Foreign Direct Investment

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Transcript of Foreign Direct Investment

1. Write a note on FDI inflows in Bangladesh as a mode of international Business. Last 5 years FDI inflows in BD and FDIs benefit to BD.

Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This series shows net outflows of investment from the reporting economy to the rest of the world and is divided by GDP. Actual FDI inflows rose 13.75 percent to $1.29 billion in 2012, the highest ever in the history of Bangladesh. The country received $1.13 billion in FDI in 2011.Investment has acquired considerable emotive force in any country. It is viewed as beneficial on employment creator-as it brings about economic development. It can termed capital flowing from a firm or individual within the country or in one country to a business or businesses in another country involving a share of at least 10%. So the significance of investment in a country is:1. It increases the economic growth by sustain increase in real, per capita, national product. This brings -National income effect, Balance of payment effect & Public revenue effect.2. Accelerate the industrial innovation this develops in integrations take a variety form which is not necessarily mutually exclusive.3. It increases Political modernization in the degree where it function are collective oriented, universalistic specific and achievement oriented.4. It also brings infrastructural development & modern nationalism.