Essay on Foreign Direct Investment ( Fdi )

1581 Words May 13th, 2016 7 Pages
A Foreign Direct Investment (FDI) generally means an investment made to acquire long-term interest in enterprises that operate outside of the economy of the investor. Open economies (like Bangladesh) with a vast workforce and good growth prospects gradually tend to attract larger amounts of foreign direct investment than closed, highly regulated economies. The third world countries are considered the best places for the investors for foreign direct investment. Foreign direct investment has become a popular as well as controversial issue in international economy. FDI generates economic benefits to the recipient countries through positive impacts on its economy resulting from physical capital formation, transfer of technologies and increased domestic completion.

Foreign Direct Investment:
Foreign direct investment (FDI) can be called an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. The Organization of Economic Cooperation and Development (OECD) define the control as owning 10% or more of the business. (UNCTAD, 2007) It is such is an investment made by a company or entity based in one country, into a company or entity based in another country. FDI is not just a transfer of ownership as it usually involves the transfer of factors which are complementary to capital, including management, technology and organizational skills. Political Economy of Foreign Direct Investment in Bangladesh:…

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