Fdi Develop Country

In: Business and Management

Submitted By rizamojo
Words 850
Pages 4
The Truth is that Inward FDI can be good or bad depending on the economic structure/ system of the host country and how the macrieconomic environment is managed as well as how competitive are the markets in that economy. Foreign Direct Investments should rather be welcome and taken advantage of by both developing and developed countries to foster economic development and growth, absorb better technology and management tecchniques, lower cost of funds, better global exposure and improve international competitiveness. However, only for reasons of security and eliminate money lundering strict vigil on the sources of foreign investment should be checked, there should not be over-dependence on FDI (% of FDI to total domestically financed investment should not be very high and should decline to a lower limit as the economy develops, and FDI should be encouraged to remove domestic monopolies and foster competion in all markets.
In the book "Does Foreign Direct Investment Promote Development?" edited by Theodore H. Moran, Edward M. Graham, and Magnus Blomström, (ISBN paper 0-88132-381-0 • May 2005 • 440 pp • $28.95), one can get the latest empirical research on the subject. Studies of the linkage between foreign direct investment and development have produced confusingand sometimes contradictory results. Some have shown that foreign direct investment
(FDI) spurs economic growth in the host countries; others show no such effect. Some find spillover benefits to the host economy—that is, benefits not appropriated by investors or in the form of superior wages—while others do not discern these benefits. A new book from the Institute for International Economics, Does Foreign Direct Investment Promote Development?, seeks to untangle the knotty questions plaguing this field of research and presents new results that show how host countries can maximize the benefits of FDI. For years,…...

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