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ECOP1003 Long Essay
ECOP1003 - International Economy and Finance
12 Pages • Essays / Projects • Year: Pre-2020
Conventional scholarly research tended to show that foreign direct investment could contribute to higher economic growth, increasing employment and wage level, higher trade volumes and technology spill-over effect in host country. However, counter arguments challenge those views and place conditions upon on which such positive co-relationship can exist or sustain. These conditions include whether host country has sufficient human capital to absorb advanced management styles and technology, and whether the host country could exert bargaining power over multinational companies. In this essay, I will first examine the reason why FDI could generate economic growth using Solow growth model, and then using specific factors model and Heckscher-Ohlin model to illustrate the short run and long run effect
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