Foreign Direct Investment and Economic Growth in Developing Countries

Abstract

Countries of the world require financial capital for economic growth and development. It lubricates the wheels of the economy for development. The developed countries of the world held on to continuous capital investments in the economy and these resulted in rapid economic growth. The case of most developing countries is different. They do not have sufficient capital to be invested in their economy; therefore, they need to depend on the external hands of the developed countries. The research question is, What is the prospect and bane of foreign direct investment on the economy? The theoretical framework of dependency theory is used to analyse the prospect and bane of foreign direct investment. The methodology adopted utilises data from the World Bank, which is analysed using descriptive techniques. The chapter concludes that over dependent on the foreign direct investment will make the recipient countries as an extension of the donor countries.