Abstract:
Foreign Direct Investment (FDI) refers to an investment made by a person or a company
from one country into a business based in another country, with the aim of acquiring
lasting control and interest over the investment. This type of investment promotes
the flow of capital, technology, and employment across nations. When a country is
on the verge of an economic breakdown, most enterprises hesitate to invest in those
countries. So that it is of great importance to identify the determinants that influence
the attraction of FDIs. Therefore, this research has been conducted to identify the
frequently discussed determinants that impact the attraction of FDIs. Furthermore, only
a limited number of studies have been conducted during economic crises. It presents
a comprehensive overview of the past literature on the determinants that affect the
attraction of FDIs and the importance of FDIs in a period of an economic crisis. During
a financial crisis, developing and bankrupt countries must attract more FDIs to survive
and grow their economy. Therefore, after analyzing the past literature, the authors
have identified that characteristics like fair tax systems, trade openness, GDP, political
stability, and proper infrastructure facilities are the factors that need to attract FDI.
Hence, developing and bankrupt countries must consider the above factors and try
to improve those factors to make the country more attractive to foreign investors. A
limited number of publications were found on attracting FDIs during a financial crisis.
This study will help future researchers understand the importance of the factors that
influence the attraction of FDIs to a developing country during an economic crisis.
