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Does foreign direct investment hinder or help economic development?

April 26, 2017Development Economic foreign help hinder Investment

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Does foreign direct investment hinder or help economic development?

1 Answer

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Posted

One of the requirements for economic development in a low-income economy is an increase in the nation’s stock of capital. A developing nation may increase the amount of capital in the domestic economy by encouraging foreign direct investment (FDI). (Foreign direct investment occurs when foreign firms either locate production plants in the domestic economy or acquire a substantial ownership position in a domestic firm.