Dissertaion on: Impact of Foreign Direct Investment - Essay Example

The Government needs to put in some measures like the tax cuts and the development of the infrastructure to attract the FDIs. The Foreign Direct Investment is one of the major focuses for the development of the modern economy. Most of the countries in the world have developed due to the influx of the Foreign Direct Investment (FDI). It has been a major force for the growth in some of the countries. FDI has assumed a form of a global activity. It can be said to be an activity where a citizen of a country invests in another country.

The investment can be in a new Greenfield project or in some existing projects. There may be investments in the shares of the company, which helps, in the global capital transfer. Therefore, the FDI helps in the economic development of the country as a whole. The scope of FDI is huge and it has a widespread impact on the global economy. The trends of the FDI show that it assumed its peak in the last decade of the last century. This was the period when the countries all over the world were opening up the borders of the economy and there was an increased level of development in the globalization process.

The new decade saw the level of FDI decrease to a certain extent. This can be accredited to the fact that the FDI corrected itself to a sustainable level. The FDI in the modern world consists of the mergers and acquisitions of the global companies in different countries. The level of FDI in a country depends on several factors like the state of the economy, the condition of the industry, the tax structure etc. Some of the countries like Luxemburg have become attractive destinations for the FDI as the tax structure is favorable.

(OECD, 2003; Pp 157-159). The FDI has been influential in the development of the countries in the South East Asia. The countries like the Philippines, Thailand,