Week 3 discussion notes

Week 3 discussion notes - Week 3 discussion notes: THE...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Week 3 discussion notes: THE DIRECTION OF FDI: Historically, most FDI has been directed at the developed nations of the world as firm based in advanced countries invested in the others’ market. (pg. 241) Even though developed nations still account for the largest share of FDI inflow, FDI into developing nations has increased. From 1985 to 1990, the annual inflow of FDI into developing nations averaged 27.4 billion, or 17.4 percent of the total global flow. In the mid to late 1990s, the inflow into developing nations was generally between 35 to 40 percent of the total, before falling back to account for about 25 percent of the total in 2000 – 2002 and then raising to 44 percent in 2004. (pg. 242) HORIZONTAL FOREIGN DIRECT INVESTMENT: Horizontal FDI is investment in the same industry abroad as a firm operates in a home. We need to understand why firms go to the trouble of acquiring or establishing operations abroad, when the alternatives of exporting and licensing are available. FDI is expensive because a firm must bear the cost of establishing production facilities in a foreign country or of acquiring a foreign enterprise. FDI is risky because of the problems associated with doing business in another culture where the “rules of the game” may be very different. Relative
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/22/2011 for the course MGMT 3105 taught by Professor Jennyswearingen during the Spring '11 term at Walden University.

Page1 / 2

Week 3 discussion notes - Week 3 discussion notes: THE...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online