Lecture notes 4 IFM VK - Introduction of the class Motives...

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Introduction of the class Motives for and benefits of FDI International diversification Country risk International Financial Management II - 2017/S Lecture notes 4 - Foreign Direct Investment Maria Chiara Iannino 30th May 2017 IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk Outline Introduction of the class Motives for and benefits of FDI International diversification Diversification examples Country risk IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk Long-term Asset and Liability Management IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk Today’s lecture I To describe common motives for initiating direct foreign investment (DFI). I To illustrate the benefits of international diversification. Today’s Reading list: Madura and Fox, chap. 13 IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk Outline Introduction of the class Motives for and benefits of FDI International diversification Diversification examples Country risk IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk Motives for FDI Foreign Direct Investment : investments in real assets in foreign currencies. involving at least 10% ownership interest in legally recognized foreign entity. MNCs commonly consider FDI because it can improve their profitability and enhance shareholder wealth. In most cases, MNCs engage in FDI because they are interested in boosting revenues, reducing costs, or both. IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk Example In the early 1980s, Honda (Japanese carmaker) built an assembly plant in Marysville, Ohio and began producing cars for North American market. I these cars were substitutes for imports from Japan I as the production capacity at the plant expanded, Honda began to export cars in other markets, including Japan I the investment was welcomed by Japanese Government, the state of Ohio and UAW Factors that motivated the investment: I Circumvent trade barriers: 1981 Voluntary Restraint Agreement I Improve competitive position relative to its domestic rivals Toyota and Nissan IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk FDI inflows World Investment Report 2014 IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk FDI inflows Top 20 host economics 2014-2015 World Investment Report 2016 IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk FDI outflows Top 20 host economics 2014-2015 World Investment Report 2016 IFM VK
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Introduction of the class Motives for and benefits of FDI International diversification Country risk FDI inflows (in USD) 1995-2013 World Investment Report 2014 IFM VK
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Introduction of the class
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