Literature On Key Challenges Influencing Foreign Direct Investment Inflows: A Case Study Of Saudi Arabia

Abstract

Foreign Direct Investment (FDI) is widely acknowledged as a powerful tool to boost economic growth (EG), playing a crucial role in fostering accelerated development and promoting economic growth and diversification, particularly in developed countries like Saudi Arabia (SA). This paper delves into reviewing various research studies, offering a comprehensive exploration of Foreign Direct Investment (FDI) on a global scale. Consequently, it identifies the paramount challenges within host countries that significantly influence the inflow of FDI, along with key factors and challenges that practically impact FDI in the Saudi market. It investigates the economic dependence on politics, regulatory hurdles, social and cultural considerations, infrastructure, and the impact of Vision 2030, a transformative economic and social development plan. The challenges faced by the host country in attracting FDI include the need to strike a balance between attracting FDI and protecting national interests, ensuring compliance with local regulations and standards, managing the impact on the environment and natural resources, and addressing potential negative effects on local industries and employment. Policymakers, investors, and scholars need to work together to develop strategies and policies that mitigate these challenges and maximize the benefits of FDI for both the host country and the investor.