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February 11 MOS Lecture

February 11 MOS Lecture - Licensing can be very risky o...

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FDI – CHAPTER 7 (look at charts and determine their meaning) - FDI: the acquisition or construction of physical capital by a firm from one source country in another host country - MNE: a firm that owns business operations in more than one country - Green Field Investment Why FDI? - Because limitations of exporting an licensing as means for capitalizing on foreign market opportunities o Limitations of exporting Cost Government restrictions: limits on the amount exported o Limitations of licensing
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Unformatted text preview: Licensing can be very risky: o Lose trade or production secrets o May lose control over quality, marketing strategy, etc. o May lose advantage if success depends upon marketing, distribution, etc rather than just the production itself Benefits of FDI to the Nation State-Host country-Source/home country Benefits vs costs of FDI to nation state-Implications?-Do benefits outweigh costs?-Most FDI is still between developed countries: is that good or bad?...
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