Foreign Direct Investment - 1674 Words

Introduction: Foreign Direct Investment, or FDI, is a type of investment that involves the injection of foreign funds into an enterprise that operates in a different country of origin from the investor† (economy watch). The determinants of foreign direct investment may be the socio-economic, financial and the cultural factors which usually have positive and negative effect on the foreign direct investment. The risk is attached to the determinants of foreign direct investment. This paper examines the major determinants of foreign direct investment exchange rate, market size, political instability, infrastructure, openness to market and military rule. Data constraints in Pakistan some determinants consider to be the inefficient. Regardless†¦show more content†¦The main determinants are openness to trade and political stability in the study. The results show that FDI stimulates the economic growth but growth does not attract the foreign direct investment. In fact the openness trade and political stability are the significant determinants. This study is done Aqeel and Nishat (2004).They analysis FDI flow is well documented in literature for the both developing and developed countries .The main determinants are used income level, infrastructure political and macro stability. The co-integration and error correction technique is applied to check the stationarity. The data is collected annual from 1961—2003 to SBP from the assets and liabilities and foreign investment and exchange rate is from international finance statistic published by Federal Bereau Statistics. The study considers exchange rate, tax rate, variables if they explain the inflow of foreign direct investment. Also included are wages and GDP to check the test the relative demand for labor and market size. All variables indicated correct signs and are statistically significant except for wage rate. The study clearly emphasizes the role of these policy variables in attracting FDI and determining its growth in both short and long run in Pakistan. The study shows that FDI has positive impact in Pakistan. One of the studies is done by the Dar et al (2003). This study summaries the long term relationship between FDI and Economic Growth. It givesShow MoreRelatedForeign Direct Investment Theories And Foreign Investment1950 Words   |  8 PagesREPORT FOREIGN DIRECT INVESTMENT THEORIES AND FOREIGN INVESTMENT IN LITHUANIA MODULE LEADER: CHUNXIA JIANG STUDENT NAME: MANTVYDAS NARUSEVICIUS STUDENT NUMBER: M00509351 22/04/2016 CONTENTS PAGE PAGE 3. Foreign direct investment PAGE 3. Foreign direct investment theories PAGE 4. Cost and benefits of FDI for the host country PAGE 5-6-7. FDI in Lithuania according to World Bank data PAGE 8. References Foreign direct investment (FDI)Read MoreForeign Direct Investment Essay621 Words   |  3 Pagesï » ¿Foreign Direct Investment Definition: An investment made by a company or entity based in one country, into a company or entity based in another country. Foreign direct investment has many forms. Broadly, foreign direct investment includes mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra-company loans. Advantages of Foreign Direct Investment: 1- Develop Country: One of the primary benefits of foreign direct investment is thatRead MoreForeign Direct Investment Into Pakistan977 Words   |  4 PagesTitle: Causes of Foreign direct investment into Pakistan. Aim and objectives: The dissertation topic will focus on the importance of foreign direct investment into Pakistan’s Economy and will also focus around the causes of foreign direct investment. The report will look into three different perspectives such as, the effects on FDI pre and post 9/11, investment in different sectors of industry and the importance of investing countries in terms of contributing towards developing Pakistan’s infrastructureRead MoreResearch On Foreign Direct Investment1242 Words   |  5 Pagesdecided to introduce a contingent set of initiatives corresponding to â€Å"Foreign Direct Investment† in Ethiopia. There has been a considerable rise of FDI opportunities recently within Ethiopia. The following document will discuss; cultural, political, as well as economic trends and patterns that influenced our outlook on FDI into Ethiopia. Moreover, this memo will analyze the potential risks and or barriers to entry, foreign firms could encounter when attempting FDI to Ethiopia. Lastly, our teamRead MoreForeign Direct Investment ( Fdi )1557 Words   |  7 PagesNations came together and eliminated trade barriers, which enabled Corporation’s to begin foreign direct investment (FDI) in other nations. This resulted, corporations transform into Multinational Enterprises. The movie â€Å"The Grand Seduction† shows the powerful impact FDI’s can have for an economy. This essay will analyze the movie and the following statement â€Å"The attraction and retention of foreign direct investment (FDI) is a complex and multifaceted activity for a number of different stakeholders†Read MoreForeign Direct Investment Essay530 Words   |  3 PagesShenkar and Luo (2007) define foreign direct investment as the â€Å"direct investment in real or physical assets such factories and facilities in a foreign country (Shenkar and Luo, 2007 pp 553). There are two types of FDI; vertical or horizontal which may have benefits both the hom e and host countries. No doubt there are many benefits of FDI however, literatures often time highlight the ramifications of FDI on the host countries. Herman, Chisholm and Leavell (2004) underline the social impact on theRead MoreForeign Direct Investment ( Fdi ) Essay1041 Words   |  5 PagesForeign Direct Investment (FDI) is defined as an investment made by individuals in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company. The key feature of foreign direct investment is that it is an investment that establishes either a majority of control or an influence on the decision making of a business. Based on the graph belowRead MoreIntroduction Of A Foreign Direct Investment2094 Words   |  9 PagesRECOMMENDATIONS ïÆ'Ëœ CONCLUSION ïÆ'Ëœ REFRENCES INTRODUCTION A Foreign Direct Investment is basically an ownership in a business in a country by a totally different country. Foreign Direct Investment (FDI) plays a very important role in the development of a nation. All countries need FDI’s but in the case of underdeveloped or developing nations FDI is one of the most important aspect, as this kind of investment is required to help sustain the growth of the economy. This inturn helps improvingRead MoreForeign Direct Investment ( Fdi )5695 Words   |  23 PagesCHAPTER 1 INTRODUCTION 1.1 BACKGROUND OF THE STUDY Foreign Direct Investment (FDI) is one of the biggest tools for international economic integrations. Firms view overseas expansion as a necessary step to achieve a more effective access in the markets where they presently have low representation as stated by Tyu T. and Zhang M. M. (2007). In order to take advantage of the aggregate economies offered by the blooming innovative environment in that particular region, firms of course will investRead MoreForeign Direct Investment ( Fdi )5393 Words   |  22 PagesDefinition of Foreign Direct Investment (FDI) Foreign Direct Investment, popularly known by its acronym FDI, is a particular type of foreign capital, as opposed to domestic investment. In general, FDI is refers as a long-term investment by a foreign direct investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. According to Fu (2000), he argues that it does not include loan capital provided by international organizations, foreign government,