Foreign Investment in the Age of Globalization

Summary Brazil, along with many other emerging market countries has attracted a large amount of Foreign Direct Investment (FDI) in the last decade. The role FDI plays in the modern Brazilian economy is different than in its previous incarnations. The latter included the necessary investment to build a primary export economy, and the manufacturing facilities associated with import substitution industrialization. Modern day FDI is attracted to Brazil due to macroeconomic stability, privatization, changes in the legal status of foreign capital, and as part of a large inflow of capital into emerging markets. The new involvement of foreign business, like the old, brings with it both costs and benefits.