Fiscal Policy Case Study

Foreign Direct Investment in 2005: Shifting towards Services?

OR

Abstract:
In recent years, few things have created such a debate as has the impact of Foreign Direct Investment (FDI) on the country’s economy. While a school of thought argues in favor of greater FDI into the country, another school focuses on the repercussions FDI is likely to have on the domestic industry. While traditionally FDI has flowed into manufacturing, of late a discernible trend is towards FDI in services. The case traces the roots of this movement of FDI in the services and discusses the impact, positive or negative on the country’s economic growth.

Pedagogical Objectives:

• FDI and country’s development
• Importance of FDI in services
• Factors behind the shift in FDI from manufacturing to services
• Future trends of FDI
• Theories of international trade and FDI inflows.

Keywords : Trade Theory, Service Industry, Comparative Cost Theory,Fiscal Policy Case Study, Developed countries vs Developing countries, Economic Growth, Government Policy, Developmental Theories, World Investment Report, International Economics, FDI and Society, Developmental Economics