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For instance, Kirkpatrick, Parker and Zhang (2006) emphasize that, "FDI in infrastructure responds positively to an effective domestic regulatory framework. By implication, where regulatory institutions are weak and vulnerable to 'capture' by the government (or the private sector), foreign investors may be more reluctant to make a major commitment to large scale infrastructure projects in developing countries" (para. 1). A pattern of governmental involvement is apparent in varying degrees among the developing nations that have experienced the most significant economic growth as a result of foreign direct investment.
In an increasingly integrated global marketplace, it is apparent that increased trade will equate to increased economic growth but the level of growth will be directly related to how well developing nations are able to attract the finite amount of FDI that available.
Advantages of Foreign Direct Investment and International Trade
A distinct advantage of foreign direct investment is that it provides an investment framework for the economic development of a given country where the investment is being targeted, a factor that is particularly relevant for economically developing countries (Benefits of Foreign Direct Investment 2010).
The research showed that the adage, "a rising tide lifts all boats," has been particularly applicable to the trends noted in economic growth and its relationship to increased international trade and foreign direct investment by creating new jobs and opportunities for economic growth.
The last half of the 20th century was characterized...
In the process, investments in these formerly developing nations have facilitated their integration into the international community in other ways as well.
Because there is only so much foreign direct investment available at a given point in time to go around, countries that are able to attract large amounts of foreign direct investment in the future will likely outpace those that do not in economic growth.
Works Cited
"Benefits of Foreign Direct Investment," 2010. EconomyWatch. Retrieved from http://www.
economywatch.com/foreign-direct-investment/benefits.html.
de Mello, L.R. (2010). Department of Economics, University of Kent: Studies in economics.
Retrieved from http://ideas.repec.org/p/ukc/ukcedp/9701.html.
Kirkpatrick, C., Parker, D. & Zhang, Y.F., 2006. "Foreign direct investment in infrastructure
in developing countries: does regulation make a difference?" United Nations Conference
on Trade and Development. Retrieved from http://www.unctad.org/en/docs/iteiit
20061a6_en.pdf.
Kumar, Nagesh, John H. Dunning, Robert E. Lipsey, Jamuna P. Agarwal and Shujiro Urata.
Globalization, Foreign Direct Investment, and Technology Transfers: Impacts on and Prospects for Developing Countries. London: Routledge, 1999.
Works Cited
"Benefits of Foreign Direct Investment," 2010. EconomyWatch. Retrieved from http://www.
economywatch.com/foreign-direct-investment/benefits.html.
de Mello, L.R. (2010). Department of Economics, University of Kent: Studies in economics.
Retrieved from http://ideas.repec.org/p/ukc/ukcedp/9701.html.
on Trade and Development. Retrieved from http://www.unctad.org/en/docs/iteiit
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Foreign Direct Investment Project in South Africa South Africa is a largely free-market economy that encourages foreign investment in private and public sectors. The country is an attractive option for foreign direct investment since it has a transparent regulatory framework, political stability, easy access to raw materials, and a large population. Foreign direct investment (FDI) can be defined as investment made by a business organization or company based in one country
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