Foreign Direct Investment (FDI) Quiz

Foreign Direct Investment (FDI)

• Inward Flow of FDI: Foreign direct investment coming into a country from external sources.

• Outward Flow of FDI: Domestic investment directed outward to foreign markets outside the home country.

• Inward Stock of FDI: Total accumulated value of foreign direct investment in a specific country over time.

• Outward Stock of FDI: Total accumulated value of a country's direct investment in other countries over time.

Benefits of FDI for the Host Economy

• Employment Generation: FDI creates new job opportunities in the host country.
• Technology Transfer and Knowledge Spillovers: FDI brings in new technologies, skills, and expertise, contributing to knowledge spillovers.
• Economic Growth and Development: FDI stimulates economic growth and development by increasing capital investment and output.
• Increased Productivity and Competitiveness: FDI leads to increased productivity and competitiveness in the host country.
• Access to New Markets and Global Networks: FDI provides access to new markets and global networks, enhancing the host country's trade connections.

Costs of FDI for the Host Economy

• Potential Negative Consequences: FDI may lead to job displacement, exploitation of natural resources, and cultural homogenization in the host country.