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However, without government intervention or imposing regulation on every single aspect of the trend, FDI will have negative impact on domestic markets such as losing profit in local industry due to higher technology and cost effective production line, or negative impact on trade balance of the host country. Government intervention is also playing an important role in preventing MNE(s) from exploiting natural resources, polluting environment and illegally using children labour.
Introduction
Beginning in the mid-1980s, world foreign direct investment (FDI) flows increased rapidly with a growing number of multinational enterprises (MNEs) as the new trend to increase international economic activities...
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