Topics: Investment, United Kingdom, Economics Pages: 3 (631 words) Published: November 4, 2014
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1.1 Background and context:
Foreign direct investment has notable impacts on the economy of any country because it stimulates the economic factors like GDP growth, exchange rate, and employment rate and export earnings. The importance of inward foreign direct investment in the UK is increasing day by day because it is working as a source of social economic development (Velde, 2004). United Kingdom has become a prime attraction to the investors because there is cultural, locational and geographical diversity in the UK (Matteo, 2007). Many countries of the world have a positive attitude towards foreign direct investment because of its positive impacts on the economy. United Kingdom treats foreign direct investment as a key driver of social and economic development (Crete, 2001). Moreover, the strategies and policies of the UK government have played a significant role to attract the foreign direct investment since 50’s to late 90’s, which ultimately contributes to the export earning, employment creation and overall development (Estrin, 2010). But the recent disorder of in the European zone has also affected the economy of United Kingdom. According to Whyman (2004), United Kingdom is suffering from a lot of problems in attracting foreign direct investment because of recent worldwide economic turmoil. The total Euro zone is passing hard times since the beginning of Euro zone crisis. So, if the economy of the UK can be stimulated positively with the sufficient flow of foreign direct investment, it will positively stimulate the total economy of the euro zone. That’s why; this study is concern about determining...
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