Important Impact of Fdi on Australian Economy
Important impact of FDI on Australian economy
Jes Hongs
Abstract
Australia has traditionally relied on inward FDI to meet the shortfall between domestic saving and the level of domestic investment. Inward FDI also continues to play a significant role in making Australian industry internationally competitive, and thereby contributing to export growth. Over the past 15 years Australian outward FDI stocks have grown more strongly than inward FDI stocks. Outward FDI enables Australian firms to expand their business beyond the potential constraints imposed by the limited size of the domestic market. To support increasing investment by Australians at home and abroad, Australia will need higher levels of foreign investment in the future. In order to achieve this focus tariff protection in Australia should continue to be lowered. Investment policies should not have aberration from this direction.
Key words: FDI, GDP. Inward, Outward, Policy
1. Introduction
Foreign investment is an important economic process during which foreign state and private companies and enterprises invest capital, technology and innovations into the companies of another country. As usual, the capital flows from developed countries to developing countries. Modern world economy cannot develop successfully without foreign investment. A great number of countries invest their funds to the economy of other countries having a certain income and developing certain branches of industry of such countries.
The sums of money invested in a company are usually quite big and they make a great influence on the economic system of a particular country. As a rule, the investment covers the expertise before the start of building, technology development, and management.
1. Significance of Foreign Direct investment (FDI)
Foreign direct investment (FDI) plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing
Jes Hongs
Abstract
Australia has traditionally relied on inward FDI to meet the shortfall between domestic saving and the level of domestic investment. Inward FDI also continues to play a significant role in making Australian industry internationally competitive, and thereby contributing to export growth. Over the past 15 years Australian outward FDI stocks have grown more strongly than inward FDI stocks. Outward FDI enables Australian firms to expand their business beyond the potential constraints imposed by the limited size of the domestic market. To support increasing investment by Australians at home and abroad, Australia will need higher levels of foreign investment in the future. In order to achieve this focus tariff protection in Australia should continue to be lowered. Investment policies should not have aberration from this direction.
Key words: FDI, GDP. Inward, Outward, Policy
1. Introduction
Foreign investment is an important economic process during which foreign state and private companies and enterprises invest capital, technology and innovations into the companies of another country. As usual, the capital flows from developed countries to developing countries. Modern world economy cannot develop successfully without foreign investment. A great number of countries invest their funds to the economy of other countries having a certain income and developing certain branches of industry of such countries.
The sums of money invested in a company are usually quite big and they make a great influence on the economic system of a particular country. As a rule, the investment covers the expertise before the start of building, technology development, and management.
1. Significance of Foreign Direct investment (FDI)
Foreign direct investment (FDI) plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing
Bibliography: 2005, ‘Determinants of FDI in Australia: Which Theory can Explain it Best?’ research paper, Department of Economics, University of Melbourne. FIRB 2008a, Foreign Investment Review Board Annual Report 2006–07, Canberra, Commonwealth of Australia. 2008b, ‘ Summary of Australia’s Foreign Investment Policy’, Canberra, Foreign Investment Review Board, Commonwealth of Australia.