The importance of FDI (Foreign Direct Investment) in developing countries has grown over the past two decades, as many developing countries have successfully attracted large and increasing FDI. Economic theory has identified several channels through which FDI inflows can benefit host economies. However, the empirical literature needs to catch up and has more problems identifying […]
Direct Foreign Investment
Foreign Direct Investment (FDI) is an investment by one party in one country into a business or company in another country to create lasting benefits. Enduring interest distinguishes FDI from foreign portfolio investment, in which investors passively hold foreign securities. Foreign direct investment can be made by earning permanent interest or expanding the business abroad.