ABSTRACT
National economic conditions can be major determinants of national goals and strategies, and so may influence regulations in general, and those directed towards foreign direct investment (FDI) in particular. These conditions include the size of the domestic market, income levels, wage rates and labour force availability and skills, the nation's growth rate, the balance of trade and payments, and the external debt situation. The changing structure of the economies of many countries has led to increased pressures to open service sectors to foreign investors in order to promote international trade. In twentieth-century Canada, manufacturing expanded through the structure of foreign-owned subsidiaries, reaching a point where Canada experienced the highest degree of foreign ownership of any industrialized country. Indonesia illustrates the linkages between economic conditions and political conditions as the forces impact FDI restrictions. In the late 1980s, Mexico faced the need to combat inflation and to increase economic growth, and this altered the government's general attitude towards foreign investment.
