A New Model to Attract Foreign Direct Investment into Bangladesh

Abstract

Bangladesh is a least developed country (LDC), not only LDcs but also developing even developed economies are offering special benefits to attract Foreign Direct Investment (FDI) inflow. This is because FDI brings some special benefits into the host country. These are as follows: 1. FDI brings access to international market: An MNC has some market share in various countries. It focuses into the existing market to export products from its new destination. As a result local competitors can get access to that market like the MNC does. 2. FDI brings access to foreign sources of supply: A local firm similar to the FDI one can get international sources of supply of quality raw materials in a competitive price like the MNC does. 3. FDI brings management know-how: Multinational companies have a proven managerial practice which leads them into success. These managerial practices are transfer into the host country organization with drop put of managers into those companies. 4. FDI facilitate transfer of knowledge and technologies into the host country. Knowledge may be relevant to product or process or marketing techniques. Technology transfer facilitates product diversification and up gradation of standards. 5. FDI generates employment which resultants into skill development of the native labors, supervisors and managers. 6. Finally FDI creates a competitive business environment which helps to increase efficiency of local firms and make them more competitive.