Question

Discuss the different factors that can attract inflows of FDI to Asia.

Discuss why these Asian countries are leading in FDI inflows from other advanced countries.

Answer 1

Foreign direct Investment(FDI) is a type of investment made by a firm or individual in one country in business interest location in another country. for example A Indian sporting goods manufacturer builds a factory in Afghanistan. An Pakistani bank opens a customer service center in china to serve Chinese customers.The different factors that can attract inflows of FDI to Asia are following:-

1:GDP of country.

2:gross capital formation.

3:Capital infrastructure.

4:External debt.  

5:Export and import.

Asian countries are leading in FDI inflows from other advanced countries  because of high income economy and attracted foreign country investors because of following reasons:-

(1). low tax rate.

(2) political stability.

(3) commodities.

(4) exchange rate.

(5) transport and infrastructure.

(5) labor skill etc.