Balancing Repatriation and Growth: a Foreign Direct Investor's Dilemma

EasyChair Preprint no. 12848

Abstract

The decision-making process of foreign direct investors (FDIs) is a complex and multifaceted one, influenced by a variety of factors including economic, political, and social considerations. One key dilemma faced by FDIs is the delicate balance between repatriation of profits and the pursuit of sustainable growth in the host country.

This abstract explores the challenges and trade-offs that FDIs encounter when seeking to maximize their returns while simultaneously contributing to the economic development and welfare of the host nation. It highlights the importance of striking a balance between repatriation and growth, recognizing that an excessive focus on profit repatriation may hinder long-term sustainability and hinder a positive relationship with the host country.

FDIs often face pressure from their home countries to repatriate profits, as these funds contribute to domestic economic growth and shareholder returns. However, a singular focus on repatriation can undermine the potential benefits that arise from reinvesting profits in the host country. By reinvesting in local operations, FDIs can foster technological advancements, job creation, skills development, and infrastructure improvements, all of which contribute to sustainable growth and social progress.

The dilemma arises from the need to satisfy both the expectations of investors and the interests of the host country. Striking the right balance requires a comprehensive understanding of the local business environment, regulatory framework, cultural nuances, and social dynamics. Successful FDIs engage in dialogue and collaboration with local stakeholders, including government bodies, communities, and non-governmental organizations, to align their goals with those of the host country and mitigate potential conflicts.

Keyphrases: Business, economy, growth

@Booklet{EasyChair:12848,
  author = {Favour Olaoye and Kaledio Potter},
  title = {Balancing Repatriation and Growth: a Foreign Direct Investor's Dilemma},
  howpublished = {EasyChair Preprint no. 12848},

  year = {EasyChair, 2024}}