Foreign Direct Investment Analysis
Foreign direct investment (FDI) is the most way entered into a market of foreign country, it is because FDI is believed to be stable and easier to service than bank credit. FDI are usually on long term economic activities in which the return profit only occur when the project earns profit. As stated by Dunning and Rugman (1985), Foreign Direct Investment (FDI) contributes to the country’s gross capital formation, higher growth, industrial productivity and competitiveness and other spinoff benefits such as transfer of technology, managerial expertise, improvement in the quality of human resources and increased investment.
Foreign direct investment (FDI) has been considered as a significant source for continuous growth, enhancing exports and
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In addition, Malaysia received some advantages from large FDI inflow to stimulate the economic growth in Asia since the foreign investors will not only share their skills by transfer technology but also the knowledge of workforce. If the foreign factories are established in their countries, they will disclose to advance technology production and efficiency in management. FDI inflow will also lead to rise of income because of large company always provide higher wages. This would help Malaysia stimulate economic growth. If investors establish a new company in Malaysia they will create job opportunities as a result increase of income and competitors. New employment opportunities can provide more purchasing power which in turn leads to economic improvement.
FDI inflow bring the most significant advantages for Malaysia which could bring more employment opportunity. Foreign company might share their experience and training employee for the purpose of enhance knowledge. A company have the human capital resource but it is not a company tangible asset. This also means that countries with FDI through increase exploitation of human capital resources gain benefit at the same time keeping
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