The Relative Costs and Benefits of Foreign Direct Investment (FDI) on a Host Country

Foreign direct investment (FDI) plays an important role in the modern world and global companies. It helps Third World countries solve problems by sharing resources with other countries in exchange for investment. A more formal foreign direct investment is defined as a company's investment in a country to another country called host country. Recently, due to rapid growth and a worldwide alternative investment model, this definition has evolved to include the acquisition of a permanent management interest in companies outside the country where the company or investment company is located.

Foreign direct investment (FDI) has a lot of influence on the receiving economy. Financial injections from overseas will certainly have a positive impact on the economy, but they may also have some impact on the baby industry. This research highlights the impact of foreign direct investment. After the Second World War, the world of foreign direct investment was dominated by the United States. When resources were lost during wartime, the world was damaged and economic performance declined. The United States explains the latest strategy of foreign direct investment in foreign investment. It occurred mainly between 1945 and 1960. Since then, foreign direct investment has become a phenomenon of world communication.

When a company adopts Foreign Direct Investment (FDI), it becomes a multinational company and multinational companies receive large amounts of direct investment abroad. Foreign direct investment (FDI) refers to the long-term participation between foreign countries and recipient countries, such as management, partnership, technology transfer. Foreign direct investment has become an important acceptance of the world economy, many countries have relaxed restrictions on foreign direct investment, and many recipient countries have reduced trade barriers of foreign companies operating in their own country.

The research found that foreign direct investment has changed the industrial structure of the country and the flow of trade. Foreign direct investment helps recipient countries to cut costs and promote exports with the latest technology. Foreign direct investment (FDI) also provides financial resources for host country investment. On the other hand, it provides a foreign exchange that has a positive impact on the trade balance. Indeed, since the debt crisis, foreign direct investment has been regarded as an increasingly important source of income for developing countries (Goldar and Ishigami, 1999).