How does foreign direct investment help development, Business Economics

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How does foreign direct investment (FDI) help development?

Foreign direct investment (FDI) shows an injection of resources in the economy. When those resources are used to raise productive capacity, in that case growth follows. Foreign direct investment that can take the form of as:

• Takeover of an less developed countries business

• Licensing production to an less developed countries business

• Joint venture with an existing less developed countries firm or

• Building a modern factory or office - a green field site.

FDI can assist along with:

• Structural improvement (industrialisation or enhanced services for example tourism),

• Provision of personnel or expertise and infrastructure funding.


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