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Determining Factors of FDI inflow in a Country: A Theoretical Perspective

  • Unique Paper ID: 159009
  • Volume: 9
  • Issue: 11
  • PageNo: 167-174
  • Abstract:
  • Foreign direct investment (FDI) is an investment from a party in one country into a business or corporation in another country with the intention of establishing a lasting interest. A foreign direct investment can be made by obtaining a lasting interest or by expanding one’s business into a foreign country. This paper is discussing the theoretical exposition of FDI and it is divided into three sections, Section first discussing the motives and determinants of FDI. On the basis of orientation, most of the FDI motivations can be classified into four categories: Resource-Seeking, Market-Seeking, Efficiency-Seeking, and Strategic-Seeking. Section two identifies various determinants of FDI like Economic factors, Policy framework of FDI, Business facilitations and some others factors that play an important role as determinants of FDI like Macroeconomic Stability, Wages, Human Capital and Natural Resources, infrastructure (Roads, Water, Electricity, Telecommunications), labour cost, Geographical distance and Cultural differences. Section three discussing the impact of FDI, its depending on the nature of entry of FDI that is Greenfield FDI and Brownfield FDI.
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  • ISSN: 2349-6002
  • Volume: 9
  • Issue: 11
  • PageNo: 167-174

Determining Factors of FDI inflow in a Country: A Theoretical Perspective

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