Impact of FDI on the Development of an Economy and the Growth in the Value of Exports of a Country

The flow of FDI into the country is anticipated to be in a position to expand productivity which will ultimately have an influence on the growth in national income in the form of the Gross Domestic Product (GDP) as well as in the form of increased exports. In other words, in order to enhance the country’s overall performance in international trade, investment is genuinely necessary. There is a one-way relationship between FDI and export in which the value changes in FDl have an effect on changes in the value of exports. In the short term, the extend in the expense of FDl reasons a decline in the value of exports. While in the long term, the extend in the expense of FDl will reason an upward jab in the value of exports the increase in price will cause a upward jab in the fee of exports. . It is activated by the idea of FDI is a subsidizing in long term oriented so that the advantages to the economy, which incorporate export in general execution can be obtained in the long term. Hence, foreign countries can be instrumental in advancing exports from the host nations. As an ever increasing number of exports help lead a nation to expand its foreign exchange reserves and fabricate a strong financial position, in this manner, it tends to be appropriately said that FDI can not just build the export base of the domestic country but additionally adds to the overall growth of the host country.