Factors Influencing Foreign Direct Environment
MD3042 CONTEMPORARY ISSUES IN GLOBAL BUSINESS MANAGEMENT
Factors Influencing Foreign Direct Investment
The world is becoming a global village and more companies are now operating at an international level. This essay critically analyses some of the factors which influence Foreign Direct Investment (FDI). Morrison (2006) defined FDI as the establishment of a company of a productive nature in a foreign country involving large volume of shareholding in foreign operations. The essay will investigate how important FDI is in the process of globalisation and in the activities of multinational enterprises as well as examining how international trade and FDI are interlinked. There will also be a discussion of different reasons why companies decide to go international as this will highlight some of the factors which influence FDI, the benefits of FDI to both the host and home countries will be taken into account. In addition, the essay will look at different types of FDI and how these differ from each other as well as identifying strategies underlying each of these FDIs. Issues which can have a negative impact on the company’s decision to go overseas will be critically investigated and identify why other organisations do well while others are failing after making the decision of going overseas.
Furthermore, the essay will also look at the factors which should be considered by an organisation prior to making a decision of investing overseas. The essay will also discuss Political, Economical, Social and Technological (PEST) factors which can either have positive or negative impact on the company’s decision to go international. There are so many benefits and risks associated with FDI. There will be an examination of the benefits as to whether both the international company and the host country benefit from the investment as well as analysing whether both foreign and domestic countries equally enjoy the benefits of FDI.
According to Chryssocoidis et al (1997) there are
Factors Influencing Foreign Direct Investment
The world is becoming a global village and more companies are now operating at an international level. This essay critically analyses some of the factors which influence Foreign Direct Investment (FDI). Morrison (2006) defined FDI as the establishment of a company of a productive nature in a foreign country involving large volume of shareholding in foreign operations. The essay will investigate how important FDI is in the process of globalisation and in the activities of multinational enterprises as well as examining how international trade and FDI are interlinked. There will also be a discussion of different reasons why companies decide to go international as this will highlight some of the factors which influence FDI, the benefits of FDI to both the host and home countries will be taken into account. In addition, the essay will look at different types of FDI and how these differ from each other as well as identifying strategies underlying each of these FDIs. Issues which can have a negative impact on the company’s decision to go overseas will be critically investigated and identify why other organisations do well while others are failing after making the decision of going overseas.
Furthermore, the essay will also look at the factors which should be considered by an organisation prior to making a decision of investing overseas. The essay will also discuss Political, Economical, Social and Technological (PEST) factors which can either have positive or negative impact on the company’s decision to go international. There are so many benefits and risks associated with FDI. There will be an examination of the benefits as to whether both the international company and the host country benefit from the investment as well as analysing whether both foreign and domestic countries equally enjoy the benefits of FDI.
According to Chryssocoidis et al (1997) there are
References: BBC News. (2010). Mugabe 's calls to nationalise UK companies in Zimbabwe. Available: http://www.bbc.co.uk/news/world-africa-12023481. Last accessed 19 Mar 2012 Brassington, F and Pettitt, S (2006) Principles of Marketing Brooks, I., J. Weatherstone and G. Wilkinson (2011) The International Business Environment, Challenges and Changes. Harlow, Essex. FT Prentice Hall Datamonitor http://360.datamonitor.com/Browse?nav=348&q=uk country profile. Last accessed 15 Mar 2012. Hollensen, S (2004) Global Marketing : a decision-oriented approach Morrison, J (2006) The International Business Environment, Global and Local Market Places in a Changing World. New York: Palgrave Macmillan Nebusiness Palmer, A (2004) Introduction to Marketing, Theory and Practice. Oxford University Press Sajjad, L (2011) High risk could lead to high gain in Libya Worthington, I and Britton, C (2009) The Business Environment. FT Prentice Hall, Harlow .