In the context of globalization and the liberalization of economies, investment has emerged as a key driver of economic development and competitiveness among nations. Investment flows, particularly foreign investment, have become indispensable for fostering economic growth, creating employment opportunities, enhancing technological capabilities, and promoting integration into the global economy. Governments, especially in developing countries, have been increasingly engaged in policy reforms and strategic initiatives aimed at creating favorable environments to attract both domestic and foreign investments.
Foreign investment, in particular, plays a crucial role in bridging the savings-investment gap faced by many developing economies. It contributes not only to capital accumulation but also brings with it advanced technologies, management know-how, and access to international markets. Understanding the nature and types of investment—especially the distinctions between direct and indirect forms—is fundamental for policymakers, investors, and scholars alike. This paper aims to provide a comprehensive overview of the concept of investment, its classifications, and a detailed analysis of foreign investment, including its types, features, and strategic implications for host countries.
- Teacher: Nadia Zouggaret