Foreign Direct Investment is seen as the fundamental part for an open and successful
international economic system and a major mechanism for development.

In last decades, the importance of FDI has significantly increased due to globalization process,

which offers huge opportunities for mostly developing countries to reach faster economic growth through trade and investment

It cant be denied that FDI brings a lot of advantages for a host country but there will
also be some drawbacks.

In this essay, I will discuss both sides towards this issue.

Foreign direct investment can make a positive contribution to a host economy.

thus it can improve the efficiency of operation and economic development.

thereby, it helps to improve the quality of products as well as the process to create products.

Foreign direct investment creates educational opportunities so that people can improve their personal skill base.

With better skills, higher wages can be earned, Greater productivity levels are achieved.

However, FDI also brings some disadvantages to the host country.

The entry of large foreign firms may drive out local businesses that simply cannot compete.

For example, they may pay less labour, clear land to set up factories and dump hazardous waste into the environment.

Once the initial investment starts to turn profitable, it is inevitable that capital will return to the home country

In conclusion, although there are certain disadvantages but its advantages are much more
considerable.

FDI not only serves as a source of capital inflow into host economies,

but also helps to enhance the competitiveness of the domestic economy

through transferring technology