Foreign Direct Investment’s Impact on the Activity of Transnational Corporations

Abstract

The purpose of this article is to analyse how FDI impacts transnational corporation, local firms’ productivity and investment climate, and its influence on domestic enterprises. Positive and negative effects of foreign capital movement on the economy of the recipient country are examined. The evaluation of FDI flows, variations in global FDI by country, and net annual FDI flows are considered while determining global capital movement policies. Direct and indirect FDI spillover effects on domestic firms across countries are considered factors of production. The challenges faced by governments in creating policies to attract FDI practices in emerging economies are reflected. An attractive policy that encourages the expansion of foreign capital is proposed.