1) What are the positive and negative consequences for domesticbusiness associated with FDI (foreign direct...

1) What are the positive and negative consequences for domestic business associated with FDI (foreign direct investments)

2) In your opinion, why government authorities in some countries (or in particular cases) may

oppose FDI?

Expert Solution

Positive Consequence :-

Increased Employment and Economic Growth. ...
Human Resource Development. ...
3. Development of Backward Areas. ...
Provision of Finance & Technology. ...
Increase in Exports. ...
Exchange Rate Stability. ...
Stimulation of Economic Development. ...
Improved Capital Flow.

Negative consequence :-

Foreign investment can cause negative effects on domestic companies, if foreign investors squeeze domestic producers from the market, and become monopolists. The damage may be made also to the payment balance of the host country due to the high outflow of investors' profits or because of large imports of inputs.

Answer: 2

FDI is opposed by some government authorities inspite of its benifits as it can cause negative imoacys too on the domestic country and its businesses. Foreign investors may sqeeze domestic producers from the market and damage to the balance of pyment can be there when foreign companies will reliaze profits in large and go back to their countries .

Rahul Sunny answered 2 years ago

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