find you another Essay on topic The Influence of Foreign Direct Investment (FDI) on the Economic Growth of the Host Economies for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us