Europe in the Internation Economic Order - Essay Example

The FDIs are constant and cheap sources of funds for the companies of a country and the Government is encouraged to allow the increase of the FDI for the development of the economy. It produces huge capital, which helps in the production of goods with the use of the modern technologies. The FDI influx is generally seen in most of the countries. However, the intensity is more in the less developed countries, as they are the ones in need of capital. With the entry of FDI, comes the vision of the management from the developed countries, which helps in the production procedure in the countries.

This helps in the development of the economy of the countries. On the other hand, the companies of the developed nations are attracted to the FDIs because they get ample amount of benefits in the country where the investment is made. The companies want to extend the territory of the business and the best way to do it is by investing in the foreign companies. In this age of competition, it is of great importance to capture the market and FDIs provide the companies the tool to do so. In the case of some of the FDIs, there is transfer of technologies, which helps the domestic companies.

As stated earlier, the influx of the FDIs is the strongest in the less economically developed countries (LEDC). The LEDC provide the organizations of the developed countries a huge market and the Governments of these countries provide the necessary tools like the tax concessions to attract the FDIs. The Governments understand the need of capital formation in the country and they attract the investments. The FDIs are also seen in the more economically developed countries (MEDC). The paper will deal in the issues of the strategies of the LEDC and MEDC in attracting the FDIs.

In the case of the MEDC, a European country will be taken. The benefits and the advantages of the policies of the Government will be evaluated in the case of the attraction of