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Paper Topic:

FDI & MNE`s: A critical analysis of their impact on developing countries.

Abstract

The emergence of Multinational Enterprise and Foreign Direct Investment in Developing countries signifies the welcoming atmosphere of acceptance to change . Coupled with the promise of economic growth and development through technology transfer , knowledge sharing and productivity improvement , undeniably , the opportunity is there

This being the case , Foreign Direct Investment through Multinational Enterprise became an important factor for developing countries ' quest for economic cure . It only means that through the eyes of these developing countries , they have spotted a potential cure for their economic problems , increasing their potential to step

up in the world market , along countries that dominate the international community

The acceptance for Foreign Direct Investment rapidly increases as a number of developing countries emerge as a potential host country Strengthening the idea of FDI as source of foreign capital is the fact that along with it , the idea of vast opportunities that lie ahead seems all the more intriguing

This study explores the nature of Foreign Direct Investment in developing countries and the impact of Multinational enterprise Moreover , this study seeks to provide an in-depth understanding of FDI and MNEs relationship to developing countries , by providing an analysis of Pakistan as a developing country , relying heavily on FDI

INTRODUCTION

The impact of Foreign Direct Investment over the past decade had tremendously increased the interest of developing countries to attract foreign investment (Ramamurti , 2004 . In the age of globalisation , it has been widely accepted as the way to fast track the recognition of developing countries in the world market . Noteworthy , is the eagerness of developing countries to emerge as a top player in the field of investment and trade . Aiming to rise to the ranks of countries having formidable economic growth and dominance in the international community developing countries step up by highlighting their capacity to emerge victorious in the battle for sustainable growth and development by becoming a potential host country for foreign investors

Multinational enterprises (MNEs ) play a pivotal role in the development of many emerging economies (Meyer , 2004 . It contributes to economic growth by linking rich and poor economies and in transmitting capital knowledge , ideas and value systems across bs . Foreign Direct Investment (FDI ) through multinational enterprises (MNE ) has dramatically made its mark in emerging economies (Buckley and Casson 1976 . This rapid increase in FDI and MNEs is one of the highlights of Globalization (Cerny , 1994 . Foreign Direct Investment and Multinational Enterprise , although having conceptual differences , are treated more often than not , synonymously . MNEs and FDI , have established recognized effects of spillover , marketing , financial services , knowledge and capital inflow (Keren and Ofer , 2002 . These are among the inputs provided by foreign investment to the host country , once it accommodates foreign investors

Foreign Direct Investment can play an important role in developing countries (Moss and Ramachandran 2005 . Its impediments tend to be embedded deeper and more broadly within any country 's regulatory framework (OECD-Africa Investment Round Table 2003 For highly developed countries , FDI serves as an avenue to broaden their profit making capacity by generating opportunity...

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