Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Foreign Direct Investment for Developing Countries - Essay Example

Comments (0) Cite this document
FDI is one of the leading catalysts to development and growth of worlds economy. One of the most chronic problems among the developing countries is the fact that they do not have enough…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94% of users find it useful
Foreign Direct Investment for Developing Countries
Read TextPreview

Extract of sample "Foreign Direct Investment for Developing Countries"

Download file to see previous pages 10) say that FDI is one of the key options for economic growth of developing countries. However, it is not all developing countries that are open to FDIs.
The FDI helps these economies in terms of foreign capital in form of direct and also some cases indirect investment. Most of developing countries initially depended on loans from international financial institutions and banks but this started changing in the 80s when international banks started experiencing financial constraints. This forced most developing countries to shift the approach and change their investment policies in such a way that will be attractive to stable forms of foreign capital. The advantage of FDI is that developing countries easily get foreign capital without high risks that can be tagged to the debt. According Marchick and Slaughter (2008, p.2) governments have been reviewing their economic policies as an effort to attract MNCs through FDIs into their countries.
It is important to note that FDI is directly affected by multinational companies (MNCs) who are the main participants. With that consideration, then we can easily conclude that factors that affect MNCs also affect FDIs. The capital flow from MNCs is directly injected to FDIs. Most of the times, the MNCs tend to expand their activates to foreign companies for several reasons which include; exploitation and utilization of economies of scales, utilization of particular advantages and at times very unprecedented reasons like just because their main competitors are actively involved related practices. Equally, governments are in competition to attract more FDIs in their nations. They do this by changing and at times compromising some of the key factors in their economic policies. Examples of such factors include corporate taxes, domestic labour market conditions among others.
With all these activities surrounding FDI, MNCs have to be very analytical before making investments in such countries. There are determinants which are ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Foreign Direct Investment for Developing Countries Essay”, n.d.)
Foreign Direct Investment for Developing Countries Essay. Retrieved from
(Foreign Direct Investment for Developing Countries Essay)
Foreign Direct Investment for Developing Countries Essay.
“Foreign Direct Investment for Developing Countries Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Foreign Direct Investment for Developing Countries

The relationship between the foreign direct investment and the growth and development of the underdeveloped and developing countries

... INTRODUCTION 1. Overview: The economy of China has been showing continuous growth and development in previous few years. The economists and analysts acknowledge the dramatic improve in the economy of China with the passage of time as the country has evolved from underdeveloped country to an emerging and developed world economy. Most of the countries and analysts have been looking towards China in order to provide financial support to different underdeveloped and developing countries. In this regard huge emphasis is on the Chinese investment in the African countries (Desta, 2012). Foreign direct investment has an important role to play in improving the economic condition of the country (Dunning, 1993). Particularly if the country... is...
22 Pages(5500 words)Dissertation

Foreign Direct Investment (FDI) the development of global business enterprises. Kennedy (2001, p. 585) say that the definition of foreign direct investment has been broadened with the increased change in the patterns of global investment by companies. As a result, FDI includes acquisition of managerial interests in companies and enterprises in foreign countries. The managerial interest may not involve investment in buildings or equipment but managerial decisions are determined by executives who are foreign to the host country. The rapid growth of companies which is attributed to the...
10 Pages(2500 words)Essay

Arguments for and against Foreign Direct Investment In Developing Countries

...? Arguments for and against Foreign Direct Investment (FDI) In Developing Countries Foreign direct investment (FDI) is direct venture into business in a country by a company from another country. This can be either by buying a company in the intended country or by increasing operations of an open business in that country. In actual practice, FDI attraction may be  different in various countries. In this respect, technology, market access, growth, poverty reduction and the FDI outcomes of a...
7 Pages(1750 words)Essay

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... in the...
17 Pages(4250 words)Essay

The Flow of Foreign Direct Investment to Developing Countries

...Foreign Direct Investment Introduction Foreign direct investment has figured prominently in the recent economic history of most developing countries. Until the early twentieth century, this investment principally took the form of investment in the extractive, mining, and agricultural industries in these countries. Extractive investment tended to be coupled thereafter with investment in industries in these countries designed to satisfy local demand for particular goods and services, including...
28 Pages(7000 words)Essay

Foreign Direct Investment in Developing Countries

.... CRITICAL LITERATURE REVIEW ON FOREIGN DIRECTINVESTMENT IN DEVELOPING COUNTRIES The current global climate relies heavily on the existence of Foreign Direct Investment as a determining factor in the economic growth of any region. However, questions remain as to why there are certain pockets of countries where FDI seems to be flourishing, while others are vying for attention in this regard. There are many statistics that point to this (Vaknin, 2007, np). For example, only one third of the developing and poor nations get any forms of FDIs, and these are...
7 Pages(1750 words)Essay

Foreign Direct Investment

.... A multinational firm in a developed country may face higher labor costs, scare production resources and higher production costs when locating its subsidiaries in its own home country, while a shift overseas may involve a larger initial investment but is economically beneficial in the long run because the margin of profits are higher, with the development of new markets. 1.1: Introduction: 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...
9 Pages(2250 words)Essay

Determinants, Benefits and the Risks of Foreign Direct Investment for Developing Countries

...Determinants, Benefits and the Risks of Foreign Direct Investment for Developing Countries Introduction Foreign direct investment (FDI) is an investment established to accrue a lasting management interest in a business enterprise operating in a country other than the investor’s, defined according to residency (Mwilima, 2003). FDI plays an important role in the open and effective operations of the global economic system. It can provide the firm which intends to invest in another country with cheap facilities of production; cheap raw...
11 Pages(2750 words)Assignment

Foreign Direct Investment in Developing Countries

...Foreign direct Investment in Developing Countries Introduction Foreign direct investments refer to direct investment inbusiness or production in the country by a company or an individual of another country. That could either be by buying an industry in the target nation or by expanding operations of an existing company into that country. In simpler terms, it means that a firm makes an investment, physical in kind, such as building an industry in another country. The cord between a states...
9 Pages(2250 words)Article

Critically examine the determinants, the benefits and the risks of Foreign Direct Investment for Developing Countries, using example of countries of your choice

...Introduction: F.D.I acronym for Foreign Direct Investment is a key indicator and element of the economy of a given country. It directly impacts the overall health of the country in various ways. It however does bring upon number of considerations, constraints and requirements with itself with regard to its impact on the overall economy. The impact of F.D.I varies with regard to the outlook of a given country. For a developing country the concept of F.D.I brings along the consideration of critically evaluating all the angles and aspects related to its processing (Moran, 2011, p. 81). India as a...
11 Pages(2750 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 Foreign Direct Investment for Developing Countries for FREE!

Contact Us