INTRODUCTION TO FOREIGN DIRECT INVESTMENTS (FDI)
New sources of FDI are emerging among developing and transition economies. Foreign Direct Investment is one of the most important forms of international capital flows. FDI has been growing steadily in its importance, relative to other forms of international investment, for the last 30 years and has accounted for about three quarters of total International Capital Flows from 1998 to 2003. (World Investments, 2006 [Online]) Particularly for developing countries, FDI has been the most important source of foreign investment and an important source of technological spillovers.
Despite the fact that over the past three decades, the rate of growth in the number of studies devoted to FDI has probably surpassed that of the FDI itself, the number of issues in the area that require economic analysis does not seem to be decreasing. But from last couple of year's developing countries or economies are also investing as Outward Foreign Direct Investment in other developing countries or developed countries for example Asian developing countries such as India and China etc. are now investing their projects in developing countries as well as in developed countries.
These Asian countries are attracting lots of foreign direct investment on availability of their resources such as low cost labour, cheap material etc. From last couple of years Ireland has also attracted foreign direct investment because of their resources and the taxation policy which is only 12.5%. ( FDI Introduction, 2001. [Online])
How is FDI affected by the growth of newly created assets in emerging markets? How is the advent of electronic commerce likely to change the patterns of competitive advantage of firms and locational advantage of ...