Foreign Direct Investment Beneficial

Is Foreign Direct Investment Beneficial?

There are four agencies that keep track of the statistics of FDI. The UN Conference on Trade and Development summarizes the trends of FDI all around the world and publishes the Global Investment Trends Monitor. The Organization for Economic Cooperation and Development reports on both inflows and outflows of the FDI. It publishes FDI statistics quarterly to the member countries it houses. However, the Organization does not capture the statistics between the emerging markets.

The IMF published the first Worldwide Survey of Foreign Direct Investment Positions in 2010 and continues on doing so in yearly basis. The statistics are presented through an online database. The report contains statistics gathered from 72 countries. Many parties support the IMF to present the data such as the UN Conference on Trade and Development, the Organization for Economic Cooperation and Development, Eurostat, and the European Central Bank. The Bureau of Economic Analysis, meanwhile, reports the activities of foreign affiliates of US-based companies. The Bureau also reports on how much US companies have invested so far overseas.

In many regards, the FDI does indeed provide several advantages that the recipients can enjoy. A recipient business can find FDI an effective tool that can help them get into the international market. Some countries out there are not that accommodative of foreign companies so it would be a little difficult for a business to enter international market without FDI.
The presence of FDI is also an advantageous factor that may help a business to gain access to resources, such as important natural materials like fossil fuels or precious metals. Production cost can also be pressed down with the supports from FDI for a lot of reasons. Clothing and shoes industries are a prime example of this matter, in which many manufacturers relocate their operation to developing countries.