International Business Strategy Research

This research paper discusses the impact of foreign direct investment (FDI) on economic development and progress. It emphasizes the importance of having a proper roadmap for FDI and highlights the lessons that can be learned from China's joint venture model. The paper also explores the limitations and future research directions for FDI.

Running head: INTERNATIONAL BUSINESS STRATEGY RESEARCH
International Business Strategy Research
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INTERNATIONAL BUSINESS STRATEGY RESEARCH
Contents
Discussion and conclusion:..............................................................................................................2
Limitations and future research directions:.....................................................................................2
References:......................................................................................................................................4

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INTERNATIONAL BUSINESS STRATEGY RESEARCH
Discussion and conclusion:
The impact of foreign direct investment (FDI) would finally depend on the ability of a
country to attract FDI and on its ability of making optimum use of such investment in the
economic development and progress. It is essential to have a proper road map as to how the FDI
shall be used to ensure economic development and progress. Without a clear roadmap it could be
counter-productive for an economy1. As already mentioned earlier that the method used by China
to attract FDI and make effective use of such investment to the economic development of the
country is a great lesson for other developing countries. Use of joint ventures model to keep the
control within the country and making optimum use of FDI will help an economy to grow and
proper whereas FDI without any control could create negative economic issues such as
interference and control by a foreign country in the economic matters of a country.
In a globalized world where the international boundaries have been blurred for the purpose of
economic progress and development use of FDI is one of the most effective ways to improve not
only the financial and economic conditions of countries but also the political relationships.
However, a proper strategy must be there in order to make effective use of FDI instead of a
haphazard planning just for the sake of FDI2.
Limitations and future research directions:
Availability of proper information while conducting the detailed discussion on the topic
is one of the most difficult tasks in the research. Specifically considering the level of information
1 Jones, Jonathan, and Colin Wren. Foreign direct investment and the regional economy.
Routledge, 2016.
2 Iamsiraroj, Sasi. "The foreign direct investment–economic growth nexus." International Review
of Economics & Finance42 (2016) 121.

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INTERNATIONAL BUSINESS STRATEGY RESEARCH
scanning that takes place in a country like China finding correct information to evaluate the
impact of FDI on the economy over the years is certainly one of the limitations of the research.
The world is changing faster than can be imagined and economic and financial decisions by
countries have to be taken quicker and faster. However, decisions such as FDI should not be
taken in haphazard manner as already described earlier. In order to extract maximum benefit
from FDI each and every aspects of FDI should be evaluated3.
In future research the focus should be more on collecting as much information as possible from
different countries to evaluate the actual implications of FDI on the economic development and
progress. Only if proper and correct information on the subject is available it would be possible
to evaluate the actual impact of FDI on the economy of different countries. Apart from that the
impact of other micro and macro-economic factors on FDI and attracting such investments in the
countries should be investigated and evaluated. Historical data since the implementation of
globalization and use of FDI in different countries shall be analysed to come to a particular
assertions. Finally, the overall economic development and progress of FDI must be evaluated by
considering the political, economic, social, technological, legal and environmental factors of
different countries4.
3 Blomstrom, Magnus. Foreign Investment and Spillovers (Routledge Revivals). Routledge,
2014.
4 Penrose, Edith Tilton. "Foreign Investment and the Growth of the Firm 1." In International
Business, pp. 41 Routledge, 2017.

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INTERNATIONAL BUSINESS STRATEGY RESEARCH
References:
Blomstrom, Magnus. Foreign Investment and Spillovers (Routledge Revivals). Routledge, 2014.
Iamsiraroj, Sasi. "The foreign direct investment–economic growth nexus." International Review
of Economics & Finance42 (2016). Available at:
https://www.sciencedirect.com/science/article/pii/S105905601500194X [Accessed on 31
October 2018]
Jones, Jonathan, and Colin Wren. Foreign direct investment and the regional economy.
Routledge, 2016.
Penrose, Edith Tilton. "Foreign Investment and the Growth of the Firm 1." In International
Business. Routledge, 2017.