An east‐west contrast of foreign direct investment on small business development

Abstract

Foreign investment continues to play a greater role in business activity across the globe. It is therefore important to assess the main trends and reasons behind this increased activity so that business can make effective decisions on how they wish to engage in further global expansion. The paper further explores the importance of country specific legislation in determining the decision whether to invest. FDI can also have positive benefits on employment and enterprise which will also be considered. This article sets out to contrast the investment flows taking place in both East and Western countries and considers the main determinants of activity in these countries. Theories of internationalisation will be drawn upon as well as the use of investment data in order to explain investment behaviour. A Business History perspective will also be drawn upon. The article then considers future possible trends in light of these recent developments.