Economic, Political And Social Implications Of FDI For Host-Economies

Submitted By annew8
Words: 2944
Pages: 12
Open Document
Economic, Political and Social Implications of FDI for Host-Economies

March 31, 2013

Christine Youyeoun An

Simon Fraser University

POL343-Global Political Economy

Examine the economic, political, and social implication(s) of FDI for host economies. Illustrate your answer with empirical examples.

Abstract
While many consider the attraction of foreign direct investment (FDI) as a precondition for a successful development, others fear its negative effects on sustainability. The triumph of neoliberal economic ideology has produced many recent studies, which focus on the positive effects of FDI on host economies. However, economic growth is not an automatic consequence of FDI. The objective of this essay is to present and critically evaluate different theoretical and empirical approaches to FDI and the economic, political, and social implications for host-economies. This essay, then, concludes that FDI can have both positive and negative implications. The effects of FDI on development depend on the existing or subsequently developed internal conditions of the host-country. Thus, the state plays a key role in creating the right condition to absorb the benefits of FDI, and the effects will differ not only across countries but also within countries at different times as conditions change.

I. Introduction
The movement of capital and resources on a global scale is a prominent feature of the current globalized economic landscape. Significant increase in the movement of capital and resources has been brought about by rising levels of foreign direct investments (FDI) made by transnational corporations. FDI refers to “investment made outside the home country of the investing company in which control over the resources transferred remains with the investor” (O’ Brien and Williams, 2010, p.186). It consists of a package of assets and intermediate goods such as capital, technology, management skills, access to markets and entrepreneurship. Transnational corporations - most of which are based in Western countries - are one of the most important bodies in the global economy, acting as agents of the capital and resource movement. Occupying a more powerful position than ever before, TNCs operate across national boundaries and impose significant economic, political, and social impacts on host-countries.
There are competing perspectives concerning the impacts of FDI on host-countries. Since 1960s, controversial implications of FDI have been hotly debated between the neoliberal proponents and the radical opponents. In the 1970s when the Third World’s demand for a New International Economic Order was at its peak, the dependency analysis was more credible and the views of the critics were given greater prominence. However, with triumph of neoliberalism, adjustment policies were imposed on developing world and the views of the proponents of FDI have acquired greater credibility in the recent era (O’ Brien and Williams, 2010, p.204).
Reconciliation of these two contrasting perspectives is possible by using selective statistics and case studies to support their respective arguments. In fact, the political, economic and social implications of FDI depend on the existing or subsequently developed internal conditions of the host-economy; hence, overgeneralization appears dangerous. First, in light of the neoliberal economic perspective, countries that have been beneficiaries of FDI will be examined to see the positive effects FDI has imposed. Empirical evidences from East Asian countries - including China, South Korea, Singapore and Hong Kong – suggest that developing countries that have been open to FDI have industrialized at much greater rates than their restrictive counterparts (Lall, 1911, p.251). Then, in light of the radical perspective, countries on which FDI has had more negative impacts will be examined. The cases of African and Latin American countries strengthen the notion that excessive dependence on FDI can
Show More

Related Documents: Economic, Political And Social Implications Of FDI For Host-Economies

Research Essay

Research Essay Outline I. Introductory Paragraph Thesis statement: This paper attempts to discuss the differences of whether single-sex schooling is beneficial with regards to the students’ academic achievement, personal development and social interaction. In doing so, it will provide a critical and evaluative viewpoint on some of the important concerns relevant to the two scholastic settings. II. Body paragraphs 1) Academic performance/achievement a) Single-sex schools i) Teaching/learning perspective…

Words 2209 - Pages 9

Research essay

method of preventing patients who are in infancy from infectious disease, such as MMR. This essay will discuss the advantages and disadvantages brought about by routine childhood immunisation. It will discuss that routine childhood immunisation is able to decrease the occurrence of vaccine-preventable diseases among children and will bring a variety of benefits to the public. However, on the other hand, this essay will also discuss the potential risks of daily childhood vaccination. Initially, the…

Words 2470 - Pages 10

Research: Scientific Method and Research Essay

Education, Health and Community Centre for Tourism, Events and Food Studies RESEARCH METHODS 6001TEFSUM TITLE: ESSAY OF QUALITATIVE METHODS, QUANTITATIVE METHODS and SECONDARAY DATA ANALYSIS METHODS. Summer Semester 2014 Module Leader: Dr. Martin Selby Student Name: Tham Yee Wen Student Number: 695121 Introduction According to Bob, R., Robert W. and Michael, T. (2002), research is a process of intellectual to discovery which has the potential to transform our…

Words 4505 - Pages 19

Research Argument Essay

Elizabeth Jeziorny Prof. Donohue WR122 14 June, 2012 Final/Revised Researched Argument Essay (thesis) The media is a culture force that can not be avoided and gives us information on a vast variety of topics. It influences what we think, the way we act and helps us choose our purchases. The media not only provides us with the information, but it decides which information is important. What we see on television and the internet or what we hear on the radio is all chosen by the media. Media…

Words 3597 - Pages 15

Research Essay

Charles Kalmar charles.kalmar@ tulsacc.edu ENGL 1213, 290 22 April 2013 Research Essay John’s Relentless Pursuit In the movie John Q, written by James Kearns and directed byy Nick Cassavetes, many forces are at play and propel the main character John to act irrationally and go beyond society’s acceptable threshold of direct action to save his beloved son. The film is made during a time of national health care crisis in the United States. The story reflects the experience of Nick Cassavetes real…

Words 1917 - Pages 8

Sources Research Essay

My essay will be based on public transport. For my research essay I will try to balance my research so there can be two different points of view. My first source is an online newspaper title taken from manchesterevening.co.uk and it was written by Deanna Delamotta. Title of the source is ‘Time to shout out how bad our public transport is’. I think this source is a good source because it contains negative views about public transport and why do people dislike using public transport. In this source…

Words 830 - Pages 4

Wikipedia and Research Essay

especially when the paper requires research. Several college students are not aware of how proper research is done. Students struggle and cringe on the sound of “research paper”. The nature of research has dramatically changed too. Not only our student unaware of how proper research is done, but throughout years the notion of accurate research has been evolving. Before students were to find the nearest library, look for books based on their topic of research. If they were able to check out the book…

Words 1327 - Pages 6

Research: Historiography and Research Essay

Research Task 1: How Research is conducted by using primary sources (first hand) and secondary sources (second hand) to learn new things about a specific topic or to answer a question. People conduct research in many different ways. One of the ways people can conduct research is by reading books. Books are very valuable sources of information. Although books are considered “old fashion” they can provide better quality information then what can be found on the internet. Books are secondary source…

Words 576 - Pages 3

Essay on Research: Research and Participants

Please click the link below to visit the seminar. www.proofessor.co.uk/research-proposal Name of researcher: Your name Email address: Title of research: Have a specific title. Preferable one sentence. If it is too long and includes too many things you will fail. My title was: The effect of musical preference on running performance. Supervisor: Briefly describe the rationale for your research with reference to the research literature (approx. 250 words). Please Note: Although your dissertation…

Words 2806 - Pages 12

THE RESEARCH PROCESS RESEARCH Essay

THE RESEARCH PROCESS 1. I chose to use google.com. I chose Google because it's all I use online to search and I've learned to navigate it very well. I first searched "planning a career change". To see if my results would vary, I changed my keywords to "change + career". Upon looking through my search results, I came across a valuable site named careercast.com. 2. I investigated four different websites to determine which one I would use for my evaluation. The first website I looked at was Career-Change-Confidence…

Words 492 - Pages 2