FDI policies and their role in enhancing economic development

Essay by pemusa2011University, Master's November 2011

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Increasing inflows of Foreign Direct Investment (FDI) into a country are often seen as a means of promoting economic development. Explain the policies you would recommend a host country government to adopt towards foreign investors, in order to promote economic development.

Presented by: Ndwiga P. Musangi (HD433 - COO4 - 1622/2011)

Presented to: Dr. P. Katuse

A research assignment presented in partial fulfillment in completion of Corporate Management (DBA 4103) course unit under Doctorate degree in Business Administration ( Finance) offered by Jomo Kenyatta University of Agriculture & Technology (JKUAT).

23rd August 2011


Developing countries, emerging economies and countries in transition have come to increasingly see FDI as a source of economic development and modernization, income growth and employment. Countries have liberalized their FDI regimes and pursued other policies to attract investment. They have addressed the issue of how best to pursue domestic policies to maximize the benefits of foreign presence in the domestic economy.

The study Foreign Direct Investment for Development attempts primarily to shed light on the growth of FDI and its use in economic development.

This paper will in summary define FDI, outline the various benefits associated with a country that has an uptake of FDI and also look into the demerits of using FDI as an economic growth vehicle.

The writer will explore the various policies on FDI that a host country government can adopt towards foreign investors in order to promote economic development.

The author will collect information from various existing sources (secondary data), e.g. Internet, related textbooks, other related research papers, journal articles, newspaper, etc.

List of Definition

Investor - is the entity making the investment is an investor.

Investment - is an asset purchased for profit, whether via...