FDIs have Positive Effect on Host Economy : Report
Added on -2020-07-22
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Table of ContentsINTRODUCTION...........................................................................................................................1FDIs have a positive effect on the economy of India & United Kingdom.................................1CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
INTRODUCTIONForeign Direct Investment (FDI) is the kind of investment which is done by theorganisation or organisations of one country with a motive to expand its business operations andincrease more and more revenue from it in another country. It helps in development of thenational economy of the host country eventually (Belloumi, 2014). In accordance with thiscontext, the following report will be based on the topic “FDIs have a positive effect on the hosteconomy” by shedding light on two economies. In the era of globalisation, businessorganisations are emerging rapidly and promulgating their business operations beyond theboundaries of nation.FDIs have a positive effect on the economy of India & United KingdomAccording to Pegkas, (2015) Foreign Direct Investment helps in the growth anddevelopment of the host country. The big corporations incorporating in different countries aid inproviding growth opportunities to the firms of another country. With the help of transferringupdated technologies in the host economy, the foreign direct investment helps in boosting up thedevelopment of the host economy. In developing economy like India, FDI is playing crucial rolein developing the economy of the country (Sbia, Shahbaz and Hamdi, 2014). The government ofIndia is welcoming the foreign brands in their economies so that productivity can be enlargedeffectively and efficiently. In various sectors, the government of India allowed 100% ForeignDirect Investment, such as pharmaceuticals sectors, retail sectors, etc. This helps in increase inemployment and quality of products delivered to the customers. Popescu, (2014) said that foreign direct investment transform the downfall in the hostcountry economies to upward directions. FDI influences the host country’s economic growththrough the transfer of new technologies and know-how, formation of human resources,integration in global markets, increase of competition, and firms’ development andreorganisation (Sbia, Shahbaz and Hamdi, 2014). Empirically, a variety of studies considers thatFDI generate economic growth in the host country. Omri, Nguyen and Rault, (2014) analysed theimpacts of FDI on the national economy of India and identified certain benefits that helps thecountry to increase their gains and revenue. Firstly, it helps in global integration between twoeconomies. In developing economy like India invites FDI and gain greater foothold in the worldeconomy by getting access to a wider global market. Secondly, it helps in development of thetechnologies. Foreign firms brings updated and hybrid technologies in India and provide host1
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