The determinants of Foreign Direct Investment (FDI) in ：外商直接投资（FDI）在决定因素.docx

CHAPTER 1 : INTRODUCTION1.0INTRODUCTIONThis section includes details of overview of foreign direct investment(FDI), background of the study, problem statement, research objectives, scope of study and hypothesis or research questions. AN OVERVIEW OF FOREIGN DIRECT INVESTMENT According to Wikipedia, foreign direct investment (FDI) or foreign investment can be defined as long term participation by country A into country B. It usually involves participation in /topic/managementmanagement, /topic/joint-venturejoint-venture, /topic/technology-transfertransfer of technology and /topic/expertexpertise. More specifically, foreign direct investment is a cross-border corporate governance mechanism through which a company obtains productive assets in another country. FDI is different from other major forms of foreign investment in that it is motivated largely by the long-term profit prospects in production activities that investor directly control (Wong,2005).Most of the developing and least developed countries worldwide equally participated in the process of direct investment activities . Over a long period of time, foreign direct investment (FDI) forms a major part of investment in most industrial and some developing countries. In the last 2 decades, foreign direct investment (FDI) flows have grown rapidly all over the world. This is because many countries and especially developing countries see FDI as an important element in their strategy for economic development (Adams,2009). According to Wikipedia, the United States is the world’s largest recipient of FDI. More than $325.3 billion in FDI flowed into the United States in 2008, which is a 37 percent increase from 2007. Some FDI is intended to utilize local natural resources. Sometimes it is to employ relatively cheap labour, and sometimes to produce goods near to markets.Besides, foreign direct investment can be a significant driver of development in poor nations. It provides an inflow of foreign capital and funds, in addit