Foreign Direct Investment
Discussion
DI (Half page)
In 2008, inward FDI accounted for some 63.7 percent of gross capital formation in Ireland, but only 4.1 percent in Japan (gross capital formation refers to investments in fixed assets such as factories, warehouses, and retailstores). What do you think explains this difference in FDI inflows into the two countries?
Cost Benefit of FDI (half page)
This week we explored the various theories of FDI and discussed how political ideology has shaped these attitudes. With that said, please identify a cost and a benefit of FDI from the perspective of a home country. When answering this question, select any home country of your choice excluding the United States.
Answer preview
- Gross Capital Formation
According to Carkovic and Levine (2005), foreign direct investment (FDI) involves a firm investing directly in a foreign country. A corporation becomes a multinational enterprise when it undertakes foreign direct investment. FDI is also known as inward investment. There are two types of federal direct investment which include merging or acquisition and Greenfield investment. The FDI is the vital source of investment in foreign countries. It is normally associated with higher prospects of economic growth, and it applies typically…
(500 words)