Foreign direct investment and its impact on the economic growth of selected developing countries for the period (1996-2010)

Abstract

Many countries witnessed many events and changes in economic and political, whether developed or developing, Particularly in the nineties of the last century and the beginning of the new millennium to keep up with rapid and successive developments in the global economy in light of the prevalence of the phenomenon of globalization and the multiplicity of forms and sources that have made ​​the world a small village. And increasing shift towards market mechanism and control of multinational corporations on the movement of goods and services and the opening of markets also increase the size of the financial flows among countries.

The Foreign Direct Investment (FDI) is one of the variables that is affecting the evolution and growth of countries and an indicator of the economy 's openness tends to the outside world, as well as it is one of the economic variables that has seen a remarkable amount of disparate views for the role assigned to it in order to achieving economic growth. Hence the importance of research to focus on the importance of the role played by this type of investment in economic growth both in terms of being a source of relatively stable financial resources tangible and intangible , or in terms of being an important tool for job creation and transfer of modern technology and expertise and management , and the development of local industries to be more competitive in global markets, as well as to optimize the use of resources. Thus, the economic importance of foreign investment in developing countries do not depend on the size of the investment or the speed of the flow , but also depend on the extent of their response to all the requirements of the balanced growth of the sectors and various economic activities within the country.

To sum up, this research reached to some conclusions and proposals , one of them showed the behavior of foreign direct investment plays a positive role compatible with economic logic and assumptions theory of signal parameters , and this means that any increase in this variable is incremented by one unit will lead to a change in the aspects of economic activity to varying degrees according to the importance of and the size of the investment. And also research found that foreign direct investment is one of the independent variables that have a positive role in economic growth, it was found that in the side of the standard of research , for the two selected from the continent of Asia, of each of (South Korea and Malaysia), economic growth has been the most affected foreign direct investment compared to the Latin American countries of Argentina and Chile.