Sulaimani Polytechnic University and the University of Garmian
Foreign Direct Investment (FDI) contributes?significantly to potential economic development by infusing foreign assets into domestic economies and incentivizing economic growth in many economic sectors. In the last 30 years, increased economic liberalisation and openness between countries have all contributed?to the rising flow of Foreign Direct Investment. FDI adds capital however; it also brings considerable spillovers, including increased exports?and new technologies that play a crucial role in GDP and growth. This is particularly true?with developing countries which aim at attracting FDI to spur growth. This paper examines the benefits and costs of?FDI, beginning with a description of its pattern across countries. The effects of FDI on employment, technology spillovers, and tax revenue will be analysed, finding FDI and local firms through external?linkages, exploring questions about FDI. You will also look at the inflow of finance and its function?for economic growth. Conversely, rapid industrialization in developing countries spurred by FDI often tends toward violations of environmental protection goals, as foreign investments?lead to pollution and increased carbon emissions, among other environmental hazards. As?a result, it is imperative that the investment process implements sustainable policies and practices that align economic development with environmental protection. The paper wraps up with a call for government policies?that encourage green, sustainable economic growth and draw foreign investments
Foreign direct investment (FDI) is the investment of foreign assets into a local economy, or the transporting of new assets to a host country, in order to increase the amount of output in different economic sectors. With an increased economic liberalization and economic openness between countries, foreign direct investment has been increasing during the last three decades. The inflow of foreign direct investment (FDI) is not only bringing capital inflow, but it also brings spillovers including, export, and advanced technology and so on. These are very significant to increasing GDP and to encouraging economic development. Developing countries are trying to attract FDI. In this essay the author is going to discuss, the benefit and cost of FDI. First, the distribution of FDI in the will be considered between countries. After that, it will be covered the impact of FDI on employment and then technological spillovers in the host country. The next step will look at tax revenue, followed by external linkage, and following this linkage FDI with local firms will be addressed. And then inflow of finance will be examined, last but not least is conclusion. Attracting foreign direct investment (FDI) is indeed a critical component of successful economic development, as it can bring innovation, technology, employment opportunities, and get to worldwide markets. However, balancing economic growth with environmental protection is a significant challenge, particularly in developing countries where they require for quick industrialization and increase employment opportunity often conflicts with sustainability goals (Nguyen 2020). Environmental protection is the process of protecting and keeping the environment clean from pollutant and needs to be repaired the damage (Nguyen 2020). However, countries attracting foreign investment, environmental quality have been harmed. Foreign investment brings such a technology that can affect the environment and led to increase carbon dioxide and greenhouse gas emissions (Sabir et al., 2020). Balancing economic development along with environmental protection requires a sustainable strategic approach that assimilates sustainability into every phase of the investment process. This dual effort is essential for achieving sustainable development in a gradually interconnected and environmentally conscious world.
The paper examines the impact of foreign direct investment and environmental pollution on economic growth in an emerging economy. Subsequently, the government needs to have policies to attract foreign investment to develop a green and sustainable economy.
The distribution of FDI flow is different between countries. During 1986 and 2000, the highest percentage of FDI inflow went to developed countries which reached 72% in total inflow globally, however, in 2008 the total inflow of FDI in the world was approximately $1.697 trillion, nearly $962 billion of which went to developed countries, while north America attracted 361$ billion (UNCTAD, 2009).
Chart (1) the distribution of FDI in the world
Ivan Kamal Hamasalih*, Ali Mohammed Salih, Burhan Ali Mohammed, Kamaran Qader Yaqub, Yaseen Abdulrahman Ahmed, Pakhshan M. R. Palani, Attracting Foreign Direct Investment Is Central to Successful Economic Development and Balance with Environmental Protection, Int. J. Sci. R. Tech., 2025, 2 (3), 25-32. https://doi.org/10.5281/zenodo.14953580
10.5281/zenodo.14953580
