Mncs and the State

FDI and the effects on society.

Subject:

Developing countries (Economic aspects)

Foreign investments (Evaluation)

Authors:

Herman, Michelle

Chisholm, Darla

Leavell, Hadley

Pub Date:

01/01/2005

Publication:

Name: Journal of International Business Research Publisher: The DreamCatchers Group, LLC Audience: Academic Format: Magazine/Journal Subject: Business, international Copyright: COPYRIGHT 2005 The DreamCatchers Group, LLC ISSN: 1544-0222

Issue:

Date: Jan, 2005 Source Volume: 4 Source Issue: 1

Geographic:

Geographic Scope: United States Geographic Code: 0DEVE Developing Countries; 1USA United States

Accession Number:

166850560

Full Text:

ABSTRACT

The last decade has seen an explosion in Foreign Direct Investment (FDI) especially in developing countries, where the returns on investment can be higher than in developed countries. Both developing and developed countries have liberalized their policies and introduced new policies to attract FDI inflows. This increase in FDI has had major effects on the social welfare of the citizens of developing host-countries. The purpose of this paper is to examine both the positive and negative effects of FDI inflows to developing countries in areas of politics, society, technology, finance, environment and culture, to determine whether or not FDI contributes to the well-being of society. This paper also provides an overview of the current trends in FDI flows and the relationship between FDI, multinational corporations, and society.

INTRODUCTION

Foreign Direct Investment (FDI) is the single most important instrument for the globalization of the international economy. Defined, FDI is the investment of real assets in a foreign country; it is acquiring assets such as land and equipment in another, host country, but operating the facility from the home country. FDI is viewed by many as necessary to stimulate the economies of both developed and underdeveloped countries. It has even been suggested that FDI...