Acknowledgement

Foreign Direct Investments (FDI)

The impact of foreign direct investment also has a strong impact on economic growth. The following research is based on the example of South Africa, as these countries are also among the developing countries, but with weak economies and therefore this example is very similar to Tajikistan. Governments throughout the world have come to the view that foreign direct investment (FDI) is necessary to spur economic development in their own nations in recent years. This is particularly true in developing countries. It is said that foreign direct investment (FDI) may help to generate jobs, advance technical progress in the host nation, and enhance the overall economic state of the country.
In most African nations, insufficient resources to fund long-term investment is a key source of contention. Insufficient investible money is a significant impediment to economic progress, making it more difficult to attain the millennium development goals (MDGs) by 2015, as set out by the United Nations. Most African governments recognize that foreign direct investment is a primary source of obtaining the capital necessary for investment; as a result, most African countries provide incentives to attract FDI (United Nations, 2005: 2) As well as facilitating the availability of investible money, foreign direct investment (FDI) inflows to developing countries are expected to generate externalities via knowledge transfer and the spill-over effect (Carkovic and Levine, 2002), which have a long-term impact on the economy. Foreign direct investment (FDI) is the investment made by a firm in a nation other than its home country. A flow of long-term capital based on long-term profit considerations that is engaged in foreign manufacturing is defined as follows: (Caves, 1996). This definition is true, but it is not comprehensive, since it does not address the critical concerns of control and management that must be addressed. International investment may be divided into two categories. The kind of investment might be either a portfolio investment, in which the investors purchase a non-controlling percentage of the stock, bond, or any other financial asset, or a direct investment, in which the investor engages in the control and management of a particular business endeavor. Typically, multinational corporations would make this sort of investment, and it has the potential to contribute far more to economic development than a traditional portfolio of investments. Internationalized production, according to Robert E. Lipsey (1999), is the result of foreign direct investment. His definition of this kind of investment is one that entails some degree of influence over the purchased or formed enterprise that is located in a nation other than the investor's home country. He defines it as follows: Foreign direct investment (FDI) differs from portfolio investment in that it involves direct participation in the control of the venture.