Explore the costs and benefits of FDI in low income countries
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| Submitted: Thu Jul 11 2002
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Explore the costs and benefits of FDI in low income countries In this paper we are going to look at the costs and benefits of Foreign Direct Investment (FDI) in low-income countries. Since the 1980s there has been a dramatic increase of FDI into low-income countries. This has been as a result of greater interest in FDI as the world gradually integrates further, a process that we will refer to as globalisation. Let us quickly define what FDI is, FDI occurs when an investor based in one country (the home country) acquires an asset in another country (the host country) with the intent to manage that asset.1 The differentiation between FDI and a portfolio investment approach is slight but with portfolio management the parent firm would not take an interest in the running of the affiliate firm. We usually refer to the firms as either the "parent firm" (the investor) and the...

