The motives of developing countries' foreign direct investment

The Motives of Developing Countries’ Foreign Direct Investment Student’s Name Institutional Affiliation The Motives of Developing Countries’ Foreign Direct Investment
Developing countries have been relying on the economies of the developed and industrialised countries for their financial survival since early ages. However, in the last two decades, the economy has continually globalised through the capital markets and the liberalisation of global trading (Blomström & Mucchielli, 2003). Besides, globalisation has been enhanced by the exchange of administrations and merchandise through the advances in technology and the development of internalisation of corporate circulation and creation. The developing countries are currently more powerful and imperative since the number of these countries that are getting involved in international trade and participating in the global market has continued to expand.
To obtain some level of management control, the purchases of various assets such as stocks or physical infrastructure are made from foreign capital, and this is referred to as Foreign Direct Investment (Blomström & Mucchielli, 2003). In Today’s world, the developing countries have a started having a strong effect on the economy of the world especially on their economies and on the industrialised economy. Usually, this is achieved through FDI that is delivered by multinational enterprises. FDI has a critical role that it plays in the advancement of worldwide monetary. This paper will mainly focus on the impact of FDI on developing countries.
In spite of globalisation, the role of FDI in economic development remains the same. However, there have been many changes in the dynamics and mechanisms of FDI-assisted establishments (Buckley, 1989). There are bigger variations in the types of FDI and the advantages that each offers as well as the manner in which they participate and interact with the host economy. Sanjaya attempts to analyse the responsibilities of multinational enterprises in the development of industries in the perspective of learning systems. Besides, they analyse and expound on the policy tools that are available for using FDI for the development of the economy.
The attitude around foreign direct investment has changed over the years since most countries have managed to liberalise their policies to attract investment from other foreign multinational enterprises. The expectation is that these foreign multinational corporations/enterprises will help curb the problem of unemployment, raise tax revenue and exports (Buckley, 1989). Or even that some of the insight brought by the foreign companies may remain or spill over to the host country’s government, domestic firms as well as across the world. Most of these developing countries have in return lowered the various entry barriers and have now opened up new sectors to allow foreign investment. A huge number of host governments also offer some various forms of incentives on investments to encourage the foreign-owned business to continue investing in their jurisdiction. Some of this incentive includes fiscal incentive such as lower taxes for foreign investors as well as tax holidays. Also, there are more financial incent...