The rapid expansion of global digital networks has led to substantial inflows of foreign direct investment (FDI) into emerging market economies. Multinationals from developed economies are increasingly establishing tech hubs, data centres, and manufacturing facilities in regions like South Asia and East Africa. While critics argue that this can lead to the exploitation of local resources and the repatriation of profits back to the home countries, proponents suggest that these investments are vital for host nations to leapfrog traditional development stages.
In the long term, these capital inflows can foster local supply chain development, transfer modern management practices, and significantly boost labor productivity in the host nation.
Extract C refers to the potential benefits for emerging economies when they receive foreign direct investment (FDI) from multinational corporations.
Explain the term 'foreign direct investment' (FDI) and analyse two possible economic benefits for a host developing economy when it receives inward foreign direct investment in its technological or manufacturing sectors.
310 exam-style questions on AQA A Level Economics 2.6 The international economy (A-level only), covering 2.6.1 Globalisation, 2.6.2 Trade, 2.6.3 The balance of payments, 2.6.4 Exchange rate systems, and 2.6.5 Economic growth and development. Each one has a worked solution and a mark scheme showing where the marks go.