Economics (AS & A Level) · Oct / Nov 2025 · Paper 34 · Question 30

Which criticism of foreign direct investment (FDI) is least valid?

1. AIt encourages competition, reduces prices and forces the less efficient domestic firms to leave the market.
2. BIt brings workers from its own country and provides only low paying jobs to low skilled local workers.
3. CIt is usually withdrawn quickly in case of a global crisis, making developing countries more vulnerable to global shocks.
4. DIts actions often result in environmental degradation, and over exploitation of natural resources.

As printed in the paper