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  • Advantages and Disadvantages of FDI

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    Lourdes Sabuero Tampus
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    Foreign direct investment (FDI) can stimulate economic development in developing countries by more closely integrating their economies into the global market and increasing both imports and exports. FDI also boosts human capital and infrastructure through job creation and training local workers, resulting in higher incomes and savings. However, FDI can sometimes hinder domestic investment by focusing resources outside the home country of the investor, and to support economic growth, FDI must adhere to economic and social standards while also complementing and crowding in domestic investments.

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    Foreign direct investment (FDI) can stimulate economic development in developing countries by more closely integrating their economies into the global market and increasing both imports and exports. FDI also boosts human capital and infrastructure through job creation and training local workers, resulting in higher incomes and savings. However, FDI can sometimes hinder domestic investment by focusing resources outside the home country of the investor, and to support economic growth, FDI must adhere to economic and social standards while also complementing and crowding in domestic investments.

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    Advantages and Disadvantages of FDI

    Uploaded by

    Lourdes Sabuero Tampus
    Foreign direct investment (FDI) can stimulate economic development in developing countries by more closely integrating their economies into the global market and increasing both imports and exports. FDI also boosts human capital and infrastructure through job creation and training local workers, resulting in higher incomes and savings. However, FDI can sometimes hinder domestic investment by focusing resources outside the home country of the investor, and to support economic growth, FDI must adhere to economic and social standards while also complementing and crowding in domestic investments.

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    Lourdes S.

    Tampus
    BA33
    Advantages and Disadvantages of FDI
    Increase research, development, and technology

     Economic Development Stimulation


    The primary trade-related advantage of FDI for developing nations is its lengthy
    contribution to closer economic integration of the host economy into the global economy, a
    process that is likely to increase both imports and exports. Foreign direct investment (FDI) can
    promote economic growth in the target country, improving the environment for both you as
    the investor and the local economy. More specifically, FDI boosts human capital and
    infrastructure by giving local people greater training and encouraging the creation of new jobs,
    which results in increased per capita earnings and household savings.
    MNCs Bring own management teams

     Hindrance to Domestic Investment.


    Foreign direct investment can occasionally impede domestic investment since it
    concentrates its resources elsewhere than the investor's native country. Inward foreign direct
    investments (FDI) must adhere to particular economic and social standards in order to support
    economic progress. FDI should support domestic investments in addition to improving the
    quality of education, technological advancement, financial growth, tax structure, trade and
    investment regulations, and market size (crowding in effect).

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