Topic > The pros and cons of foreign direct investment

It is assumed that the larger the market size, the greater the FDI inflow (Pajunen, 2008). The second factor required for investment is the likely growth in the size of the market targeted by the investment (Head and Ries 2008). The third factor is the level of productivity, habits and routines of the country's employees. Countries that are on the higher side of productivity are those that attract a greater number of foreign investors. Therefore, it is essential that the country's government focuses on improving employee productivity and therefore investments. The government should focus on improving the country's education system so that adequate knowledge is imparted and more skilled workers are trained (Twomey, 2000). The fourth factor that influences the investment decision of the foreign country is the infrastructure of the country where the investment is made. It is essential to have specific infrastructure that helps create extraordinary, high-value products. It is not necessary to have intellectual property right (IPR) protection in the host country if the foreign investment focuses on local use. In contrast, if foreign investors need to export goods or services for the host country, then the sixth factor comes into play. This last factor says that if the host country's IPRs are not protected, then the investor tends to move to the country that has better IPR protection (Mello, 1997). Host countries must also find a balance between regulating the entry of foreign capital and allowing competition. Provide adequate and knowledge-based knowledge for competitive economies