Dubai American Academy

Even though many job opportunities were given to workers from other nations, it is indisputable that FDI has increased employment rate within the developing countries to a certain extent. Comparing to the overall employment rate of China in 1986, the employment rate of the country has increased 165-fold by 2011. Also, there is an increase in FDI value from $16.753 billion in 1987 to $ 816.144 billion in 2011 in China. These two sets of data indicate a strong correlation between the two factors and supports the idea that FDI do positively affect the economy of the developing country. Even though the working conditions and wages of these workers may be low, the job opportunities offered by the MNCs can at least provide the people with some income that could pull them out of extreme poverty. Therefore, foreign direct investment inarguable has a positive impact on the economy.

Foreign Direct Investment stimulates economic growth and development in developing countries. In order to attract investments from foreign countries, governments of developing countries are more motivated to improve the infrastructure, which not only benefits the foreign companies, but also benefits the nation as better infrastructure leads to better transportation, communication, and access to Energy.