Question

What are the possible problems and downsides from foreign investment, for both the source and host country?

Answer 1

ANSWER:: (as per my knowledge)..

* Foreign presence may have a negative impact on the reproductive process in the country-recipient. So, foreign firms and investment are a source of additional funding for domestic investment only until repatriation of profits does not exceed these investments. During the reforms, the residents as well as non-residents have developed a sophisticated scheme of hiding and disposal of its profits from tax. Forms of unauthorized export of capital abroad are diverse.

FDI often did not lead to the improvement of the structure of production and accumulation in the host country, as foreign firms, guided by theory of product life cycle, is transferred abroad, mainly those of technology and the equipment that their country had lost the latest status.