Technology and Foreign Direct Investment’s Relationship With Trade

Trade plays an important role in contributing towards the economic performance of a country. For certain country, especially small nations, trade performance affect significantly the gross domestic product (GDP) of a country. In discussing this, there is a large body of literature which explain factors that influence trade. Population of trading countries, bilateral exchange rate, income of trading countries, trade agreements involving trading nations, geographical distance between trading nations, geographical condition between trading countries, the existence of multinational companies in partner trading countries, historical connection and similarities of language, foreign direct investment and technological advancement and adaptation, culture and food are among factors that have been discussed extensively in the literature.