Topics: Investment, Foreign direct investment, Macroeconomics, Development, Bangladesh, International economics / Pages: 23 (4293 words) / Published: Aug 12th, 2014
1.1 Introduction
As a developing country, Bangladesh needs FDI for its ongoing development process. It is a potent weapon for developing the economy and achieving the country’s socio-economic objectives. The climate for investment is determined by the interplay of a whole set of factors: economic, social, political, technological and environmental that has a bearing on the operation of businesses. Foreign direct investment (FDI) has the potential to generate employment, raise productivity, transfer skills and technology, enhance exports, and contribute to the long-term economic development of the world’s developing countries.
Globalization is changing the strategies of multinational companies (MNCs) and the way developing countries compete for FDI. FDI encourages the transfer of new business, technology and knowledge and it allows the host economy or country to promote its products more widely in international arena. Policymakers and multilateral organizations have increasingly emphasized the importance of a sound investment climate and flow of FDI for promoting economic growth in developing countries. The FDI has three components like Equity Capital, Intra Company Loan and Reinvested Earning.
FDI inflows generate jobs through new establishments and expanded activities, and indirectly increase competition within domestic markets and facilitate the transfer of improved technology and management techniques. For the investor, the potential benefits lie in penetrating a market, gaining access to raw materials, diversifying business activity, rationalizing production processes and overcoming some of the drawbacks of exporting, such as trade barriers and transport costs. FDI also enables companies to learn about the host market and how to compete in it.
There should have the FDI opportunities to attract the foreign MNC, there are many FDI opportunities in Bangladesh but the FDI growth of our neighboring country (like India) is very high moreover the government

References: Bangladesh Bank Statistics Department, 2013 Foreign Direct Investment Survey in Bangladesh. Abu Rayhan Md., (December 2009), Foreign Direct Investment in Bangladesh: Problems and Prospects. Donald R FDI Inflow Survey (2013), Board of Investment (BoI), Bangladesh. Abdullahel Kafi Md., Main Uddin Mohammad & Islam Muzahidul, (December-2007), Foreign Direct Investment in Bangladesh: Problems and Prospects Md. Ghulam Murtaza,(2008). Determining FDI Potential: Are National Policies and Incentives Sufficient? Bangladesh Economic Review (2009), Export Promotion Bureau of Bangladesh. Annual Report of Bangladesh Bank (2013), Bangladesh Bank. UNCTAD, (2012), World Investment Report (2012): Inward and outward foreign direct investment flows. Foreign Trade Statistics of Bangladesh (2012) Bangladesh Bureau of Statistics. Statistical Pocket Book Bangladesh (2012), Bangladesh Bureau of Statistics.

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