Important Impact of Fdi on Australian Economy

Deardorff (2001) stated that, direct foreign investments refer to the particular countries and kinds of countries toward which a country's exports are sent, and from which its imports are brought, in contrast to the commodity composition of its exports and imports. Besides, direct foreign investments also can be defined as the situation in which a foreign investor owns10% or more of the ordinary shares or voting power of a local company. Thus, the pattern that the direct foreign investments follow is that of a bilateral trade.

Statistical and empirical analysis is something that is very valuable despite the application and system in question. This is true when the variables and facts are fairly straightforward and simple and it also holds true when the systems involved are very complex and large in nature. The latter is clearly the case when it comes to the impact and result of direct foreign investment in a given country. Such will be the point of empirical analysis for this report and the country that shall be used for the

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)

Miao Wang (2010), “Foreign direct investment and domestic investment in the host country: evidence from panel study”, Applied Economics, 42, pp. 3711-3721 [Online] Available at: http://ehis.ebscohost.com.ezproxy.liv.ac.uk/eds/detail?vid=4&hid=3&sid=d270c6f2-d2fd-483c-8224-564af5d207e7%40sessionmgr110&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d# (Accessed on 13 November 2012)

Foreign direct investment (FDI) is investment that gains control of the foreign business or assets. It is a method of international expansion that gets a controlling interest in property, assets or companies located in other countries. FDI can also involve a business controlling resources such as mineral deposits, land and other assets in other countries. This form international expansion involves a higher level of commitment by the business because it usually involves a transfer of money, personnel and technology.

The Foreign Direct Investment (FDI): is to invest and build new business in other country (Wild, 2015 ). OECD defines FDI as a key factor of enhancing and promoting the development of economy and stability of the country in the political and financial sector to improve the society as a whole (OECD , 20). Moreover, The UNCTAD explains the FDI by mentioning it as a relationship between two companies which means one company is going to do business in the other company as an investment (UNCTAD, 2007). It is making a new business, investment or company in a foreign country.

Foreign direct investment has many forms. Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra-company loans".

Foreign direct investment (FDI) is taken as one of the key factor of rapid economic growth and development. FDI, it is believed to stimulate domestic investment, human capital, and transfers technology. It is associated qualities which causes the faster economic development in the host countries. South Korea, for instance had one of the of the poorest economies during 1960s, but yet

To extract raw materials To find low cost sources of labor, components, parts, or finished goods To penetrate new markets, the major motivation

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.

Foreign direct investment, according to the OECD definition, means an investment made ​​by a resident of one country (the direct investor) in order to achieve long-term benefits of capital employed in the company - a resident of another country (called the direct investment enterprise). Usually, foreign investment in many ways have a positive impact on the economy of the country in which they occur. The introduction of new technologies leads to the modernization of production and increase the level and the adaptation of new methods of management and organization improves the functioning of the company. Companies with foreign capital play an important role in the reconstruction and modernization of the

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.

To understand foreign direct investment we should determine the main motivations causing a firm to invest in other countries rather than export or subcontract production. Therefore, the main aim of this paper is to emphasize- based on an econometric analysis using data for Romania for a period of 23 years- the fundamental determinants of foreign direct investments attractiveness.

FDI is an investment made by a company or entity based in one country, into a company or entity based in another country. Foreign direct investment is one of the most effective tools in the fight against poverty and unemployment. It is measured as the inward stock percentage of GDP.

Economists believe that Foreign Direct Investments is an essential part of economic evolution in every country. There are many academic papers that attempt to assess FDI aspects. Despite many researchers have tried to give an accurate explanation to FDI, there is no comprehensively approved theory. FDI motivations have been mainly researched by John Dunning, Stephen Hymer, Raymond Vernon, etc.