preview

Foreign Direct Fdi ( Fdi )

Decent Essays
In recent times, there has been increased attention devoted to the role that foreign direct in-vestment (FDI) could play in ameliorating the general dearth of capital available for investment in most developing countries. Even though FDI is primarily meant to bridge the gap between the desired level of gross national investment and the prevailing amount of domestic savings and in-vestment, it also results in positive externalities that often serve as a catalyst in the overall eco-nomic growth and development of the country that receives it. The inflow of FDI is known to yield indirect benefits, such as enhanced employment opportunities, the improvement of the bal-ance of payments (BOP) account situation due to the increased availability of foreign exchange in an economy, and perhaps, most importantly, the prospect of the transfer of technology, manageri-al skills and other intangible knowledge to the host country which would allow domestic firms to improve their collective profitability and performance (Elijah, 2006). On a global basis, Foreign Direct Investment (FDI) flows increased by about 35 percent to $345 billion between the second and third quarter of 2013 after a decrease of 32 percent between the first and second quarter of the same period. Despite this increment in the third quarter, total flows for the first three quarters of 2013, at $977 billion, were 4 percent below the $1 trillion ob-served over the same period in 2012. This sluggish performance would seem to
Get Access