In recent years, Foreign Direct Investment (FDI)
has evolved as a vital resource for the economic
development of developed, developing and under
developed countries. FDI usually takes form of
capital inflows, plants and machineries, know-how,
technology and occasionally market access, too.
Some of the driving forces and determinants of FDI
are the size of market, future growth prospects,
productivity of labor, availability of infrastructure,
political environment, and issues related to
corporate governance, investors’ interests and tax
laws etc.
Among all, the developing and the under
developed countries are the highest to benefit from
the FDI flows. The article initially makes an attempt
to study the global and regional trends in FDI and later moves on to prominent players such as China,
US, UK, India etc.
Post 1990s there has been an uptrend in FDI flows, since most of the countries joined hands in
adoption of microeconomic and structural reforms. There was a declining trend observed in FDI in the
year 2001 that continued till 2003. While FDI in the developed countries unrelentingly declined in the
year 2003, there were signs of looming revival. Before the year 2004, it was only in 2000, when the
global economy was bullish with FDI inflows of US $ 1,387,953 mn.
In a recent press release United Nations Conference on Trade and Development (UNCTAD) stated
that the FDI flows for the year 2004 have risen to US $ 612 bn from US $ 580 bn in the year 2003.
The developing countries attracted FDI inflow of US $ 255 bn in the year 2004, in comparison to US
$173 bn in 2003. |
