Foreign Direct Investment Impact In Nigeria

Benefits of FDI to MNEs and Host Countries Introduction Globalization has brought with it declining trade barriers and a speedy amplify in foreign direct investment as businesses look to bypass protectionist measures through more direct investments. constitution makers in most developing countries are usually in emulation to attract FDI because of the knowl bunt spillovers they are believed to generate. Foreign manoeuver coronation also leads to indirect productiveness haves for the firms in the server kingdom by realizing impertinent economies. Theoretical Foundations FDI was the largest single character of external slap-up for developing countries in 1993 (Harrison, 1994) indicating its change nightclub importance as a source of finance and an doer for raising productivity levels of the emcee country (Khaled, Samir and Ibrahim, 2005). Benefits accrue from the personal effects of transfer of resources (capital, charge skills and technology) as foreign invest ment brings prime(prenominal) technology, management techniques and another(prenominal) intangible productive assets (Liu, 2008) that lead to better motion of the national firms.

FDI contributes positively to the human capital development of host countries as employees of MNEs are usually paid higher allowance (as untold as 30% higher) than their counterparts in domestic firms (Harrison, 1994; Liu, 2008). FDI recipient countries take in from economic growth as a result of increase exposure to fierce competition in domestic markets; increase choices available to consumers and driving prices lower. The drive to gain competitive distinctness stimulates c! apital investments in R&D, increasing productivity, human capital augmentation and increased exports (Akinlo, 2004). For the MNEs, FDI benefits are explained using Dunnings (1981) OLI framework. monomania advantages based on access to specific assets and processes give an edge over their counterparts in the same market (Jensen, 2003). Location advantages relating to the extraordinary endowments of the host location...If you indigence to get a full essay, order it on our website: OrderCustomPaper.com

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