Foreign Direct Investment (FDI)

Paper Summary:

This paper explains that foreign direct investment FDI is considered a strong economic force within developed countries because, as opposed to developing countries, most developed countries do not have to cultivate interest in direct investment. The author points out that the paper focuses on how, why and to what extent the functionality of FDI within developed countries characterizes the economic behavior within the recipient economy. The paper relates that the literature demonstrates that, while FDI has a marginal positive impact on growth and a significant impact on economic security, the repercussions of FDI within developed countries tend to be by influencing political connections between nations and the subsequent emphasis on maintaining their economic obligations.

From the Paper:

"Foreign direct investment (FDI) is considered a strong economic force within developed countries. As opposed to developing countries, most developed countries do not have to cultivate interest in direct investment (Forf, 2000). This creates a focus on how, why, and to what extent the functionality of FDI within developed countries characterizes the economic behavior within the recipient economy (Shatz & Venables, 2004). The literature demonstrates that while FDI has a marginal positive impact on growth and a significant impact on economic security, the repercussions of FDI within developed countries tend to be within influencing political connections between nations and the subsequent emphasis on maintaining economic obligations therein."

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