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ADVANTAGES OF FOREIGN DIRECT INVESTMENT

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ADVANTAGES OF FOREIGN DIRECT INVESTMENT
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Sunanda K. Chavan
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ADVANTAGES OF FOREIGN DIRECT INVESTMENT - October 8th, 2010

Private foreign investment plays an important role in the economic development of the recipient countries.

1. Private foreign investment goes directly into capital formation and thus it constitutes a net addition to investible resources in the recipient country. Thus it helps in pushing up the rate of growth of the economy.

2. Being subject to business calculation of private profit it is likely to be employed more productively as compared to public financial aid.

3. Foreign investment may also induce more domestic investment. For instance, ancillary domestic units can be set up to ‘feed’ the main industrial unit set by the foreign investor.

4. By setting an example, and through the training that they sponsor, foreign direct investments contribute to the transfer of technology to the underdeveloped countries and in encouraging the growth of skills.

5. Since returns on foreign are linked to the profits earned by the firm, it is more ‘flexible’ as compared to foreign loans which are guided by rigid interest and other requirements.
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Re: ADVANTAGES OF FOREIGN DIRECT INVESTMENT - July 7th, 2015

DEFINITION of 'Foreign Direct Investment - FDI'


According to Investopedia, an investment made by a company or entity based in one country, into a company or entity based in another country. Foreign direct investments differ substantially from indirect investments such as portfolio flows, wherein overseas institutions invest in equities listed on a nation's stock exchange. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies.
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Rose Marry
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Re: ADVANTAGES OF FOREIGN DIRECT INVESTMENT - April 21st, 2016

Quote:
Originally Posted by sunandaC View Post
Private foreign investment plays an important role in the economic development of the recipient countries.

1. Private foreign investment goes directly into capital formation and thus it constitutes a net addition to investible resources in the recipient country. Thus it helps in pushing up the rate of growth of the economy.

2. Being subject to business calculation of private profit it is likely to be employed more productively as compared to public financial aid.

3. Foreign investment may also induce more domestic investment. For instance, ancillary domestic units can be set up to ‘feed’ the main industrial unit set by the foreign investor.

4. By setting an example, and through the training that they sponsor, foreign direct investments contribute to the transfer of technology to the underdeveloped countries and in encouraging the growth of skills.

5. Since returns on foreign are linked to the profits earned by the firm, it is more ‘flexible’ as compared to foreign loans which are guided by rigid interest and other requirements.
Hey sunanda,

Here I am up-loading Advantages and Disadvantages of FDI Policy, please check attachment below.
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File Type: pdf Advantages and Disadvantages of FDI Policy.pdf (836.0 KB, 0 views)
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