Foreign Direct Investment Influence on Economic Growth

Topic

Does Foreign Direct Investment Influence Economic Growth In Rapidly Growing Economies? An Examination of China and UK

Instructions

Write a 10-page essay on the topic using Harvard format.

Answer preview

Foreign Direct investment (FDI) refers to the type of business investment by an individual from a different country for which the foreign investor has control of the purchased company, with a 10% or more control of the business. The businesses involved in foreign direct investment are usually referred to as multinational enterprises or multinational corporations.  A multinational company may engage in a direct investment by developing a new foreign corporation or acquiring an already established foreign business (OECD Benchmark Definition of Foreign Direct Investment, 2008). While the United Kingdom is one of the most developed economies in the world, China has been one of the fastest developing economies in the world. The proposed study will establish the role of the foreign direct investment in the economic growth of the rapidly growing economies of China and UK. FDI is also credited with the facilitation of Chinese economic transition towards the market system which was begun in earlier years. The introduction of institutional frameworks and introduction of changes in the structure of business ownerships from public to private ownerships through privatization, the FDI stimulated the economy to move toward a market-oriented economy.

Word count: 3281