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Below is an essay on "Free Trade" from Anti Essays, your source for research papers, essays, and term paper examples.

Discuss the implications of foreign direct investment (FDI) on recipient countries paying particular attention to developing countries.
Foreign direct investment (FDI) is an integral part of an open and effective international economic system and a major catalyst to development. FDI is the direct investment into a host country’s production by a company located in another country through the acquisition or joint ventures with domestic firms located in countries where the Transnational Corporations (TNCs) wish to develop an interest, and licensing arrangements whereby a domestic firm produces a TNC’s product locally. FDI has grown faster than the global output and trade over the last two decades. This has given rise to a number of theoretical and empirical studies that have investigated its determinants and impact on the recipient country, particularly in developing economies. Literature on economic growth and FDI implies that FDI from TNCs facilitates the economic growth of developing recipient economies via capital accumulation, technology advances and via spillover effects through the inclusion into international productive capacity and human capital indirectly. However, there can be potentially negative effects as well through increased competition on local manufactures that do not have access to the capital required to match TNC’s capital base. TNC’s developing monopolies through acquisitions and mergers therefore dominating the local market. TNC’s taking advantage of poor governance by host countries and exploiting the local work force through sub standard conditions or aggressive tax avoidance schemes, TNCs setting up industries that would be very difficult to set up in their own countries due to the high pollution and damaging environmental footprint: i.e. 1993 Report from the China Environment Protection Agency (CEPA).
As a component of capital, FDI can contribute to economic growth by expanding the capital stock. Since much of the theory until the 1970s...

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