The Political Economy of Foreign Direct Investment, Ch. 7 in Hill, C.W.(2005)

This is a chapter of book for Political Economy, learning between politics and economy. It was interesting and familiar with me because I am studying agricultural economics and agricultural industry is often affected by politics.

The article explains basic theories and knowledge about FDI. It starts three main attitudes to FDI, and explains benefits and costs of FDI from both side of a host and home country.

There are three views of FDI. First is the radical view; negative attitude toward FDI, the free market view; positive attitude toward FDI, pragmatic nationalism; the thought that seeks national interest. For long years, countries adopted the radical view but now sifting to accept the free market view; results to adopt pragmatic nationalism.

In reading benefits and costs of FDI, I felt the difficulties of economy; its intangibility. FDI has both merits and demerits for both a host and home country and the nature has not changed for long years. However, the attitudes and receptions have dramatically changed for 20 years. I think this is because real effect of FDI is hard to evaluate and we have no choice but to be at the mercy of fashionable economists or economic theories.

URL:http://jdasovic.com/2007/12/22/foreign-direct-investmentfdi-an-indicator-of-globalization/