What are the advantages and disadvantages to foreign direct investment?
What will be an ideal response?
Foreign direct investment can open new investment opportunities and benefit countries by bringing in more resources which in turn creates new jobs and new technology. This provides the base for further economic development and growth. Foreign subsidiaries of multinational companies often pay higher wages than local domestic companies and share the profits. However, foreign direct investment can also result in the exploitation of workers with low bargaining power, degrade the environment where there are no protections (i.e., social dumping). Further, it can result in the loss of jobs and downward pressure on compensation for employees in the "home" countries.
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