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Abstract
The issue of Foreign Direct Investment (FDI) has been receiving phenomenal attention from many governments. Bangladesh is not lagging behind from it. Economic development for the developing countries like Bangladesh is largely dependent on FDI. The major challenges for the host country are to ensure an eye-catching and conducive investment climate to foreign investors for FDI inflow. In recent years, Bangladesh has been devoting efforts for attracting FDI offering a lot of lucrative incentives and benefits. Though attempts taken to increase FDI inflow, the result achieved is not
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In this context the aim of this paper was to find out the determinants, impediments, favorable environment and potential of FDI for Bangladesh. Less developed infrastructure of Bangladesh is vital problem for FDI inflows. The trend of foreign investors goes in infrastructural investment such as electricity, fuel, air and sea communication.
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Literature Review
2.1 Methodology
This paper is fully based on secondary information. Content Analysis Method, which is commonly known as the review of the previous literature, has been followed in the preparation of this article. Apart from that secondary information have been collected from the statistics Department of Bangladesh Bank, Investment Handbook of Bangladesh Board of Investment, Bangladesh Economic Review 2006 and Bangladesh Bank’s Annual Report 2006. Some information has also been collected from the daily newspapers and Internet sources. Used data has been presented through tabular and graphical analysis.
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Main Body
3.0 Determinent of Foreign Direct Investment
Arguments supporting FDI in developing countries suggest that recipient countries need to fulfill some preconditions to create a favorable business environment. It has certain advantages to both the host country and the investor. Host countries’ macroeconomic policy, tax regime, regulatory practices are critical determinants for attracting FDI.
Ajami and BarNiv (1984) attempted to explain the variability of FDI across countries. They emphasized in following determinants of FDI in US: relative size of the US market, change in exports to the US, growth of GNP in the home and host countries, decline in value of the US dollar during the late 1970s, inflation rates in the home and host countries, attractiveness of the US capital markets and research and development and manufacturing as a percent of GNP.
The Foreign Direct Investment is stimulated by diverse macroeconomic factors such as the GDP, GDP per capita and also by the political stability of a country. The US is the country, which receives the more FDI in the world; even tough some other countries recently have increased their FDI considerably in term of growth. The overall quality of the infrastructure in the US
Foreign Direct Investment refers to the type of investment into a country that is characterized by the inflow of funds from a foreign source that can be in the form of ownership such as stocks, bonds, infrastructural presence, etc. by the element of ‘control’. FDI is defined as the net inflows of investment to acquire a management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.
Many scholars argue inward FDI have positive economic impacts on the host country (Buckley et al., 2007; Globerman, 1979; Lipsey and Sjöholm, 2004; Nguyen and Nguyen, 2007; Zhu and Tan, 2000). According to them, there is a causal relationship between FDI and economic growth, where FDI stimulates economic growth. Nguyen and Nguyen (2007) state FDI promotes economic growth and is also a tool to attract FDI. The literature by Anwar and Sun (2011) shows FDI and domestic capital have a significant positive impact on economic growth. Thus, FDI has a positive impact on the economic growth of the host country.
This aim of this essay is to evaluate the impact of institutional factors on outward and inward FDI. This will be done by determination of the major FDI (Foreign Direct Investment) factors, evaluation of the role of institutional factors and investigation of institutional factors impact on inward and outward FDI flows.
FDI in a developing economy means the development of the entire national economy on a grand scale, benefiting several other support industries, development of the country 's infrastructure, raising standards of living and increasing per capita income. World-leading manufacturers on
To attract FDI, corporate tax incentives has been used worldwide, as FDI significantly boost up the productivity and the growth of economic. The reason why China has become the most attractive destination of FDI is that its FDI policies, huge labour supply and low cost of it, stable economic and political environment. (Deng et al., 2007). FDI inflows into China
In this 21st century, we live in a time like no other. The world has transformed as a result of globalization. Globalization has made it possible for individuals who wake up in east, to end their day in the other part of the world. Nations came together and eliminated trade barriers, which enabled Corporation’s to begin foreign direct investment (FDI) in other nations. This resulted, corporations transform into Multinational Enterprises. The movie “The Grand Seduction” shows the powerful impact FDI’s can have for an economy. This essay will analyze the movie and the following statement “The attraction and retention of foreign direct investment (FDI) is a complex and multifaceted activity for a number of different stakeholders”. This essay
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Foreign direct investment plays a critical role in financing the development of emerging economies. Foreign direct investment benefits countries through a transfer of resources in the form of capital, technology, management of resources, creation of work opportunities, and a positive impact on the country’s balance sheet, typically through an increase in export volumes. These benefits are essential for sustainable growth and development of a country, especially for developing countries. Despite the important role that foreign direct investment plays in helping to achieve the Sustainable Development Goals, many developing countries face challenges in accessing this source.
A business will always look for new ways to profit – its success is dependent on how well it can attract growth and keep the profits flowing. One of the modern ways of increasing profits is conducted through foreign direct investment (FDI). What is about and how can it provide profits to businesses? Here’s a look at the modern phenomena and the advantages businesses can enjoy from engagement.
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According to Sanderatne N. (2011), there are many conditions that have to be put in place to attract FDI. It is important to ensure an attractive investment climate. Consistent macroeconomic policies, good governance, economic stability, guarantee of property rights, rule of law and absence of corruption are among the conditions required to attract FDI. Consistency and predictability in economic policies and political stability are preconditions to attract FDI. FDI is one of the three types of foreign investment instead of portfolio investment and foreign loans. These FDI in
The title of this report is “FDI by FDI”, which was phrased by the new prime minister of India, Mr.