Foreign Direct Investment (FDI) needs an orderly governance in order to foster its effective and competent operation across nations. Evaluate this statement in the perspective of International Commercial Law by addressing the following questions. Foreign Direct Investment Essay foreign Direct Investment has the potential to add significantly to a developing countrys overall performance aiou and competitiveness. Identify and evaluate the policies which would maximize the potential benefits from Foreign Direct Investment Foreign direct investment (FDI) is an integral part of an open and effective international economic system and a major catalyst to development. Case discussion questions:. Why, historically, has the level. Fdi in Japan been so low? Fdi stock in Japan is partly the result of a history of official inhibitions.
The companys global marketing strategy has many flaws. Wal-Mart failed to grasp the consumer and retail environment in Japan. With a population of prezi 127 million, the highest per capita income and the second largest economy in the world, japan is a very attractive market for retailers. Perhaps more research into their cultural values and patterns could have helped avoid some of these mishaps.
How did the entry of Wal-Mart into the japanese retail sector benefit that sector? Who lost as a result of Wal-Marts entry? It helped restructure japans retail sector- boosting productivity, gaining market share, and profiting in the process. Wal-Mart implemented its cutting edge information systems, adopted tight inventory control, leveraging its global supply chain to bring low cost goods into japan, restraining employees to improve customer service, and extending opening hours. It was more difficult than Wal-Mart had hoped. Wal-Marts entry prompted local rivals to change their strategies. Why has it been so hard for Wal-Mart to make a profit in Japan? What might the company have done differently?
Role Of, foreign, direct
Case discussion questions:. Why, historically, has the level. Fdi in Japan been so low? Fdi stock in Japan is partly the result of a history of official inhibitions. In some industries, off inward, fDI penetration, as measured by the share of employment accounted for by foreign affiliates, in Japan in fact is on par with the United States. However, a large number of sanctuaries with almost no foreign involvement remain, so that. Fdi penetration overall is still very low.
While to some extent, this can be explained by japans relatively isolated geographic location, historical factors play an important role. Throughout the centuries and until quite recently, japans rulers have viewed foreign involvement in the economy as a threat and consequently erected various barriers. What are the potential benefits to the japanese economy of greater. The potential benefits to the japanese economy of greater. Fdi are the ones listed below: faster revenue growth than domestic firms; significantly higher profitability and sales margins than domestic firms; Greater capital investment per employee than domestic firms; higher total factor productivity than domestic firms; higher spending on research and development per worker than. Higher average wages than domestic firms.
A good example of a country that has greatly benefiitted is the east African leader in economy, kenya. Many foreign firms from Japan, China and the United States have developed good relations with Kenya and, in turn, they have given back to the people of Kenya by ensuring that they have left the infrastructure better than they found it by establishing new facilities. The foreign investors always work towards ensuring that they provide better products and services at the lowest cost possible. Kenyas good relations with China have seen the development of a multi-billion Thika superhighway upgrade to world class standards. This road is one of its kinds in Kenya and has made life easier to the more than 1 million people who use the road daily (Faeth 2010,. The most common traffic jams that were a daily experience to the users of this road are now a thing of the past.
Most people have also got employed in this project, thus, reducing the level of un-employment. Such benefits have a huge impact to the economy of a country, particularly a small developing economy like kenya. Apart from improving the infrastructure, the projects carried out by the foreign direct investors improve the living standards of a country by raising those to acceptable levels. These good relations have been extended as far as Israel and Japan and Kenya are enjoying the benefits. Foreign firms such as sbi international, China wu yi and Shengli are the major companies and investors in the east African region. They invest mainly in road construction and other infrastructure improvements. 5 off for more than 15 pages 10 off for more than 30 pages 15 off for more than 50 pages, on the other hand, foreign direct investment can be argued to have caused negative impacts on any particular host country. According to herman (2004,.
