Comparative Analysis of Foreign Direct Investment Trends in Emerging Economies

Abstract

With the economies of the developed world in dire straits, and signs of recovery seeming increasingly remote, the onus of ushering in a new wave of economic growth has fallen squarely on the shoulders of the BRIC countries (Brazil, Russia, India, China). How these countries will respond to this herculean task will depend upon numerous factors: one of them being trends in their inward and outward Foreign Direct Investments (FDIs). This paper attempts to analyze the past, present and future of FDI policies in BRIC countries and their effects on the health of the economy worldwide. The critical points of analysis of this paper are as follows: (i) To compare data and history of FDI trends in BRIC countries over the last 10 years; (ii) To analyze the effect of government policies on foreign trade in BRIC countries; (iii) To establish an understanding of the effect of the ongoing economic crisis on the existing FDI patterns of developing countries; and (iv) To explore scope for changes in FDI policies in BRIC countries in the future (especially India) and predicting their possible effects. We hope that the analysis done in this paper will serve to shed at least an iota of light on the daunting task of decisively understanding economic growth paradigms in the BRIC nations and their potentially cascading effects on the future economic sustainability of the planet.