The Impact Of Foreign Direct Investments
The impact of Foreign Direct Investmens on the developing process of an economy has been an important topic of discussion in many countries all over the world. In the world economy, FDI has become a crucial factor, that accelerates globalization. The substantial rise of international output is determined by economic and technological forces. Also, it is determined by the progressive liberalization of Foreign Direct Investment and the change in coutries' legislations. A distinguishing characteristic of the modern world has been the circulation of private capital flow as a foreign direct investment in developing countries, especially since 1990s. Since the 1980s, multinational corporations (MNCs) have come out as main players in the globalization process.
It has been a huge tendency, that governments all over the world try to attract multinational corporations (MNCs) in order to come to respective countries and invest. This has been a strategy for both: progressive and developing states.
This experience may be related to the broader context of liberalization in which most developing and transition countries have moved to market-oriented strategies. In this context, globalization offers an unparalleled opportunity for developing countries to attain quicker economic growth through trade and investment. In the period 1970s, international trade grew more rapidly than FDI, and thus international trade was by far than most other important international economic activities. This situation changed radically in the middle of the 1980s, when world FDI started to increase sharply. In this period, the world FDI has increased its importance by transferring technologies and establishing marketing and procuring networks for efficient production and sales internationally (Shujiro Urata, 1998).
FDI flows comprise capital provided by foreign investors, directly or indirectly to enterprises in another economy with an expectation of obtaining profits derived from the capital participation in the management of the enterprise in which they invest. The foreign investors acquire ownership of assets in the host country firms in proportion to their equity holdings. This is the empirical definition of FDI adopted by many countries to distinguish it from portfolio flows. According to International Monetary Fund (IMF), FDI is defined as " an investment that is made to acquire a lasting interest in an enterprise operating in a economy other than that of the investor" The investor's purpose is to have an effective voice in the management of the enterprise (IMF,1977).FDI is the process by which the residents of one country (the source country) acquire the ownership of assets for the purpose of controlling the production, distribution and other productive activities of a firm in another country (the host country).(责任编辑：BUG)