Foreign Direct Investment: Theories, Rationale, Costs and Benefits

Multinationals sometimes influence the host country in
implementing policies that are favourable to
themselves but which are unfavourable to the local
communities. This is also considered to constitute a
cost of FDI. Governments are therefore encouraged to
implement policies that make the country attractive for
foreign direct investment whilst ensuring that the
interests of the locals are also served through corporate
social responsibility measures and proposals which are
offered by multinational companies.