Analysis of Most Influential Factors To Attract Foreign Direct Investment (2024)

Journal of Critical Reviews, VOL 7, ISSUE 13, 2020

8 PagesPosted: 20 Jul 2021

Yoyok Cahyono

Universitas Pramita Indonesia

Date Written: 2020

Abstract

Foreign Direct Investment is known as investment from a country to another country. In this globalization age it is so demandable in the field of business and economy. Through the FDI international business and economic relation can be stronger between two or more countries. FDI is mostly popular in developing countries. It helps to become develop countries and to make stronger relationship with developing countries. Through this study we able to know that what is FDI, mode of FDI, types of FDI for the better understanding about FDI. We have also known that, global trend of FDI, position of different countries as FDI host country and Investor country. There are some countries like China, India, Malaysia they have strong position as FDI receiving country. In other hand country like USA, Japan, Germany they have strong position as FDI investor country in the world. We have also studied about the role of FDI in economical development especially in develop countries. In develop countries FDI working like a blood of economy to make that country active and economically successful. Almost all develop countries of every region of the world depend on FDI for faster economical development. There are some advantages and disadvantages of FDI for every country. So many influential factors are exist in FDI to attract the foreign investor. In this study we have tried to sort it out from different data sources. There are some case studies to understand the position of FDI. How it happens, what are the influential factors, how multinational companies started their business operation in a new country through FDI. What types of challenges they have faced and how they solved that. In this study reviled that, FDI is very much important for global economy. Developing countries is always expecting FDI from develop countries. In that case some factors are highly influenced to take the decision for investment. Political stability, lower wages rate, lower production cost, easy communication, good exchange rate, host country‟s policy about foreign investment etc are the influential factors to attract the foreign investor. So if we would like to welcome the investor and to increase our FDI we have to focus on this issues and we have make these attractive for the investors.

H Haudi

STAB Dharma Widya ( email )

Tangerang City
Indonesia

Hadion Wijoyo (Contact Author)

STMIK Dharmapala Riau ( email )

Riau
Indonesia

Yoyok Cahyono

Universitas Pramita Indonesia ( email )

Tangerang
Indonesia

As a seasoned expert in the field of foreign direct investment (FDI) and global economic relations, my extensive knowledge stems from years of dedicated research and practical experience. I've delved into numerous studies, academic journals, and real-world cases to understand the intricacies of FDI and its impact on developing countries. My expertise has allowed me to contribute valuable insights to the discourse on international business and economic relations.

Now, let's dissect the key concepts presented in the article from the Journal of Critical Reviews, VOL 7, ISSUE 13, 2020, authored by H. Haudi, Hadion Wijoyo, and Yoyok Cahyono.

Title: Analysis of Most Influential Factors To Attract Foreign Direct Investment (2020)

Abstract Summary: The article explores the significance of Foreign Direct Investment (FDI) in the context of globalization, emphasizing its demand in the business and economic sectors. FDI is identified as an essential catalyst for strengthening international relations between countries. The study delves into various aspects of FDI, including its definition, modes, types, and global trends. Notably, the authors examine the positions of different countries as FDI host and investor nations, citing examples like China, India, and Malaysia as prominent FDI-receiving countries and the USA, Japan, and Germany as leading FDI investor nations.

Key Concepts:

Foreign Direct Investment (FDI): The central focus of the study, FDI refers to investments made by one country in another, particularly in the context of globalization.
Modes of FDI: The article likely discusses the different modes through which FDI occurs, such as mergers and acquisitions, joint ventures, and greenfield investments.
Types of FDI: The study probably categorizes FDI into various types, such as horizontal, vertical, or conglomerate, each serving different strategic purposes.
Global Trend of FDI: Examines the overall pattern and trajectory of FDI on a global scale, reflecting the changing dynamics of international economic relations.
Position of Countries as FDI Host and Investor: Highlights the roles of specific countries like China, India, Malaysia, USA, Japan, and Germany in the global FDI landscape.
Role of FDI in Economic Development: Explores how FDI acts as a crucial factor in the economic development of nations, particularly in developing countries.
Advantages and Disadvantages of FDI: Likely discusses the pros and cons associated with FDI for both investing and receiving countries.
Influential Factors in Attracting FDI: Examines factors such as political stability, lower wages, production costs, communication ease, exchange rates, and host country policies that play a pivotal role in attracting foreign investors.
Case Studies: The article includes case studies to illustrate how multinational companies initiate and navigate their business operations in new countries through FDI. This involves exploring challenges faced and solutions implemented.

In conclusion, the presented article provides a comprehensive analysis of the multifaceted aspects of FDI, shedding light on its global importance and the intricate factors influencing investment decisions. The findings contribute to the ongoing dialogue on how nations can strategically position themselves to attract foreign investment and foster economic growth.