Foreign direct investment can have both benefits and drawbacks for developing economies. At early stages, FDI can accelerate structural changes but may not immediately generate growth and can widen foreign trade gaps. However, at mature stages FDI promotes higher economic growth, more exports, and an improved trade balance. The benefits of FDI for developing economies include creating no debt for governments, assisting human capital formation, increasing productivity and competitiveness, promoting exports, and bringing technical know-how, business expertise, and knowledge since domestic capital may be inadequate. However, the drawbacks include harming small retailers and shopkeepers by creating monopolies, having adverse effects on capital accounts, and potentially raising prices in a way that low income groups cannot afford.