There are many parties involved benefiting from foreign direct investment. Investors and recipients as well as the global economy in general can enjoy the benefits provided by FDI. Business forms with the most promising growth receive capital the most often, regardless where they are in the world. Typical investors tend to look for the kind of investment opportunity that offers them the best profit with the least risk. This is a color-blind motive of profit-seeking. As such, it does not regard matters such as political views or religion. Competitive advantage is presented to all manners of business form on equal footing despite having different backgrounds.
As a result, many negative aspects of business, such as politics, bribery, and cronyism can be tackled. The best business wins the money. With supports from FDI, a business’ products or services can go to market in a way that is faster than a business that is not backed up by an FDI. Individual investors may enjoy added benefits in the form of lowered risk. As FDI may diversify holdings outside of political system, industry, or country, return is always increasing but without increased risk either.
Investing party can also provide a number of advantages that the recipient can enjoy. This includes best practices guidance in regards to legal matter, accounting, and management. The recipient business can incorporate and implement the latest technology, practices of operational, and tools for financing as well. When the business adopts and applies these practices, they would also improve the lifestyle of their workers as well. People in the recipient country can enjoy a better and improved standard of living. The implementation of foreign direct investment also impacts on reduced influence that the local government may have over the recipient businesses. Foreign direct investment is indeed a very rewarding system.