The Impact of Foreign Direct Investment (FDI) on Emerging Markets
The Impact of Foreign Direct Investment (FDI) on Emerging Markets

Author(s): Nikol Georgieva
Subject(s): Politics / Political Sciences, Politics, Economy, National Economy, Supranational / Global Economy, Business Economy / Management, Economic policy, Socio-Economic Research
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Foreign Direct Investment; emerging markets; multinational corporations; risk management; economic growth
Summary/Abstract: In emerging markets, Foreign Direct Investment (FDI) plays a vital role in framing the budgetary and monetary structure. The paper examines the dual impact of FDI for these economies; how they have reaped benefits— in terms of technological advancement, employment generation and creation/improvement of infrastructure — but also faced challenges such as political instability, exchange rate volatility, domestic ownership over key sectors. Taking inspiration from the growth stories of China (manufacturing), India (IT) and 5 other regions including Brazil that thrived on their resource endowment; this research explores how multinational corporations (MNCs) adopt when entering emerging markets. It highlights the risks across exchange, political risk and regulatory lines. the paper concludes by offering recommendations for optimizing FDI inflows to benefit both MNCs and host countries.

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