Impact Of Foreign Direct Investment On Growth And Inflation Of A Country

Gross domestic product (GDP) is used to measure the size of the economy. GDP is the total value of the final goods and services produced within an economy in a year or quarterly.

Gross Domestic Product, also known as GDP, is defined as the dollar value of all final goods and service produced within the border of a country during a specific period of time, typically in one year. GDP measures the value for the whole country, and it also changes quickly. We can take a look at the trends of US GDP in the website of the U.S. Bureau of Economic Analysis.

For many years FDI has allowed lots of externalities such as displacement of general knowledge, level elevation in industrilization, important technology change in production and distribution, workforce development. Host country's competitiveness increase by FDI's services. Cause when a country get FDI inflow that means the country attract new capital so its productivity increase. If FDI would be productive then the capital that coming the country will be stable and long lasting. With the competition brought by FDI, in the host country's companies effected very efficially from this. They tend to become more productive and they would be more powerful againts abroad competitor. In a country when the companies has strong productivity, then the growth ratio in that country is higher than others. ( Baracaldo (2005)). With the FDI inflow of country, the employment generation will increase in that country. When the country's productivity increase, employment ratio will increase and its competitiveness increase, too. FDI contribute to the spillover of technology and improve knowledge. FDI make them efficient and with this way productivity increase(Ramírez (2006)). Also, FDI allow bring new goods and services in host country.

Gross Domestic Product is the curative measure of a nation’s total economic activity. It represents the monetary value of all goods and services produced within a nation’s geographic borders over a specified period of time. In other words, it’s how to tell how the economy of a country is doing. It is the total dollar valued of all goods and services; the size of the economy usually in a given year. GDP first came into use in 1937 in a report to the US Congress in response to the Great Depression, after Russian economist Simon Kuznets conceived the system of measurement. The system used before was the Gross National Product (GNP). It was widely adopted in 1944 as the standard means to measure national economist.

Gross Domestic Product (GDP) is measures the total value of all final goods and services produced within a country's borders. It is used worldwide and by far the most popular method for measuring an economy's output. For example, “Australia's economy has experienced

Gross domestic product, or Gross Domestic Product is the estimation of the considerable number of merchandise and administrations delivered in a nation. The Nominal Gross Domestic Product measures the estimation of the considerable number of merchandise and administrations created communicated in current costs. Then again, Real Gross Domestic Product measures the estimation of the considerable number of merchandise and administrations created communicated in the costs of some base year. An illustration:

The gross domestic product(GDP) in the US is the total value of goods and services in a fiscal

Gross Domestic Product is one of the most significant economic indicators in the economy. Why? The state of an economy is anything but static. It is an ever-changing, whirlwind phenomenon with long inputted variables within a country 's economic landscape that could simply change with a single stroke of the pen. Some of these variables, when inserted into their respective economic equation, lead to indicators to can help predict the state of the economy and where it could be headed. None of these are any more important than the economic indicator of Gross Domestic Product. Gross Domestic Product, or GDP, is defined as “the monetary value of all the finished goods and services produced within a country 's borders in a specific time period” (Gross Domestic Product –

-Gross Domestic Product (GDP); which measures the total market value of goods and services produced in the domestic economy during specific time period, is considered the best measure because it includes the output of all sectors of the economy.

GDP (Gross domestic product) is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time.

the value of all final goods and services produced during a year by a nation’s citizens.

The per capita gross domestic product is the measure of the total output of goods and services that the country provides and divides that by the number of people in that country. The gross domestic product is the monetary value of all the finished goods and services produced within a time frame, generally, it’s a yearly basis. The gross domestic product is a broad measurement of a nation’s overall economic activity.

Kolstad and Villanger (2008) showed that the relationship between FDI and GDP is always positive. When the GDP increases, it means the economy of a country is growing, when the condition of the country is stable, it will attract more foreign investors to invest in the country and thus result in the increasing of FDI. The positive relationship also supported by Oyatoye,Arogundade, Adebisi and Oluwakayode (2011).

It has been widely believed that Foreign Direct Investment (FDI) assists developing countries with the much-needed capital for economic growth. Part of the foreign direct investment is the inflow of up to date technology and management skills. In this paper, I will investigate to what extent foreign direct investment inflows into Ghana affects the nation 's Economic Growth and Development by addressing selected macro economic variables including GDP, Employment and Wages (Income). The Heckscher-ohlin model will be used to examine the relationship between foreign direct investment and Economic growth whiles Graphical analysis will be used to determine the effects of foreign direct investment on the selected macroeconomic variables. What has increasing FDI inflows contributed to Ghana’s economic growth? Has the contribution increased or decreased overtime? Has the effects of foreign direct investment inflows into Ghana been positive or negative? The study seeks to answer these and many more questions on the effects of foreign direct investment. I hypothesize that foreign direct investment has no significant impact on GDP but positively affects employment and wages overtime. Foreign direct investment should therefore be encouraged in developing countries like Ghana.

Foreign direct investment FDI is an investment of a company from one country to another whereby assets are acquired, operations are set up and joint ventures with local firms are made (Financial Times , n.d.). FDI is a risky and more expensive method of venturing globally as compared to licensing and exporting, however it does not stop companies from doing so due to its many advantages. FDI is one of the key drivers in speeding up the development and economic growth in Malaysia. Sound macroeconomic management, presence of a well-functioning financial system and sustained economic growth has made Malaysia an attractive country for FDI. Moreover, FDI plays a crucial role in Malaysia economy as it generates economic growth by increasing capital formation through the expansion of production capacity.