Foreign Direct Investment

Foreign direct investment occurs when a firm invests resources in business activities outside its home country. Many barriers to international trade took the form of high tariffs on imports of manufactured goods. Such tariffs aimed to protect domestic industries from "foreign competition". In addition to reducing trade barriers, many countries have also been progressively removing restrictions on barriers to foreign direct investment (FDI). According to the United Nations, between 1991 and 1996 more than 100 countries made 599 changes in legislation governing FDI. …