Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

Question

Quizplus · Accepted Answer

Foreign direct investment (FDI) and domestic investment can have different effects on economic prosperity. FDI can bring in capital, technology, and management expertise, potentially leading to higher productivity and economic growth. However, it might also lead to profit repatriation and less local control. Domestic investment strengthens internal capital formation and may ensure more stable economic growth, but it might lack the technological and managerial benefits that FDI can offer. The impact of each type of investment on economic prosperity can vary based on the country's economic structure, policies, and the sectors receiving the investments.

Foreign Direct Investment and Domestic Investment Have the Same Effect