A Methodological Critique of Foreign Direct Investment in Development Countries

Many authors tried to clarify whether there is a direct connection between foreign direct investment (FDI) and economic growth of Gross Domestic Product (GDP), but we have not found any reliable procedures yet. Sharma (2008) tends to think that increasing investment in developing countries will have an impact on the economy, and similarly, if there is little or no foreign direct investment, it is considered that there is an effect of delaying growth I will. The first part of this article is trying to verify what other authors say, but articles on foreign direct investment and economic growth are limited, but if there is a positive or negative impact the second I will explain it in part.

In today's world economy, many developing countries are competing for foreign direct investment. Foreign direct investment is said to be an important factor in stimulating the development of the country. Foreign direct investment (FDI) is an important means of economic growth in emerging market countries. Since 2006/2007, Egypt has become a major attraction for Continental FDI. As of 2008, Egypt employed 14,169 workers and attracted 56 foreign-affiliated companies to the textile industry with total investment of $ 170 million and total production of $ 37.6 million.

It is an important development tool for attracting foreign direct investment (FDI) in both developed and developing countries. Most foreign investors attract industry sectors such as industrialized countries, large-scale technology intensive enterprises, banking, insurance, recent call centers and other services. For this reason, the question arises as to why companies should enter overseas and therefore choose to invest overseas as investors. The answer is that in order to maintain growth and profitability, these companies need to expand into new markets, maintain competitiveness, and expand production.

Foreign investment is a direct result of globalization. Foreign investment is always welcomed to provide resources, funds and technology to countries that support the economic development of host countries. This will improve employment either directly or indirectly. Increase exports to the country, thereby improving the current account and contributing to the repayment of external debt. However, this caused several criticisms that led to excessive foreign control (Kaitilia V and Kotilainen M., 2002).

The OECD countries - the Organization for Economic Cooperation and Development (OECD) - are seeing a significant increase in foreign direct investment, indicating that the OECD accounts for a certain percentage of such investment. In fact, most of the direct investment in developing countries is actually the result of investing in the OECD countries. Nonetheless, the OECD countries have not yet adopted a "multilateral agreement" on such investment. These types of investments can only be promoted and practiced by following the "guidelines" developed by the United Nations. The implementation policy of the EU's foreign direct investment is completely different from that of other countries. Most "treaties" and policies followed by EU member states hold "foreign direct investment". EU countries can not sign or negotiate only "multilateral" investment proposals. However, they can form separate "bilateral" investment advice