Foreign Direct Investment ( Fdi )

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In this 21st century, we live in a time like no other. The world has transformed as a result of globalization. Globalization has made it possible for individuals who wake up in east, to end their day in the other part of the world. Nations came together and eliminated trade barriers, which enabled Corporation’s to begin foreign direct investment (FDI) in other nations. This resulted, corporations transform into Multinational Enterprises. The movie “The Grand Seduction” shows the powerful impact FDI’s can have for an economy. This essay will analyze the movie and the following statement “The attraction and retention of foreign direct investment (FDI) is a complex and multifaceted activity for a number of different stakeholders”. This essay…show more content…
This was very successful for India “It said after the launch of 'Make in India ' initiative, there is a nearly 40 per cent increase in FDI inflows during October 2014 to June 2015.”(Economic Times). FDI from developed countries to developing countries is a vehicle not only for providing physical capital, but also for transferring advanced technology, managerial skills, and innovative products. The transfer of intangible assets if often viewed as the “spillover” effects of FDI. Foreign affiliates from developed countries may also replace inefficient firms in developing countries. In “The Grand Seduction” once a fishing community where people lived happily were now dependent on government welfare. The government was helping its citizens but the help in a way was degrading lives of the people. People wanted to leave the town and go elsewhere. In the movie we see the mayor planning to offer full tax exemption to bring in the factory in the town. The movie shows the FDI as a last resort to revive Newfoundland. Studies show that FDI in the manufacturing sector plays a very important role in enhancing the economic growth, but FDI in nonmanufacturing sectors does not, example agriculture. Manufacturing FDI accounts for the lion’s share of FDI inflows in developing countries. In Foreign Direct Investment “Based on two-stage least squares, manufacturing FDI share has positive and
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