Nobody downloaded yet

3.Define foreign direct investment (FDI). Discuss and evaluate five different effects (positive and negative) that FDI can have on host country economies - Essay Example

Comments (0) Cite this document
Summary
FDI provides an entity with marketing channels and new markets, low cost production facilities, new technology, access to new products and financing. In addition, for a host nation or…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93% of users find it useful
3.Define foreign direct investment (FDI). Discuss and evaluate five different effects (positive and negative) that FDI can have on host country economies
Read TextPreview

Extract of sample "3.Define foreign direct investment (FDI). Discuss and evaluate five different effects (positive and negative) that FDI can have on host country economies"

Download file to see previous pages This assignment will cover the definition and effects of foreign direct investment on the host country’s economy.
Foreign direct investment refers to a form of investment, where a company from one country decides to make a physical investment in another country by putting up an industrial unit in another country. The direct investment in machinery, buildings and equipment contrasts a portfolio investment that is considered as making an indirect investment (Gregory 1997, p. 33). Currently, with the rapid growth and transformations in global investment patterns, the definition has widened to include the acquirement of a lasting management interest in an entity outside the investing company’s home country. Going by this definition, therefore, Foreign Direct Investment may take various forms such as; direct acquisition of a foreign entity, building of a facility, or investing in a joint venture with a local firm.
One of the principal effects of the foreign direct investment is diffusion of technology. A foreign direct investment encourages the entity seeking investment in the foreign country to use different technologies in the production process (Razin 2008, p. 64). The firm uses its own technology in buildings and the way of doing business. In so doing, people in the host country acquire new technologies and skills from the foreign entity, which they apply in the production process. Use of the acquired skills and technology in the production process assist the host country increase its productivity. Through the increment in production, the Gross Domestic Product (GDP) of the host country is increased considerably, which promotes economic growth (Moran 2005, p. 64).
FDI provides the host country with increased physical stock. The increase in the physical stock increases the productivity rate of the host country. This adds up to the country’s income. In addition, the FDI provides the host country with finances for investment, which adds up to ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“3.Define foreign direct investment (FDI). Discuss and evaluate five Essay”, n.d.)
3.Define foreign direct investment (FDI). Discuss and evaluate five Essay. Retrieved from https://studentshare.org/macro-microeconomics/1592604-3define-foreign-direct-investment-fdi-discuss-and-evaluate-five-different-effects-positive-and-negative-that-fdi-can-have-on-host-country-economies
(3.Define Foreign Direct Investment (FDI). Discuss and Evaluate Five Essay)
3.Define Foreign Direct Investment (FDI). Discuss and Evaluate Five Essay. https://studentshare.org/macro-microeconomics/1592604-3define-foreign-direct-investment-fdi-discuss-and-evaluate-five-different-effects-positive-and-negative-that-fdi-can-have-on-host-country-economies.
“3.Define Foreign Direct Investment (FDI). Discuss and Evaluate Five Essay”, n.d. https://studentshare.org/macro-microeconomics/1592604-3define-foreign-direct-investment-fdi-discuss-and-evaluate-five-different-effects-positive-and-negative-that-fdi-can-have-on-host-country-economies.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF 3.Define foreign direct investment (FDI). Discuss and evaluate five different effects (positive and negative) that FDI can have on host country economies

Foreign Direct Investment can have both positive and negative impacts on both the host and home country

...? Foreign Direct Investment can have both positive and negative impacts on both the host and home country. University Date of Submission 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...
10 Pages(2500 words)Essay

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

..., 2005, p.404). The effects 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...
8 Pages(2000 words)Essay

Estimating and Measuring Foreign Direct Investment (FDI)

...and contribution of FDI in strengthening the working and functioning of the economy of the country. The paper is further directed towards the steps which are undertaken for estimating foreign direct investment in the country. Along with this there is detailed discussion about the measurement techniques and tools which are used in relation with this concept. Further the major points of the discussion have been clubbed in the conclusion section of the paper. Foreign Direct Investment...
12 Pages(3000 words)Essay

