Policy implications of the changing sources and forms of international investment: an overview
Investment, whether domestic or international, plays a significant role in the sustainable growth and development of an economy. It is even more important when the domestic resources of a nation are insufficient to achieve the objectives of long term potential growth. Foreign direct investment (FDI) has been an integral part of the international investment landscape since the second half of the last century. These investments have been proven to play an important and crucial part of the economic and financial growth and development of a nation. Developed and industrialized countries such as the European Union (countries), the US and Japan have historically been the drivers and sources of FDI to the less developed countries. The investments were led by large multinational enterprises venturing into foreign markets to access resources and markets. There have been a lot of changes in the economic and investment backgrounds of the world economies in the past few years, and FDI has remained an integral part. The support and positive attitude towards FDI is commendable. In the last two decades, there have been striking features in the international investment landscape which were not witnessed in the early years. FDI from developing countries, particularly the countries of Brazil, Russia, India and China has grown tremendously. Their share in the global economy as sources of FDI may not be as big as that of the traditional developed countries of Europe and the US, but their share and growth cannot be marginalised. This research project focuses on the changes seen in the global investment climate in the last two decades and the growing significance and influence of the BRIC nations on the global economy. A study of the existing literature and present policies implemented in countries such as Australia, Germany and the United States is undertaken done to determine the concerns and responses to these changing investment patterns at the international level.