FDI: Risks and Benefits

Foreign Direct Investment Risks and benefits

FDI: Risks and Benefits

This week’s readings focus on the patterns of foreign direct  investment (FDI) between countries and the extent to which governments  can control or influence a firm’s decision to invest in their country.  Taken together, these readings paint a picture of the benefits and risks  of FDI.

To prepare for this Discussion, begin by selecting a pair of  countries from the list below. Then, pay attention to both the nature  and history of the FDI, the benefits and risks associated with using an  FDI entry strategy, and the risks and benefits to and for both  countries.

  • China and Brazil
  • United States and Mexico
  • India and United States or Canada
  • Germany and Ireland
  • France and Morocco or Algeria
  • China and Japan or South Korea
  • Intra South American—two or more countries in the region 

Post by Day 3 the following:

  • Assess the nature and history of FDI between the country pair.  Support your assessment using one or more of the international trade  theories introduced in Chapter 6 of your text.
  • Next, outline the benefits and risks associated with using an FDI  entry strategy in the recipient country. Also explain current  international trade patterns and the factors that influence  international trade.
  • What are the risks and benefits for both the organization making the investment and the country receiving it?
  • What type of production or other facility would you suggest be built using the FDI?
  • In what ways will the FDI affect international trade? Use one or  more of the trade theories introduced in Chapter 6 of your text to  support your answer.
  • What would the effects be on exports from the host country and imports or parts and resources for the facility?
  • Conclude with an assessment of whether you would recommend FDI as  an entry or expansion strategy for the particular country pair and  industry examined.

General Guidance on Discussion Posts: Your original  post, due by Day 3, will typically be 3–4 paragraphs in length as a  general expectation/estimate. Refer to the Week 2 Discussion rubric for  gradinhttps://www.homeworkmarket.com/files/beauty123.jpg?dimensions=100x100g elements and criteria. Your Instructor will use the rubric to  assess your work.