Development, Economic geography, Macroeconomics

TOC o 1-3 h z u HYPERLINK l _Toc293665298 Question 2 Foreign Direct Investments (FDIs) Good or Bad for the Developing Countries PAGEREF _Toc293665298 h 3The root cause for adopting Foreign Direct Investments (FDIs) as the most significant elements for economic development can be identified in the theory of capital as presented by Kaldor (1962). According to the theory, it is assumed that capital allocation is quite significant for the development of economies. Capital allocation is defined as the strategic alliance to augment the means of production in a country which can further be identified as the physical infrastructural inputs, such as factories, warehouses, transports and other elements excluding human and financial variables (Kaldor, 1962).