Foreign Direct Investment ( Fdi )

The benefits brought by FDI to China are apparent. Economy is influenced by FDI in a number of ways. FDI involves transfer knowledge in the host country, which will create an increase on the existing stock of knowledge through labor training, the transfer of skills, and the transferring of new managerial and organizational experience. Also, it can help local corporations to access to advanced technology by capital accumulation in host countries (Mello, 1999 and Mello, 1997). Furthermore, FDI may allow China to develop in technology and knowledge which are not readily available locally, as a consequent increase productivity growth through the economy (Jose, 2003).

FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)

The effects can be negative or positive. According to the theory of Hill (2003), FDI can affect host countries on resources-transfer effects, employment, competition and product and process innovation. There are a small number of research available that explain the behaviour of local companies when FDI take place. Nevertheless, there are many research that explain the benefits for the local economy. Foreign direct investment can increased indirect productivity for host country companies through the realization of external economies. Generally these benefits indicates the importance of the way in which the influence is transmitted that referred as “spillovers” (BlomstrOrn,

To attract FDI, corporate tax incentives has been used worldwide, as FDI significantly boost up the productivity and the growth of economic. The reason why China has become the most attractive destination of FDI is that its FDI policies, huge labour supply and low cost of it, stable economic and political environment. (Deng et al., 2007). FDI inflows into China

One of the primary benefits of foreign direct investment is that it helps the developing country. When a large corporation pours millions or billions of dollars into building part of its business in that country, it can significantly stimulate the local economy. This helps other businesses in the surrounding

According to the International Monetary Fund (IMF), Foreign Direct Investment (FDI) is defined as “cross border investment where a resident in one economy has control or a significant degree of influence on the management of an enterprise in another country.” FDI in the past decade has grown intensively, exceeding the growth of world production and the growth of international trade (Dierk, 2008). Many nations are open and engage in FDI because it will benefit domestic firms. Brazil, a top emerging market, has experienced record number of FDI projects, establishing it as the second most popular global destination in terms of FDI value. The country has experienced steady growth over the past decade and is projected to keep increasing its number of FDIs.

Developing countries are stuck in a cycle of poverty that can’t be broken from within the domestic economy due to an insufficient supply of investment available in these countries to raise the productivity and income levels of workers. The only way to break the cycle of poverty is through investment from multinational corporations. FDI is an

Foreign direct investment plays a critical role in financing the development of emerging economies. Foreign direct investment benefits countries through a transfer of resources in the form of capital, technology, management of resources, creation of work opportunities, and a positive impact on the country’s balance sheet, typically through an increase in export volumes. These benefits are essential for sustainable growth and development of a country, especially for developing countries. Despite the important role that foreign direct investment plays in helping to achieve the Sustainable Development Goals, many developing countries face challenges in accessing this source.

Foreign Direct Investment (FDI) improved from 6.5% of the world’s GDP in 1980 to 31.8% in 2006.

Foreign Direct Investment is the direct investment in new facilities or companies to expand a business in a new country. In evaluating and analyzing East Asia, it is important to focus on cultural issues as they are major indicators of the business environment and implementation in a given local. East Asia, including China, only began opening up for foreign investment in the 1970s. Japan is considered a developing market, where the rest of Eastern Asia is an emerging market, the majority of FDI around the world is targeted to developing nations due to increased stability, consumer culture, and large markets. The risk of emerging markets is greater than in developed, thus yielding a greater return on investment when the endeavor succeeds.

Ekpo, A.H. (1995) investigated that the element like higher gain from investment, low labor and production cost, political stability, enduring investment climate, official infrastructure facilities and helpful regulatory atmosphere also serve to invite and guard FDI in the host country.Chadee and Schlichting (1997) investigated some of the aspects of FDI in the

The factors involved in process of economic growth of nations have transformed overtime, from savings to trade, foreign investment and human capital base of the country. With opening up of the economies and the formation of multiple agreements among the countries, trade and FDI have become the major medium of accord among the economies. There has been surge in FDI inflows ever since the countries adopted liberalisation policies across the globe. The countries have been looking for policies to attract more FDI by boosting investment climate in their countries, to finance their process of growth and development.

In the recent time, significant rise of outward foreign direct investment (FDI) was witnessed from developing countries like China and India. The Organisation for Economic Co-operation and Development (OECD) defines FDI as an investment that reflects the objective of establishing a lasting interest or long-term relationship by a resident enterprise in one economy (direct investor) in an enterprise (direct investment enterprise) that is resident in an economy other than that of the

High inflow of foreign investment is needed for a country to gain a high sustainable economic growth. For an economy to grow by 7 to 8 percent a year, there is a need to invest about 30 to 40 percent of GDP. FDI is good and strong developmental equipment that contributes to the economic growth of host country. This growth are contributed by the high increase of capital stocks in the host country, increase in productivity and availability or creating of new jobs. These new creation provided by FDI also leads to productivity and knowledge spillover on the domestic firm. Productivity and knowledge spillover increases when the productivity of the local firm is gained through the leading edge of technologies employed by the foreign companies. However, there is some negative impact on this because the foreign firm or investor has the ability to draw the demand away from the local firm because of the price of reduction to their new different and innovative products or goods and due to this, the local firm’s productiveness will decrease because of the market run down by the foreign firm or investor. The ability of a local firm to take the spillover benefits is dependent on how the local firm takes in the foreign firm skills and technological know how.

Almost all of the countries are trying to attract FDI, as inward FDI could bring host countries a number