If the FDI is a substitute for imports of goods or services, the effect can be to improve the current account of the host country's balance of payments.

Question

Quizplus · Accepted Answer

If FDI is a substitute for imports, it means that the foreign company is producing the goods/services in the host country instead of importing them, which would reduce the imports and improve the current account of the balance of payments.

If the FDI Is a Substitute for Imports of Goods