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How does increased competition through FDI in the form of greenfield investments affect the host country

User Myxtic
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Answer: It drives down prices and increases the economic welfare of consumers.

Step-by-step explanation:

Greenfield investment is a form of Foreign Direct Investment where the investors build a facility/ies in the host nation from scratch as opposed to buying or leasing one.

With increased competition from greenfield investments, consumers would be better off because there will be more quantity of the relevant good available in the market. This will lead to the prices falling and consumers being able to afford more of the good at higher qualities.

User Kieron Hardy
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