gb9 - Realities of Foreign Direct Investment Politics play...

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Realities of Foreign Direct Investment Politics play a major role in foreign direct investment. In generally, there are three competing views of foreign direct investment: 1. The radical view: Holds that countries should actively avoid inflows of foreign direct investment. According to this view, foreign direct investment is a tool of imperial oppression and exploitation, and governments should nationalize MNE assets whenever possible. 2. Pragmatic nationalism: A middle-of-the-road approach that takes into account the benefits and drawbacks of foreign direct investment. 3. Free market view: Holds that countries should actively promote inflows of foreign direct investment. According to this view, foreign direct investment is a win-win for the host country and the home country alike. Benefits and Drawbacks of Foreign Direct Investment Benefits of FDI to host countries (recipients of FDI): 1. Improved balance of payments: improves due to capital inflow 2. Technology spillover: An inflow of foreign technology
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This note was uploaded on 02/06/2011 for the course GEB 3373 taught by Professor Crum during the Spring '10 term at University of Florida.

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gb9 - Realities of Foreign Direct Investment Politics play...

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