FOREIGN DIRECT INVESTMENT AS A CATALYST FOR ECONOMIC DEVELOPMENT

Foreign direct investment (FDI) is, along with international trade, an integral element in achieving increased living standards and economic prosperity - not just for economies as a whole, but also for individuals, consumers and companies. FDI is investment by foreigners that actively involves investors in the operations of local companies, and has played a major role in the development of most western and newly emerging economies over the last fifty years. Meanwhile, most countries regard FDI as the main catalyst for their economic development. This is often based on an implicit assumption that greater inflows of FDI will lead to the development of a national economy. This research paper critically examines the role of FDI within the context of the Australian economic development.