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Foreign Direct Investment

Introduction

Poor and developing countries such as India continue to be so because of low accumulation of capital for investment in different sectors of their economies. Though capital may not be the only hindrance to economic growth, it is one of the most important impediments. Capital as one of the factors of production with other resources such as land, labour and organizational set-up can be defined as the ‘produced means of production’ in the words of the Austrian economist, Eugen von Bohm-Bawerk (1851–1914). Unspent incomes have to be saved and invested productively. Without capital, land will be barren, labour idle and organization rudderless. Capital is necessary to exploit a country’s natural resources, ...

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