Appraisal of Foreign Direct Investment Terrain of Brazil

Abstract

Globalization has made worldwide mobility of money easy. Investors prefer to invest in places that offer attractive returns and are relatively less risky. The inflow of FDI gives developing countries access to capital that would otherwise be not available. FDI also provides much needed foreign exchange and thus helps to adjust some of the macroeconomic imbalances in developing countries.  Brazil is in the development mode, trying to boost up the growth rates from all corners, but the resources available are limited and very often insufficient, hence the country is competing against others to make the investment climate more investor-friendly and project itself as an investor-friendly destination for the FDI.  The main objectives of this study are to find out the status of Brazil as a destination for FDI, the factors that attract FDI into Brazil and the factors that hinder the flow of FDI into Brazil. This study is based on secondary data and covers five years.  The study analysis various determinants of FDI like market size, economic growth, infrastructure, political risk, corruption, labor market, raw materials, technological readiness, innovation, financial system, taxation, cost of capital, ease of doing business, and government policies. The study reveals that Brazil’s position in the global FDI map is on the decline as most of its rankings by global agencies are declining.

Keywords: Foreign direct investment, Investment environment, Transnational Corporations

DOI: 10.7176/EJBM/12-23-05

Publication date:August 31^st 2020