Contact Us
Sign In / Sign Up for FREE
Go to advanced search...
Nobody downloaded yet

Foreign Direct Investment as a Source of Economic Growth - Coursework Example

Comments (0) Cite this document
The paper "Foreign Direct Investment as a Source of Economic Growth" discusses that when the local firms start to fear the foreign firms, and so want to provide better products and services, thereby compete with them, they will surely optimize its operations to maintain the hold or market share. …
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.3% of users find it useful
Foreign Direct Investment as a Source of Economic Growth
Read TextPreview

Extract of sample "Foreign Direct Investment as a Source of Economic Growth"

Download file to see previous pages Foreign Direct Investment (FDI) is one of the key catalysts for globalization and the resultant economic growth that is visible in many countries. However, if viewed from another perspective, it appears that globalization and the globalization friendly policies of many countries only pushed the companies to initiate FDIs in various territories. So, when viewed from an overall perspective, it is clear that both, globalization and FDI are correlated, with one acting as the catalyst for other, and vice versa.
Globalization during the last few years has been witnessed by a massive jump in the total quantum of FDI. The extent of increase in FDI might be placed in proper perspective when one understands that between the years 1980 and 1995 there was a four-fold increase in the total amount of FDI worldwide. If one examines the geographical origins and destinations of these FDIs, one discovers that most FDI tends to originate in United States, Japan, Germany, the United Kingdom, France, the Netherlands, Sweden and Switzerland. So, a significant benefit of these total annual FDIs is directed at these industrialized countries rather than at the economies of the Third World. (Castells). However, this bias towards industrialized countries has started tilting towards the Third World countries during the first few years of the twenty-first century as one learns that in 2004, for instance, FDI inflows into the developing economies represented about 36 percent of aggregate global FDI inflows. (UNCTAD). Thus, a strong trend has been the number of service MNCs’ globalizing their operations through FDI, with major activities in FDI visible at the turn of the century (Dunning 1989). Statistically, ‘the world’s inward stock of services FDI quadrupled between 1990 and 2002, from an estimated $950 billion to over $4 trillion’ (UNCTAD). However, FDIs have not been flowing equitably in all the Third World countries, as 80% of FDI inflow into the Third World countries is directed towards only 20 Third World countries among which China has been the largest Third World recipient of FDI for a number of years.  ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(Foreign Direct Investment as a Source of Economic Growth Coursework, n.d.)
Foreign Direct Investment as a Source of Economic Growth Coursework. Retrieved from
(Foreign Direct Investment As a Source of Economic Growth Coursework)
Foreign Direct Investment As a Source of Economic Growth Coursework.
“Foreign Direct Investment As a Source of Economic Growth Coursework”.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Foreign Direct Investment as a Source of Economic Growth

Foreign Direct Investment

... input resources and hence, Germany gets an edge over Vietnam in this case. In fact, after the introduction of knowledge base as one of the most important factors contributing in the production process, Heckscher-Ohlin model of trade was found to be applying for 11 out of 15 OECD nations (Nishioka, 2005). References Aghion, P. & Durlauf, S. N. (2005). Handbook of economic growth, Volume 1, Part 2. London, UK: Elsevier. Ahmed, S. & Sattar, Z. (2004). “Trade liberalisation, growth and poverty reduction: The case of Bangladesh” [PDF]. Available at [Accessed: July 28, 2011]. Assadourian, E. “Foreign Direct Investment Inflows Decline...
11 Pages(2750 words)Assignment

Direct Foreign Investment

The growth of FDI has always been associated with the growth of financial markets in terms of market capitalization. This paper will compare the FDI in China and Brazil in categories of five factors that influence foreign direct investments. II. LITERATURE AND PREVIOUS STUDIES/ARTICLES SURVEY Research studies indicate that China and Brazil are expected to be among the largest economies in the world by the year 2050. The two countries are considered to be among the biggest and fastest growing emerging markets that have a significant long term growth potential. The two countries occupy a large geographical coverage and research shows that the countries contain about 30 percent of the global population. China and Brazil also have a...
8 Pages(2000 words)Coursework

Foreign Direct Investment (FDI)

... flows, 2002-2005. Survey of Current Business, (00396222), 34-39 Park, H 2000, "Foreign direct investment and global sourcing choices of firms in the US", Managerial and Decision Economics, vol. 21, no. 6, pp. 211-221. Song, S. 2008, The value of switching and growth options in foreign direct investment, The Ohio State University. Swann, C. 2005, UK direct investment quadruples, London (UK), United Kingdom, London (UK). Trakman, L.E. 2009, "Foreign Direct Investment: Hazard Or Opportunity?", The George Washington International Law Review, vol. 41, no. 1, pp. 1-66. Tuomi, K.L. 2009, Fundamentals, tax incentives and foreign direct investment, The American University. Zamborsky, P. 2008, Foreign direct investment, performance and competitive...
10 Pages(2500 words)Essay