Investment in emerging market or the effects of foreign direct investment(FDI) in emerging market

...also strived to draw the attention of the foreign investors by offering incentives (Michi, Cagatay & Koska, 2004). This led to a serious competition to access the developing nations’ markets and the evaluation was based on costs, internal market and ownership/location advantages. The developing nations, in turn, expected to make up for the inefficient resources, and also gain knowledge and expertise both on production processes and management techniques. The MNCs have been entering the developing economy through foreign direct investment (FDI). Foreign investment has...
23 Pages(5750 words)Dissertation

The impacts of foreign direct investment on host country economies

...?Using examples and case studies discuss and evaluate the impacts of foreign direct investment on host country economies Introduction The liberalization of markets worldwide, an effect of globalisation, has led to the elimination of the barriers for developing investment activities abroad, i.e. to a country different from the country of residence of the investor. Gradually, the foreign direct investment, or else the FDI, as this activity has been...
11 Pages(2750 words)Essay

The Effect of Democracy on FDI (Foreign Direct Investmant)

...?Effect of Democracy on FDI The recent economic recession has detrimentally affected world markets. Within this context of understanding countries have mobilized in a process of development where one of the primary strategic approaches has been the procurement of foreign direct investment (FDI). Still, there are varying perspectives on the most efficient approach to this aspect of development. Some of the most prominent investigations have linked governmental structure to foreign direct investment. This essay examines the...
3 Pages(750 words)Term Paper

Foreign Direct Investment (FDI)

...therefore led to both positive and negative implications on the economy of host countries. These implications include the effects of FDI on production, marketing, technology, financing, skills and employment. References Alam, A 2009, “Foreign direct investment and supply chain capability of nations: A conceptual and empirical analysis”, The George Washington University. Belderbos, R., Jie-A-Joen, C and Sleuwaegen, L 2002, "Local content requirements, vertical cooperation, and foreign direct investment", De Economist,...
10 Pages(2500 words)Essay

FDI, Setting Up a Business in a Foreign Country

...SNAP FITNESS ENTRY INTO SOUTH KOREA Report on the Entry of Snap Fitness into South Korea South Korea South Korea is a country that lies along the temperate region of Northern Hemisphere in East Asia. It is a presidential republic with 17 administrative divisions. It is a developed country with the second highest living standards in Asia. Economy in South Korea is export driven with much focus being on production of electronics, vehicles machinery and robotics. The country has made enormous economic steps towards becoming a middle-income donor country (Kim & Jaffe, 2010). The export-oriented economy is expected to remain moderate in the...
3 Pages(750 words)Term Paper

Globalization, Foreign Direct Investment (FDI), or Multinational Corporations (MNCs)

...) are companies that distribute goods and services across borders with an aim of spreading ideas and controlling assets in more than one state. They play a significant role in globalization and economists argue they make the greater part of it. MNCs mostly practice Foreign Direct Investments (FDI): in order to manage rights and control economic transactions in different states. GLOBALIZATION AND INSTABILITY Realists link globalization with instability and increased interdependence among countries that results from the extensive use of resources to achieve success at an international level thus overlooking the domestic economic stature....
4 Pages(1000 words)Essay

FDI

... FOREIGN DIRECT INVESTMENT (FDI) Part According to Nicholls, foreign direct investment is the investmentof firms, for instance, transnational or multinational organizations in foreign countries while keeping their head office in a developed or rather mother country.1 Similarly, Blaine defines foreign direct investment as the control and management of an enterprise, organization or facility with interest for a long term in a foreign country. Ideally, foreign direct investment is an element of a state’s national financial account, and thus it can be defined as the act of investing foreign assets in a domestic facility.2 In a foreign direct investment scenario there are normally two parties that are involved; the foreign affiliate... ...
3 Pages(750 words)Essay
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 Essay on topic 3.Define foreign direct investment (FDI). Discuss and evaluate five different effects (positive and negative) that FDI can have on host country economies for FREE!

Contact Us