International Business Environment
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4.Drawing from the experience of not more than 2 countries and on relevant theories, critically analyse extent to which developed and developing host countries benefit from FDI, and who the beneficiaries are.
Please write according to the following:
Introduction
-Globalization
-Definition of FDI
Benefits of FDI
– Positive impact of FDI :
ØOn economic growth (GDP), well bing
ØOn employment
ØOn balance payment (current account as well as capital account, reserves)
ØOn technology transfer (hard and soft technology)
ØCompetition
ØContribution to taxes
Theoretical argument
Direct impact theory
New growth theory
– Negative impact of FDI :
ØOn balance of payment
ØOn externalities – pollution, emergence of monopolies
ØSurvival of local firms
ØThreatening developing governments
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