The development of direct investment in the international economy Cover Image

Evolutia investiţiilor straine directe în economia internationala
The development of direct investment in the international economy

Author(s): Delia Lenghel
Subject(s): Politics / Political Sciences, Social Sciences, Economy, Essay|Book Review |Scientific Life
Published by: Centrul de Strategii Aplicate
Keywords: foreign investments; development; emerging economies; technology; capital

Summary/Abstract: A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is distinguished from a foreign portfolio investment by a notion of direct control by the element of control that is sought.Foreign direct investment is critical for developing and emerging market countries and it benefits the global economy, as well as investors and recipients.However, the fundamental question underlying FDI activities is always this: Why is an investor willing to acquire a foreign firm or build a new factory abroad? Because FDI includes technology and know‐how as well as foreign capital, it came to be seen during this stage as an engine of growth, almost guaranteed to boost the host country’s development.In pursuit of all these potential externalities, governments in many developed and developing countries have, over several decades, substantially reduced barriers to foreign direct investment and offered special incentives to attract foreign firms and foster relationships between multinational enterprises and local firms.

  • Issue Year: 2018
  • Issue No: 10
  • Page Range: 72-82
  • Page Count: 11
  • Language: Romanian