Published Online:October 2025
Product Name:The IUP Journal of Management Research
Product Type:Article
Product Code:IJMR021025
DOI:10.71329/IUPJMR/2025.24.4.14-27
Author Name:Sarah Cabbot and Carolan McLarney
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:14-27
Foreign direct investment (FDI) has emerged as a central driver of economic growth, enabling host countries to benefit from capital inflows, technology transfer, managerial expertise, and employment opportunities. Yet, attracting FDI is not an easy process; it depends on the presence of favorable structural and institutional conditions. This paper investigates the determinants that shape a country’s capacity to attract and sustain FDI, emphasizing both short-term incentives and long-term development strategies. The paper focuses on the ways in which the delivery of free education has played a key role in Sri Lanka’s attractiveness for FDI. The study examines the framework for FDI and the education policy within Sri Lanka, examining some of the challenges the national education framework faces, considering accounting education as an example of a system that was not aligned with the changing needs of the industry. However, Sri Lanka’s current educational focus recognizes the importance of a strong knowledge economy for sustainable growth and market competitiveness within a globalized economy.
In modern times, FDI has been one of the best sources of global capital for both developed and developing economies. This global capital has been a driver of economic growth for those countries that can attract, harness and utilize its capabilities. FDI is not merely the transfer of capital from one country to another through establishing subsidiaries and joint ventures, or acquiring local firms; it is also the transfer of management skills, technological innovation, and employment opportunities.