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Growth of FDI

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Study Question: Explain why FDI has grown so rapidly over the past 40 years.

FDI has grown rapidly in the last few decades due to increasing globalization and reduction in investment barriers in many nations across the world. Encourage of free trade, establishment of trading blocs and trade treaties has encourage cross border investments and thus, more and more companies have started exploring new markets across the world. Emerging markets or developing nations across the world has presented attractive opportunities to global companies and thus, boosted FDI.

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In the last 40 years, there has been significant liberalization and opening up of national borders for bilateral trade among nations, which has resulted in significant flow of money from developed nations to countries offering competitive or comparative advantage. The ...

Solution Summary

Growth of FDI is examined.