Factors Contributing to Foreign Direct Investment in Mongolia

Since the 1980s, globalization has led to a rapid increase in the growth of foreign direct investment (FDI) all over the world. Mongolia for more than a decade has been in the process of radical transformation and has taken significant steps to build a market-based economic structure. Foreign Direct Investment plays a very important role in achieving rapid economic growth in the developing countries. This can be achieved by taking advantage of available mobilizing domestic savings, foreign capital, technology transfers, establishment of new premises and favorable foreign policies It is now widely acknowledged that FDI has potential benefits that can accrue to developing countries. This view is mainly based on the neo liberal and development economists. They suggest that FDI is crucial for economic growth as it provides the much needed capital for investment, increases competition in host countries economies, and helps local firms to become more productive by adopting more efficient technology or by investing in human or physical capital [1]. FDI is also said to contribute to growth in a substantive manner because it�s more stable than other forms of capital flows. This paper investigates the key drivers of foreign direct investment (FDI) in Mongoli