Ijodkor o‘qituvchi jurnali

IJODKOR O‘QITUVCHI JURNALI
 
5 YANVAR / 2022 YIL / 14 – SON 
85 
FOREIGN DIRECT INVESTMENT, TRADE AND ECONOMIC GROWTH. 
Ro‘zimurodova Muhabbat 
Teacher of Termez State University 
Annotation: 
This article describes the impact of foreign direct investment on 
development of the country, in particular one of the most important in the context of 
macroeconomics -the contribution of foreign investment to economic growth.
Keywords:
Foreign investment, Model of Optimal Economic Growth, Capital goods, 
Domestic investments, Households, permanent management, Micro-level.
INTRODUCTION
The positive effect of FDI is not limited to the scope of the enterprise or industry, 
foreign investment once additional effects on the rest of the economy, therefore their impact 
economic growth is often more than domestic investment.
FDI is not only about inflows capital to the country, but also the corresponding influx of 
technology and know-how, as well as standards corporate governance, the question arises 
about the country's willingness to accept data innovation, which is associated with the level of 
its development.
MAIN PART
Foreign direct investment (FDI) plays an important role in the country's well-being and 
economic development. First, FDI is not only a capital surge in country, but also the 
accompanying tide of technology, management, etc. Second, FDI increase competition and 
contribute to the development of small and medium-sized businesses. Thirdly FDI has a 
positive impact on employment in the country and increases the level of income of the 
population. 
Fourth, they help reduce the trade deficit by reorientation of consumption from goods 
produced abroad to goods, manufactured in the country at enterprises with foreign capital. 
FDI affects economic development, welfare and growth in the host country. However, along 
with the overall positive impact of FDI on the economy, one cannot but take into account the 
fact that these investments are not neutral for many macro parameters, primarily for domestic 
investment and private consumption.
Foreign investment can crowd out domestic investment, thereby slowing down the pace 
economic growth, which requires a more careful analysis of the effects of FDI inflows 
especially in countries with a low level of development, where there is high competition for 
investment in profitable business. On the other hand, in most cases, the degree of influence of 
FDI on economic growth is higher than direct domestic investment (FDI) and due to this the 
negative crowding out effect can be compensated for. An additional, not yet fully explored 
aspect of the influence of foreign direct growth investment in developing countries is linked to 
a country's ability and speed adaptation of foreign investment. Due to the fact that FDI is not 
only an inflow capital to the country, but also the corresponding influx of technology and 
know-how, as well as standards corporate governance, the question arises about the country's 
willingness to accept data innovation, which is associated with the level of its development. In 

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