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Fdi Is Good As A Matter Of Fact

Decent Essays

Why FDI is [seems; should be] good
The research this material accounts for mainly focuses on the pros and cons of FDI regarding corporations more than host countries, like what are the factors that attract multinational’s investment, what are the risk of expropriation, the extent of the development of stock markets, and what is the linkage between democracy and foreign investment (Bekaert, Harvey, & Lundblad, 2011; Busse & Hefeker, 2007; Eichengreen et al., 2011; Li, 2009). Indeed, this specific research tells little about the host countries in this international flux of investment rather than distinguishing between developed and less-developed countries (LDCs).
Within this frame, the literature considered in this overview assumes that FDI is good as a matter of fact. As Jensen puts it, foreign investment “is an engine of employment, technological progress, productivity improvements, and ultimately economic growth. FDI provides both physical capital and employment possibilities that may not be available in the host market. More importantly, FDI is a mechanism of technology transfer between countries, particularly to the less-developed nations” (Jensen, 2003: 587; See also Li & Resnick, 2003). However, the empirical research seems to provide contradictory results (Greenaway & Kneller, 2007; Moran, Graham, & Blomström, 2005) or the outcomes are at least un-informative (Rodrik, 2012). Would be necessary also to take into account to what extent incentives and subsidies offered

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