Benefits of Foreign Direct Investment Research Proposal

Benefits of Foreign Direct Investment - Research Proposal Example Despite its economic significance, on political grounds, FDI is a very controversial term as it is marred by controversies and political victimization, especially in developing countries. Iran is one such case where FDI has mostly remained a political issue despite the fact that Iran held one of the largest oil reserves in the world. Over the period of time, due to international sanctions, the process of Foreign Direct Investment has remained stagnant due to political hostility towards Iran. However, despite such a situation, due to Iran's strategic oil & gas reserves, many countries such as China, Pakistan, India as well as other European countries made a foreign direct investment into the country. Jensen (2004) is of the view that institutional lending by supernatural institutions such as IMF has very complex and perplexing impacts on the economic performance of the countries due to institutional interference and policy dictations made by such institutions lower the flow of foreign direct investments into the developing countries. Foreign Direct Investment has multiple consequences for the countries as it not only create an impact on the economic situation of the country but also has consequences on the political as well as social environment of the country. (Kudrle & Bobrow, 1982). The question of foreign direct investment is therefore largely viewed within the perspective of the presence of foreign influence in the country as non-domestic entities tend to control some of the strategic assets of the country. The nature of foreign direct investment into developing countries is therefore largely considered more like a political action rather than an economic impact. This research study therefore will consider following research question "The nature of foreign direct investment key determinants in Iran " The above research question has been selected keeping in view the diverse impacts of foreign direct investment on the overall economy of the country especially in presence of different institutional arrangements such as economic sanctions, IMF/World Bank lead lending as well as openness to the free market policies adopted by the receiver countries.