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Examines governmental attitudes towards Foreign Direct Investment.

... being preferable to other forms of foreign capital inflow, such as commercial borrowing and portfolio investment. Furthermore, it is considered to be eminently advantageous in its own terms, and something to be actively sought by governments of developing countries. In fact, access to more FDI is now touted as one of the major benefits of the recent economic globalization, which is supposed to outweigh its many negative effects governments regulate foreign direct investment (FDI) to improve the economy of their country.
In particular, they seek to improve the balance-of-payments position by a number of ways. In the past many governments chose to restrict capital flows out of their country, to limit local borrowing by foreign investors, or to stipulate that a part of the capital inflows must be in the form of loans rather than equity.
According to UN estimates, foreign direct investment flows to the world's developing countries grew from $31 billion in 1990 to $80 billion in 1993. All of the ten largest recipients of foreign direct investment in the period from 1988 to 1992 were from the Big Emerging Markets. During the period from 1989 to 1993, U.S. direct investment in the BEMs increased from $6.1 billion per year to $13.7 ...

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