Important Impact of Fdi on Australian Economy

2035 Words Apr 22nd, 2013 9 Pages
Important impact of FDI on Australian economy

Jes Hongs

Abstract

Australia has traditionally relied on inward FDI to meet the shortfall between domestic saving and the level of domestic investment. Inward FDI also continues to play a significant role in making Australian industry internationally competitive, and thereby contributing to export growth. Over the past 15 years Australian outward FDI stocks have grown more strongly than inward FDI stocks. Outward FDI enables Australian firms to expand their business beyond the potential constraints imposed by the limited size of the domestic market. To support increasing investment by Australians at home and abroad, Australia will need higher levels of foreign investment in the future.
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Investment made by private companies and enterprises is usually called private foreign investment. It is the foreign capital that is invested in a particular private enterprise in a certain country from another country. Investment is usually run by the regulations of foreign investment policy developed by a certain country which is interested in attracting foreign investors. This policy is a complex of investment strategies aimed at supporting and improving developing countries from the companies situated in developed countries as well as from the governments of developed countries.

Many governments, especially in industrialized and developed nations, pay very close attention to foreign direct investment because the investment flows into and out of their economies can and does have a significant impact.

State and local governments watch closely because they want to track their foreign investment attraction programs for successful outcomes.

3. Benefits Of FDI

As well as the direct impact on employment and wider economic benefits of FDI as follows:

• The introduction of new products and processes;

• Improved management practices;

• New technology and skills development; and

• Improved job quality

2. Australia is an attractive destination for foreign direct investment

Australia is seen as an attractive destination for foreign direct investment (FDI).
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