Foreign Direct Investment

Foreign Direct Investment (FDI) has long been a subject of interest. This
interest has been renewed in recent years due to the strong expansion of
world FDI flows recorded since the 1980s, an expansion that has made FDI
even more important than trade as a vehicle for international economic
integration. Given this fact, it should come as no surprise that a large number
of theoretical explanations as to the very existence of FDI have been
advanced over the years, with many studies focusing on the investigation of
the determinants of such investment. However, despite the abundance of
research, there is at present no universally accepted model of FDI, there is
still some confusion over what are the key factors capable of explaining a
country’s propensity to attract investment by multinational enterprises
(MNEs) and it is not yet clear how globalization is likely to influence the
determinants of, and motivations for, FDI. These unresolved issues are of
special importance to developing countries that now more than ever seek to
attract FDI to fuel economic growth.
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