FDI constitutes both positive and negative impacts. FDI has certain positive impact on the host country’s economy through capital and technology transfer. These include:
Stimulation to domestic economy (through new ideas, products, technology, skills and capital)
Intensification of competition Negative impact of FDI include:
I. Over dependence of the host country on foreign technology
II. Threats to domestic industries
III. Distortions in wages/salaries structures
IV. Deter mental effects on culture, values and lifestyles
V. Political purpose and distortions.