Foreign Direct Investment

...?The global economy is becoming more and more integrated and countries are now exploring ventures in other parts of the globe for sustainable and lucrative investments. Direct foreign investment (DFI) is one of the strategies which have lately been adopted by various MNCs in order to make the most of the foreign economic environments. DFI encompasses a broad spectrum of investment ranging from investment in existing companies, real estate, equity and capital market and even investment in the development of infrastructure. Acquisition of foreign entities and establishment of joint ventures abroad can also be categorized as DFI. Any capital venture, along with forecasts of return and profit, also comes with an array of risk and uncertainties...
10 Pages(2500 words)Research Paper

Chinese Foreign Direct Investment

This study examines Chinese investments in Zambia as foreign aid to the country. The general objective of the paper will be to find out whether Chinese foreign direct investments could lead to the long-term economic growth of Zambia. The paper seeks to fulfill these specific objectives: This study examines Chinese investments in Zambia as foreign aid to the country. The general objective of the paper will be to find out whether Chinese foreign direct investments could lead to the long-term economic growth of Zambia. The paper seeks to fulfill these specific objectives: 1) To find out the extent of Chinese foreign direct investments in the Zambian Mines2) To establish the impact of the Chinese foreign direct investments o...
13 Pages(3250 words)Research Paper

Starbucks Foreign Direct Investment

...?Starbuck’s Foreign Direct Investment Expansion through Licensing Format Starbucks was founded in 1971 as a small coffee store in Seattle’s Pike Place market. By 1992, when it went public, it had become a national phenomenon and was expanding at a break-neck pace (Pride, Hughes & Kapoor, 2009). Patterson et al. (2010) write that the two main reason Starbucks was able to become an international phenomenon are: Firstly, unlike any other coffee brand Starbucks was able to Americanize the European coffee-drinking tradition. Secondly, Starbucks did not just sell coffee, they sold an experience (2010, p. 41) Starbucks has laid significant emphasis on consistency of product, atmosphere and services across their stores globally. In other words...
7 Pages(1750 words)Literature review

Foreign Direct Investment

... aspect of IFIs in the past decades was the growth of globalization and the increasingly integrated role of the capital markets. In the early 1980s, a bulge in the level of capital flows in the direction of emergent markets became more prominent, on the basis of managing the oil revenues. Yet this degenerated into the 1982 economic meltdown due to accumulated debts. After a lull of economic crisis and the development of stronger macroeconomic policies which yielded stability, the world economy registered a sharp rise in the capital flows in the early 1990s. This came at a time when many countries that sought to rely upon direct foreign investments and credit services from non-banking organizations, accounted for the primary source...
17 Pages(4250 words)Essay

Foreign Direct Investment Risks

...International Finance Management: Foreign direct investment risks: Foreign direct investment is the long term investment by an investor in another country other than the country he resides. Before decisions on investments are made several factor are considered and this include political stability and exposure of transactions and currency which include skilled labor and infrastructure. Risks A. Political instability: Political instability according to Kobrin (1979) can be defined as the decisions made by the host country will affect the business climate in such a way that the investment made will loose money or not make as much money as they had expected when the investment was made. Some of the factors that cause political...
2 Pages(500 words)Essay

Foreign Direct Investment

Foreign Direct Investment refers to the investments that a multinational firm makes when it is initially located in one country but decides to locate to or acquire substantial production facilities in another country. FDI is a significant factor in operation of MNCs. As Bernard, Jensen and Schott [2] point out, its importance to the U.S. economy is demonstrated by the fact that about 90% of all exports from and imports into the U.S. flow through a U.S. MNC while roughly 50% of the trade flows in fact occur between subsidiaries or affiliates of the same MNCs.[2]. Foreign Direct Investment in another country could take place through the financing of new investments within the target country or even through mergers and acquisitions o...
9 Pages(2250 words)Essay

Foreign Direct Investment

Succinctly put, foreign direct investment provides a viable route for companies to take advantage of resources that are cheaper and abundant in a foreign country; or perhaps, scarcely or unavailable, in the country of origin. The resources sought by the firms could be physical, skilled labor, or techno-managerial skills (Dunning & Narula, 1996). Firms seek to do business on foreign soil using its internal organization, techno-management know-how thereby acquiring, training and coordinating resources towards the development of processes, technologies, and products, and thus meet market demands.
Mere location-specific advantages and ownership of assets in a foreign country does not make FDI successful. Firms need to internali...
10 Pages(2500 words)Dissertation
sponsored ads
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.

Let us find you another Coursework on topic Foreign Direct Investment as a Source of Economic Growth for FREE!

Contact Us