Partnerships for the Goals

Living Edition
| Editors: Walter Leal Filho, Anabela Marisa Azul, Luciana Brandli, Pinar Gökcin Özuyar, Tony Wall

Partnerships for Development and the SDG17: Role of Foreign Direct Investment

  • Cláudio Castelo Branco PutyEmail author
  • Douglas Alencar
Living reference work entry
DOI: https://doi.org/10.1007/978-3-319-71067-9_6-1

Definition

Foreign direct investment, according to the benchmark Organization for Economic Cooperation and Development (OECD) definition (2008), is a “category of cross-border investment made by a resident in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the direct investor.” The motivation of the direct investor may be the search for new markets, access to natural resources, logistic advantage, or simply lower production costs, either in the form of cheaper labor or taxes.

A higher level of foreign direct investment means that additional capital is injected and, depending on the sector, is likely to have an impact on its growth rate, as it is equivalent to foreign savings diverted from the investing economy into the domestic market. Thus, if FDI is not counterbalanced by various forms of remittances, it can be a robust engine for structural...

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Cláudio Castelo Branco Puty
    • 1
    Email author
  • Douglas Alencar
    • 1
  1. 1.Graduate Program in EconomicsFederal University of ParáBelémBrazil

Section editors and affiliations

  • Monica Thiel
    • 1
  1. 1.School of Public Administration and School of Business AdministrationUniversity of International Business and Economics & China University of PetroleumBeijingChina