Origin of Foreign Direct Investments

Aida Saraçi

Abstract


Since ancient times people moved from one place to another with the purpose of exchanging goods of a country with those of another one to attain what was missing in the country where they lived. These first exchanges were product to product and latter was introduced in circulation on the money as exchange to the product. These first forms of trading were increasingly altered even more today where capital moves from one country to another. Foreign Direct Investments, FDI is a relatively new phenomenon in the entire globe. This phenomenon that has affected global economic growth and improved living standards, received notable development in the XXI century in the form of loans that English economy uses to finance economic development in different countries as well as in the form of ownership of financial assets. Developments of the early XXI century are demonstrating that in this globalized world the opportunities for trading exchanges, for providing quality services without frontiers of languages or distances, are without limits and extraordinary. There are many different theories developed over the years in order to give explanation the creation or appearance of multi- national enterprises. These are divided into two groups: macroeconomic theory that tries to give an explanation in terms of general economic and microeconomic theory that seeks to find a different explanation in terms of the individual in which an enterprise operates. Therefore all the theories that have been examined so far cannot be considered as general theory of investments. Each one of them starts from different assumptions and explains various aspects of the phenomenon, thus we are talking about a partial theory.

DOI: 10.5901/mjss.2014.v5n7p48


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Mediterranean Journal of Social Sciences ISSN 2039-9340(Print) ISSN 2039-2117(Online)

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