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Impact of Foreign Direct Investments in BRICK Economies
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Impact of Foreign Direct Investments in BRICK Economies
The BRICK countries have been attracting huge foreign direct investments in the recent past due to the peculiar nature of their economies. They are seen as emerging markets with huge economical growth and development that is experienced in any other economies. The major characteristics of the countries are the enormous consumer market comprising of large middle-income citizens and huge natural resources endowment. They also have sound financial institutions, excellent, efficient and modern communication, and transport and energy sectors. In addition, the economies have sound legal systems (Narayanamurthy Vijayakumar, 2010). According to (Khan, 2011) FDI is not only the financial component but covers other areas such as technology management, capital and market access. in their research (Philip, 2010) they found out that 1 percent of FDI in these countries resulted to about 0.07 percent increment in the countries’ GDP. The main impact of the FDI to the BRICK economies is as discussed below The investments received form foreign investors facilitate the country to venture into the global market. This is especially because the multinationals investing within these BRICK countries is able to produce goods in large scales for the global markets. This therefore enhances the countries to take advantage of globalization. Having firms that can produce for the international markets makes the country have favorable balance of trade, which makes the country favorable among the providers of finance. The increasing export earns the much needed foreign exchange and taxes. These are the factors taken into account when determining the GDP of any economy
The FDI in the BRICK results to…...

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