The Influence of Foreign Investment and Domestic Investment on Economic Growth

Nisrina Isnaini Pratiwi, Irianto Harko Saputro

Abstract


foreign direct investment (FDI) on economic growth in developing countries. Foreign investment is considered one of the main drivers of economic growth due to its contribution to increasing capital, technology transfer, job creation and improving the balance of payments. Increased capital obtained from FDI enables the development of better infrastructure and higher production efficiency. Technology and knowledge transfer from multinational companies also plays an important role in economic modernization and increasing productivity. Additionally, FDI helps reduce unemployment by creating new jobs and increasing household income. However, this research also identifies several challenges and risks associated with reliance on foreign investment, such as vulnerability to global economic turmoil and a greater flow of profits to foreign companies. Therefore, it is recommended that developing country governments manage and regulate foreign investments carefully to maximize benefits and minimize risks.


Keywords


Developing Countries, Economic Growth, Foreign Direct Investment (FDI)

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DOI: https://doi.org/10.20961/bfde.v5i1.101883

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