The main benefits of inward FDI for a host country arise from
A)the resource-transfer effect,the employment effect,and the balance-of-payments effect.
B)the labor-transfer effect,the technology effect,and the currency-exchange effect.
C)the cultural awareness effect,first-mover advantage effect,and economic development effect.
D)the foreign exchange reserves effect,knowledge flow effect,and the reverse resource transfer effect.
E)the employment effect,the labor-transfer effect,and the technology effect.

Question

Quizplus · Accepted Answer

The resource-transfer effect refers to the transfer of capital, technology, and management skills from the foreign investor to the host country. The employment effect results from the creation of new job opportunities in the host country. The balance-of-payments effect occurs when the host country receives foreign currency inflows in exchange for goods and services produced by the foreign investor. These benefits are widely accepted and documented in the literature on FDI.

The Main Benefits of Inward FDI for a Host Country