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Recently, tullow Oil Company was given the mandate to drill oil in Uganda. Foreign direct investment also has increased participation in segment production. A segment is a division within a corporation or a business entity that has the capability of making or earning its own revenue. In such way, different countries are able to produce different goods essay and through foreign direct investment, an agreement is reached on the kind of goods that a particular country exports to the other and vice versa (Hindelang 2009,. This prevents the occurrence of an incidence whereby close countries produce similar goods, limiting their trading opportunities. Most countries have presentation rapidly grown through the benefits and technological profits acquired by foreign direct investment and the efforts put towards ensuring that the intellectual relationship is thoroughly maintained. Another benefit of the foreign direct investment initiative to the host nation is infrastructure development. Infrastructure has received a lions share in terms of growth, establishment and improvement based on capital acquired from foreign direct investment (lukac 2008,.
These leading economies deploy their people to carry out business in these developing countries and, thus, bringing in their technology. Alongside technology, skilled manpower is also gained, since the foreign firms bring in their people who are conversant with their technology, and they end up teaching the locals to work in the firms. The foreign, most of who have good managerial and entrepreneurial skills, end up passing numerous offers to the locals, who also look for opportunities in foreign countries to invest. Foreign direct investment has also played a major role how in the provision of resources to both the company and the host country. The inter-relation between countries enables them to exchange goods and resources easily among themselves, thereby, increasing trade and exchange of technology between them. Countries with resources like minerals and petrol that lack the equipment to drill engage in trade with others with the capability to produce such equipment and both end up benefiting instead of the resources lying idle (liu 2001,. During the explorations in the field the locals are given an opportunity to work and earn a living. Apart from them earning a living, it gives them opportunities to acquire new skills, improve the countrys gdp, thus, developing the economy of their country and, in turn, increasing the income of the foreign firms.
mainly be attributed to the foreign firms huge desire and urge to succeed in their endeavor and the need to ensure that the good relations that led to them being allowed to invest are maintained throughout their time of presence in the host. These foreign firms also come in with well trained staff and state of the equipment to ensure that businesses run smoothly. Better equipment and dedicated staff members ensure better results and a better chance of achieving the aim of profit maximization. One major impact of foreign direct investment to host country is the massive improvement in technology. Most foreign firms move to a country in search of investment opportunities and, in result, they invest in improving the technology of that country so tat their business can run without major technological downfalls or constraints. The foreign firms are usually given the mandate to ensure the host country receives the best out of the trade and, therefore, they have to employ the best technology for best results (lukac 2008,. Most African countries have benefitted a lot in terms of technology, since they have developed good relations with leading economies like japan, China, britain and United States.
Fdi has greatly affected the growth of economies through the input brought about by the foreign firms to the host country. It seeks to provide new market opportunities, access to new technologies, cheaper production facilities and improvements in the products (Bora 2002,. Firms and individuals seek to establish markets in different countries so as to diversify their services and reach out to people who might offer a better market than their local market. Foreign direct investment can be credited for providing more inflows to host countries. A host country is a state which accommodates institutions, companies or individuals from other countries in terms of business and other functions involving the economy. This paper seeks to establish the positive and negative effects of foreign direct investment on the host country. 0 uwb 0 days : 0 0 hours : 0 0 minutes : 0 0 seconds, get 17 off, lipsey (2002,.
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The goal or aim of every investor is to gain profits. Investment is among the most preferred means of achieving the goal of profit maximization. Investment refers to buying of a financial commodity or a valuable item with a hope of future increased returns. It may mean using money to make more money. Foreign direct investment can be defined as the measure of investments, both long-lasting and on short term basis, aimed at achieving financial interest in enterprises, the operations of which are mainly outside the economical territory of the particular investor or investor groups (Wren 2006,. Foreign direct investment (FDI) entails a particular investor seeking to control a market in a foreign country or region. It involves cooperating and bringing together assets from foreign countries into the domestic economy to promote the trade and running of a country without exhausting its natural resources (Patterson 2004,. It involves trade across borders of countries through exports and imports. Trade between countries has essay been greatly affected by the fdi in that countries have developed close ties and, hence, good political and economical relationships.